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Austin American-Statesman - March 21, 2010

By Michael E. Webber, Special to American-Statesman

For all its ties to old energy, Texas has the tools to lead the way in plugging in to the sun

As the nation's largest energy consumer, leading emitter of carbon dioxide emissions and vanguard of the traditional energy industry, Texas might seem an unlikely candidate for the world's solar market leader. But with the combination of an expansive solar resource, recent success with wind power, extensive natural gas installations, competitive electricity markets and commitment to add transmission capacity, Texas might become just that.

Texas is the top energy consumer in the United States. With only 8 percent of the population, we consume about 12 percent of the nation's energy. We lead the nation in consumption of oil, natural gas, coal and electricity. In the process, our per capita energy consumption is about 60 percent higher than the national figure. In addition, our carbon emissions represent about 2.5 percent of the global total. If Texas were a nation, it would rank seventh in the world in carbon dioxide emissions, ahead of Canada and barely behind Germany, which has a population three times larger than ours.

Texas is also the nation's largest energy producer. It pulls more than 1 million barrels of oil and 19 trillion cubic feet of natural gas out of the ground each day, accounting for about one-fifth of national oil production and more than one-fourth of the nation's natural gas production. At nearly 4.8 million barrels per day of crude oil processing capability, Texas makes up more than one-fourth of U.S. refining capacity.

Texas also is a leader in the green revolution. Since 2006, when it overtook California, Texas has installed more wind capacity than any other state. Its installed wind capacity is surpassed by only a handful of countries in the world.

Because of the success with wind, interesting political alliances are being formed. Rural Republicans, who like wind because of the economic revitalization it offers, are teaming up with urban Democrats, who like wind's low-carbon and renewable characteristics, to support growth in other forms of renewable power. Consequently, the 2009 Texas Legislature generated a flurry of bills intended to support solar power. One of these bills, HB 1937, sponsored by Rep. Mike Villarreal, D-San Antonio, enables homeowners to finance their solar panels through their property tax bills over a few decades instead of forking over many thousands of dollars up front.

In addition, Texas utility companies already offer attractive incentives for residential solar installations. Although the statewide total installed capacity is less than 7 megawatts, enough to power about 2,000 homes, the time might be right for solar to follow the path charted by wind. If the pace of solar power installations follows wind's trajectory over the next decade, Texas will become one of the world's hottest solar markets.

Texas became a world leader in oil, gas and wind primarily because it has a lot of oil, gas and wind. And the same is true for solar: Texas' solar resource is among the largest of any state in the nation, with an average daily solar insolation ranging from 2.4 kilowatt hours per square meter per day in the eastern portion of the state in December to 8.0 in the western portion in July. Compared with small, cloudy states like New Jersey, which has installed more solar so far than Texas, the relative potential is blindingly obvious. In Austin alone, a recent study found that more than 2,000 megawatts of solar capacity could be installed on south-facing, unshaded rooftops, enough to replace more than half of the city's nearly 3,000 megawatts of current generating capacity from power plants.

In addition to its vast natural resources, Texas also has the manmade resources that are beneficial for a booming solar market. In particular, Texas has significant installed natural gas capacity, its own electrical grid and commitments to build additional transmission capacity, all of which will help bring solar power online sooner rather than later.

Because of solar power's variability, many grid managers and utility operators expect that new solar installations will need auxiliary natural-gas fired capacity to function as backup power. That makes natural gas a friend of solar power. In this regard, Texas is well ahead of the rest of the country. In fact, the state generates about half of its electricity from natural gas and 4 percent from wind whereas the nation generates about half of its electricity from coal and 1 percent from wind. Much of the natural gas capacity in Texas is underutilized, making it available to provide power when solar and wind resources are not available. Developers can then concentrate on building solar farms without also having to build natural gas plants.

Texas is the only state with its own grid. (There are only three in America: East, West and Texas.) The Texas interconnect, operated by the Electric Reliability Council of Texas (ERCOT), is separated from the rest of the nation, which allows the state to make investments without federal intervention. This is good news for solar development since permitting processes are more streamlined.

Grid independence has also yielded unprecedented transmission-line buildout under the Competitive Renewable Energy Zone (CREZ) program. Approximately $5 billion has been dedicated to this program to build a startling 18,000 megawatts of transmission capacity from far-flung regions of Texas, where wind and solar resources abound, to demand centers in the eastern half of the state.

And in Texas, the expense of hooking up new generation from solar and wind resources is shared equally among all users. This cost distribution makes it easier for remote solar and wind installations to compete economically with large-scale power plants closer to the cities. And, because solar developers don't have to carry the costs of new transmission and natural gas generation, their economics compare favorably to what they would be in other states.

Conveniently, the availability of wind and solar power in the Panhandle and western parts of Texas are often out of phase with each other during the summer — during the hours when one source produces more power, the other often produces less. This fortuitous mismatch means that solar farms can potentially share the transmission capacity originally built to enable wind integration. Texas would thereby avoid a second expensive build-out of new solar-dedicated transmission lines.

Furthermore, the solar profile matches well with peak demand in Texas, which means it can enter the market by competing with peak power prices (often 10 to 20 cents per kilowatt-hour) instead of with baseload prices (often 4 to 8 cents per kilowatt-hour).

The state's population is forecasted to grow by 10 million people by 2030, and utility companies will need to build new generation of some sort. The combined purchasing power of five large public utilities in the heart of Texas (Austin Energy, San Antonio's CPS Energy, the Lower Colorado River Authority, Bluebonnet Electric Cooperative and the Pedernales Electric Cooperative) gives the state a unique opportunity to kickstart the solar race.

Austin Energy, a national leader in green power programs, has committed to extensive new solar capacity investments. In particular, the utility plans to build a 30-megawatt photovoltaic farm on Austin-owned property by the end of 2010. Furthermore, CPS Energy in San Antonio plans to buy power from a projected 27-megawatt solar thermal plant in West Texas. Austin Energy is also a key player in the ambitious Pecan Street Project. This smart-grid effort includes an aim for Austin to install 300 megawatts of solar power by 2030, an aggressive timeline and target for a city that has less than 3,000 megawatts of total capacity.

Texas might additionally get intellectual confluence from its high-tech industry. Freescale Semiconductor, Advanced Microdevices, Applied Materials, Silicon Labs, Samsung and Sematech (the international research consortium) are just a few of the Texas-based semiconductor foundries whose expertise could transfer significant efficiencies to the solar-wafer manufacturing business. Austin-based HelioVolt, winner of R&D Magazine’s Editor’s Choice for most revolutionary technology, has already taken a lead in manufacturing building-integrated thin-film solar products.

All things considered — a paved way from wind, renewable resources, accessibility to technical resources, research capabilities, interconnect options, new transmission lines, natural gas capacity, and SmartGrid technology — don't be surprised if Texas leads the way in solar power generation. And we will probably get rich doing it.

Michael E. Webber is associate director of the Center for International Energy & Environmental Policy, co-director of the Clean Energy Incubator and assistant professor of mechanical engineering at the University of Texas. Visit www.webberenergygroup.com for more information.

Contributing to this article were Erin Keys, a University of Texas graduate in mechanical engineering; Jared Garrison, a doctoral candidate in mechanical engineering; David Wogan and Melissa Lott, masters degree candidates in public affairs and mechanical engineering; and Carey King, Ph.D., a research associate.