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Yahoo
06-05-2025
- Business
- Yahoo
Texas renewables restrictions could increase power prices by 14% in 2035: Aurora
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter. Dive Brief: Restrictions on wind and solar development in Texas could increase wholesale power prices by 14% over the next 10 years and cause capacity shortfalls resulting in up to 3.1 GW of load shed in an extreme weather event, Aurora Energy Research said in an April 16 report prepared for the Texas Association of Business. In a 'fully restricted renewables' scenario, where no further wind and solar development occurs in Texas once today's late-stage projects are deployed, a typical 100-MW industrial customer would pay $6.3 million more for power each year by 2035, Aurora said. The typical household's electricity costs would increase $225 per year, or about 10%. The report highlights the importance of the Texas renewables industry in meeting expected load growth this decade while keeping prices in check and that 'renewables can make the system more reliable as opposed to less reliable … [which] tends to be overshadowed' in discussions of the role they play on the grid, Aurora's Head of US Central Olivier Beaufils said in an interview. Dive Insight: The biennial Texas legislature is considering several bills this session that would benefit new natural gas and other firm generation resources at the expense of renewables. In the past few weeks, the state Senate passed one bill imposing new fees and regulatory requirements on wind and solar projects and another requiring new renewables to be matched megawatt-for-megawatt with new 'dispatchable' resources other than batteries. A third bill under consideration, but not yet passed, would retroactively require firm backup generation at wind and solar facilities. The 2025 bills build on previous legislative efforts to blunt renewables' rapid advance and incentivize dispatchable generation in the Electric Reliability Council of Texas's territory. Though several proposals similar to those under consideration this year failed to advance out of the 2023 session, legislators did authorize the now-beleaguered Texas Energy Fund, which has seen 35% of its proposed dispatchable capacity canceled or withdrawn amid escalating project costs and supply chain challenges. Energy issues moved to the forefront of the Texas policy conversation following the near-collapse of the ERCOT grid during Winter Storm Uri, a prolonged freeze that killed hundreds of Texans and left millions without power for days in February 2021. That has created an opening for 'interests and people in Texas that maybe are less convinced of the free-market nature of ERCOT and would prefer to steer the state into picking specific technologies,' Beaufils said. 'They are saying, 'OK, maybe this whole free-market thing hasn't been going the way we want it to go, so let's push the market.'' The Aurora team was not surprised to find that curtailing deployment of lower-cost wind and solar resources would increase power prices, Beaufils said. Aurora's analysis showed lower average levelized, unsubsidized costs for both wind and solar-plus-battery projects than for any non-battery 'dispatchable' alternative, including combined-cycle gas. More 'interesting,' Beaufils said, was the finding that reliability would also decline in Aurora's restricted-renewables scenarios. Aurora compared a business-as-usual 'central scenario,' where current renewables projects in development deploy and market signals dictate future deployments, against two restricted scenarios. In the 'limited renewables' scenario, renewables projects in late-stage development reach deployment and future projects deploy at 50% of the central scenario pace. The 'fully restricted renewables' scenario sees no further renewables deployment after current late-stage development projects come online. By 2035, an extreme weather event could prompt respective load sheds of 1.8 GW/6.7 GWh under the limited scenario and 3.1 GW/12.7 GWh under the fully restricted scenario, causing as much as $450 million in direct economic impacts, Aurora found. Key to Aurora's analysis — and underscored by the Texas Energy Fund's troubles — is a persistent shortfall in gas turbine manufacturing capacity, with major turbine OEMs like GE Vernova, Siemens and Mitsubishi Power quoting deliveries in 2029 and beyond, the report said. 'You can't add an infinite amount of thermal generation to the system over the next five years,' Beaufils said. While Texas could add about 17 GW of thermal capacity through 2035 under both restricted-renewables scenarios, supply constraints could prevent up to 6.5 GW in further additions over the period, Aurora found. Individual industrial customers might deploy behind-the-meter backup power or consider deploying microgrids to reduce grid dependence, but running on backup power is an expensive 'last resort' and well-designed microgrids can take years to develop, Beaufils said. So the upshot of capacity shortfalls and structurally higher power prices in a restricted-renewables scenario is a state that's less attractive to invest in, he said. 'The last thing an industrial consumer would want is very high prices because there's less capacity on the system,' Beaufils said. Recommended Reading
Yahoo
21-02-2025
- Business
- Yahoo
Cutting clean energy tax credits would drive up Maine power bills
Feb. 21—A halt to clean energy tax credits being considered in the Republican-controlled Congress and the Trump administration could boost electricity prices in Maine by 17% over the next 15 years, adding an average of $15 to a monthly bill, according to a study by an Austin, Texas, research organization. Nationwide, eliminating incentives from the Inflation Reduction Act for wind, solar and storage systems could result in a $336 billion drop in investment and 237 gigawatts less clean energy generation capacity by 2040, according to the report by Aurora Energy Research, an Austin, Texas, research organization. The capacity lost is equivalent to what's needed to power about 35.7 million homes for one year. "With Congress working on the new budget it seemed important to us to inform policymakers on potential impacts of making changes to those clean energy tax credits," Olivier Beaufils, head of USA Central at Aurora, said Tuesday in a web-based presentation. Lizzie Bonahoom, a researcher on the report, said it's "not exactly clear" that cutting clean energy tax credits will eventually pass Congress; the subsidies are not universally opposed by Republicans who form narrow majorities in the House and Senate, and are broadly embraced by Democrats who supported the Inflation Reduction Act initially proposed by President Joe Biden and enacted in 2022. Different versions of a budget are being drafted in the House and Senate, with disagreements on key elements of a plan that includes energy, immigration and defense policies. The authors of the study said its results are likely to be a conservative estimate of the impact on investment, jobs and clean tech deployment because it limited its focus on wind, solar and storage tax credits. Other clean energy policies, such as support for electric vehicles, hydrogen, local energy projects and the potential impact on sectors such as manufacturing, were not part of the project's scope. Eliminating tax credits could lead to a $22 billion-a-year falloff in clean power investment in the U.S.; in Maine, the loss would be $100 million annually, according to the report. Nearly 1,500 megawatts of power generated by onshore wind, battery storage and solar energy would be lost in the next 15 years in Maine, with most disappearing by 2030. The result would be a loss of less expensive clean energy produced in Maine, exposing consumers to volatile fossil fuels such as natural gas and oil with prices tied to global markets. Dropping federal incentives for clean energy would add an average of $5 a month to Mainers' electricity bills by 2030 and $15 a month by 2040, Aurora Energy Research said. Electricity prices in Maine and in New England are already high compared with other states due to the price of natural gas, which is a significant resource used by generators; gas pipeline constraints, such as limited capacity; and clean energy policies. The price of electricity in Maine was 26.3 a kilowatt-hour in November 2024, according to the U.S. Energy Information Administration. It was even higher in Connecticut, at 29.15 cents a kWh and 30.28 cents for Massachusetts ratepayers. In contrast, the price of electricity in Illinois was 17.2 cents a kWh, 18.1 cents in Delaware and less than 13 cents in Missouri, according to the agency. The authors of the report say it's "fully independent," does not favor any particular technology and does "not advocate for any specific policy or regulation." Still, advocates and others are mobilizing to oppose efforts by Republicans in Congress and the Trump administration that favor drilling oil and natural gas and mining coal while opposing efforts to expand offshore wind and other zero-carbon resources. The solar energy industry earlier this month lobbied Congress to maintain solar and storage energy and manufacturing credits in tax packages being considered. And the Natural Resources Council of Maine released a report earlier this month saying that Maine businesses and residents and Wabanaki Nations benefited from $2.2 billion in federal clean energy spending and private investment incentivized by Washington. The extent to which Biden administration initiatives such as the Inflation Reduction Act and Bipartisan Infrastructure Law that provides hundreds of billions of dollars in loans, loan guarantees, tax credits and other incentives are in jeopardy is not clear; funding that has already been provided contractual agreements are unlikely to be clawed back, though other funding could be halted. Copy the Story Link
