Solar is Expanding and Taking Over Oil Country
Texas is not only the largest state in the continental United States, but also as most people know, it has the largest oil reserves and is the largest provider of power generated by coal. Now the Lone Star State, long known for its oil production, is expanding into clean energy at a rapid pace. The state is forecasting to add over six gigawatts of solar power by 2021 according to the Electric Reliability Council of Texas. A gigawatt is a unit of electric energy equal to one billion watts.
Texas is already getting around 15% of its electricity from wind but with a new push towards more clean energy goals, developers are seeking to increase the solar capacity by 400% by 2022, adding enough solar panels to light the entire city of Dallas! This ambitious initiative isn’t being pushed just to power residential areas. Oil and gas drilling companies are basically demanding solar developers to provide solar power to help offset the extremely high operating expenses with electricity costs spiking over $1000 per megawatt hour.
This is huge news for the solar industry that has found itself going head to head with fossil fuel companies about moving to renewable energy. Texas has some of the least expensive energy resources on the planet so the move to expand into solar is a huge feather in the cap of the solar market sector and will prove that solar can not only be utilized by oil companies but that it can actually be competitive while assisting fossil fuel companies in transitioning to green energy alternatives. Many oil companies have begun to invest into renewable energy alternatives instead of taking a wait and see approach.
Solar development in Texas is not being motivated by mandates for renewable energy like California and other states leading the push to solar. Texas met its quota for clean energy long ago by utilizing wind power. The reason for the demand for solar is because solar is becoming more cost effective.
According to BloombergNEF, the cost of building a solar farm in Texas is around $32 per megawatt hour when spread over the lifetime of the operation. The cost is $38 per megawatt hour for a high efficiency refinery. Solar farms can be built in under six months while refineries can take years making it is a no brainer to make the move to solar. Another key factor that gives solar an edge is that it is complimentary to the wind farms currently operating. Wind farms tend to generate most of their power at night while solar collects its energy during the day when most work is performed and energy demand is at its highest.
Much of the credit for the growth of the solar industry in Texas must be given to the oil and gas industry there. In the Permian Basin alone, output is now over four million barrels of oil a day, double what it was in 2016. Due to the increased production, gas prices have plummeted because there is more fuel being produced than pipelines can deliver. Industry forecasters state there is no end in sight. Due to the economic growth created by the drilling operations electricity demand is so high that existing power plants can’t keep up.
This summer the demand for electricity is expected to reach nearly 75 gigawatts which will break the previous record set in July of 2018. This demand is likely to result in shortfalls and prices for electricity are likely to increase dramatically according to the Electric Reliability Council of Texas Inc. ERCOT has also predicted that the energy production capability of the solar industry in Texas will quadruple by 2022.
As a result of high energy prices along with strong winds there was exponential growth of wind farms in the Texas Panhandle. Wind turbines were producing more power than the local grid could accept. The state invested nearly seven billion dollars on new transmission lines to deliver over 18 gigawatts of renewable energy to larger cities across the state.
As a confirmation that this isn’t just some unique situation in Texas other big news this week comes as Shell Oil just announced it was pulling out of the American Fuel & Petrochemical Manufacturers (AFPM) and became the first major oil and gas company to announce plans to leave a leading U.S. refining lobby due to disagreement on climate policies, citing its support for the goals of the Paris climate agreement. In its first review of its association with 19 key industry groups, Shell said it had found “material misalignment” over climate policy with the American Fuel & Petrochemical Manufacturers (AFPM) and would quit the body in 2020. We will be posting more on this news and research if other companies are doing the same.
ClearWorld is poised to experience rapid growth in the solar industry with installations in nearly 100 cities across the world at the moment as well as on military bases and in local, state, and national parks. One of our largest Solar LED lighting installs is in Texas. The company is on the cutting edge of renewable energy technology saving municipalities and other organizations over 50% compared to conventional installations of lighting for example due to the lack of needing trenching and extensive wiring. The ClearWorld Solar Solution is also much more environmentally friendly by reducing the disturbance of natural habitats.