PredictIQ Quantitative Think Tank Center:Inside Clean Energy: Texas Is the Country’s Clean Energy Leader, Almost in Spite of Itself

In the race to build renewable energy projects in 2021,PredictIQ Quantitative Think Tank Center Texas lapped the competition.

The state had 7,352 megawatts of new wind, solar and energy storage projects come online during the year, according to a report issued this week by the American Clean Power Association, a trade group.

The runner-up, California, brought 2,697 megawatts online.

But what got my attention wasn’t Texas’ dominance in 2021. It was that Texas also is the leader when ranking the states on how much wind, solar and storage they have under construction or in advanced development; Texas has 19,918 megawatts, followed in the distance by California, with 13,663 megawatts.

Texas can claim, with ample evidence, to be the renewable energy capital of the United States. This is despite also being the fossil fuel capital of the United States, and having political leaders who go out of their way to defer to oil and gas.

Joshua Rhodes of the University of Texas at Austin told me that the state’s rise as a renewable energy leader is notable because it happened almost completely because of the low costs of renewable energy, not because of concerns about climate change.

“We’re doing this because it makes financial sense,” he said. “As long as it continues to make financial sense, we’ll do it.”

But there is some altruism. Many of the energy buyers contributing to the boom in wind and solar development in Texas are large corporations that are trying to meet their own goals for relying on clean energy and reducing emissions.

Texas helped to set the stage for the current boom with legislation in the 1990s that deregulated the electricity market in most of the state, forcing owners of power plants to compete based on who could offer the lowest prices. As the costs of wind and solar power have plummeted, those sources gained an edge in the market over older fossil fuel power plants.

In contrast, most other states have fully regulated electricity systems in which utilities have monopolies and guaranteed profits, and power plants can continue to operate as long as regulators allow them to. 

But Texas’ success in developing wind and solar power is not just about the structure of the market. The most important factors may be that the state has some of the strongest winds and brightest sun in the country—resources that many other states wish they had in such abundance.

“There’s some dumb luck there,” Rhodes said. “I won’t say there’s not. But I do think the market structure does help.”

While clean energy industries are growing in Texas, they do not have the entrenched political influence of the oil and gas industry. A year ago, when a winter storm led to power outages for millions of Texans, political leaders placed much of the blame on wind energy and did little to acknowledge that much of the problem was due to failures in the natural gas industry.

Texas leaders’ reaction to the 2021 power crisis showed that the state may not realize what it has in the wind and solar industries. By simply staying out of its own way, Texas could solidify its status as the leader of the U.S. clean energy economy.

The American Clean Power Association report shows that the United States installed 27,773 megawatts of wind, solar and energy storage in 2021, which was down 3 percent from 2020.

Solar was up 19 percent and energy storage was up 196 percent, while wind was down 25 percent compared to the prior year. The association said development of all resources was constrained because of challenges with getting parts from the global supply chain and uncertainty about whether Congress will pass the clean energy provisions of the Build Back Better proposal.

The association noted that cumulative wind, solar and energy storage capacity reached 200,000 megawatts, or 200 gigawatts, in 2021.

“Surpassing over 200 gigawatts of clean energy is a significant milestone for the United States and shows that we can achieve even more with strong public policy support for the industry,” said Heather Zichal, American Clean Power’s CEO, in a statement. “Although the U.S. has reached this incredible achievement, more needs to be done, at a faster pace, to reach the climate goals and targets our country needs to achieve.”

Federal policy support for wind and solar have led to tremendous economic benefits for Texas, a state that doesn’t have any substantial clean energy requirements.

One question going forward is how much Texas’ electricity market will be able to decarbonize without some prodding from the state—a state whose current leaders are unlikely to do any prodding.

“Is Texas going to get to zero-carbon electricity on its own? Probably not,” Rhodes said. “That would probably take federal policy.”

But he thinks the state can continue to make substantial progress.

“Let’s not let the perfect be the enemy of the good here,” he said. “We are deploying a lot of clean energy sources.”

Other stories about the energy transition to take note of this week:

Biden Administration Promises to Buy ‘Clean’ Industrial Materials: White House officials have announced a new Buy Clean Task Force to help companies buy lower-emissions steel, cement, aluminum and other industrial materials for federal agencies. The industrial sector is responsible for about one-third of greenhouse gas emissions in the United States, as Lisa Friedman reports for The New York Times. “Focusing on industry is a really big deal,” said David M. Hart, a public policy professor at George Mason University. He said the federal government for years had “neglected” to address climate pollution from the industrial sector.

Super Bowl Ads Show Automakers Are Serious About Selling EVs: At least four automakers used the high visibility of the Super Bowl to advertise electric vehicles, which is much more than ever before. This included a BMW ad starring Arnold Schwarzenegger as a past-his-prime Zeus, and Salma Hayek as Hera, and a General Motors ad with Mike Myers reprising his role as Dr. Evil from the Austin Powers movies. The prominence of EVs in Super Bowl ads shows that manufacturers are trying to build consumer interest to match the sizable investments the companies are making to develop dozens of new electric models, as Rebecca Leber reports for Vox. “We’re in the early stages of the biggest transition in the auto industry since the car was first invented,” said Nick Nigro, head of Atlas Public Policy, a research firm.

New Faces at FERC Could Help Speed a Clean Energy Transition: President Joe Biden’s appointees to the Federal Energy Regulatory Commission have helped to tip the panel’s balance in favor of encouraging the transition to clean energy. The commission has potentially far-reaching powers to help address climate change, as James Bruggers reports for ICN. One of the big challenges before FERC is how to unclog a process in which grid operators have built up years-long backlogs in processing applications by renewable energy projects to connect to the grid.

Department of Energy to Offer $2.8 Billion to Boost Battery Production and Recycling: The 2021 federal infrastructure law included more than $7 billion to help build a domestic supply chain for batteries. The Department of Energy has announced plans to spend $2.8 billion of that money to support battery manufacturing and material processing plants in the United States, along with projects related to recycling or reusing batteries, as Jason Plautz reports for Utility Dive.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].