Potential for Texas Sized RPS

Texas Sen. Troy Fraser (R- Horseshoe Bay) has introduced a Bill to the State Legislature that would expand the state’s current Renewable Portfolio Standard (RPS). The RPS program implemented in Texas is regarded as one of the most successful in the country, Fraser said, and since the state passed an RPS in 1999, 1187 MW of renewable energy capacity has been installed in Texas.

The current RPS in Texas calls for 2,000 MW of installed capacity by 2009. Senate Bill (SB) 533, sponsored by Fraser, would require the State to increase the installed capacity of renewable energy sources to 5,000 MW by 2015 and an upgrade of 10,000 MW by 2025, which should represent 10 percent of the state’s energy needs. The RPS allows a combination of federal and state incentives for the development of renewable energy to private companies. “Texas has incredible potential for renewable energy resources that I want to tap,” said Fraser, who is also the chairman of the Texas Energy Planning Council (TEPC). “Wind will provide the overwhelming majority of renewable energy in Texas for the future, there is a lot of it and it is becoming more competitive in pricing.” Fraser’s push for an expanded RPS was put to the test by the Union of Concerned Scientists (UCS), which compared the TEPC goals with a proposal from the Texas Renewable Energy Industries Association (TREIA). UCS considers Fraser’s proposal a modest increase that would achieve an 8 percent increase in the mix of renewable energy sources in the states portfolio by 2025 with 500 MW from non-wind renewable sources. TREIA would like to see 20 percent of the states energy coming from renewable energy sources by 2020 with one percent of the requirement set aside for distributed resources such as solar energy and farm-based technologies. Megawatts of installed capacity aren’t always the bottom line that legislators want to base decision on, however, and the UCS did a cost benefit analysis of the two RPS increase proposals. Not surprisingly, each of the proposals could have a positive affect on the economy and environment of Texas, according to UCS, and the 20 percent proposal from TREIA could have a greater affect. Annual cost benefits under the TREIA proposal are: Consumer Benefits – Combined savings on their electric bills of $4.6 billion – Combined savings on natural gas bills of $1 billion Economic Benefits: – Up to 38,290 new jobs created in the state – Up to $9.4 billion in new capital investments – Up to $1.1 billion in school tax revenues – Up to $154 million in land lease royalties for wind power facilities Environmental Benefits: – CO2 emissions savings from power plants of approximately 20 million metric tons (MMT) Under the 20 percent standard, average consumer electricity prices would remain virtually unchanged through 2012, according to UCS, with prices beginning to decline thereafter. By 2025, average electricity prices would be nine percent lower under the 20 percent standard compared with business as usual. If natural gas prices exhibit either short-term price spikes or long-term sustained increases beyond those currently projected by the Energy Information Administration (EIA), or if the federal production tax credit for wind and other renewable resources is extended beyond 2005, consumer savings would be greater that the UCS predicts under both policy proposals. Annual cost benefits under the TEPC proposal are; Consumer Benefits: – Combined savings on their electric bills of $5 billion – Combined savings on natural gas bills of $500 million Economic Benefits: – Up to 19,950 new jobs created in the state – Up to $4.7 billion in new capital investments – Up to $628 million in school tax revenues – Up to $111 million in land lease royalties for wind power facilities Environmental Benefits: – CO2 emissions savings from power plants of approximately 5 MMT If Fraser’s bill is passed by the Legislature it would also direct the Public Utility Commission (PUC) to identify competitive renewable zones to update the transmission infrastructure. What Texas really needs, and the proposals provide according to the UCS report, is a way to diversify the state’s energy mix. Texas relies heavily on natural gas, coal and nuclear power for most of its electricity, and that reliance will definitely grow over the years. Under the 20 percent proposal from TREIA, the state would increase its total homegrown renewable power to more than 17,800 MW by 20253-producing enough electricity to meet the needs of 4.9 million average-sized homes. Texas’ strong wind resources would power the majority of this development, according to UCS, with bioenergy and solar resources also making significant contributions to the mix. Under the 10,000 MW proposal from TEPC, wind power would constitute the majority of development, while nearly all of the 500 MW of non-wind capacity would come from bioenergy by 2015. Though the TREIA has a strong proposal, only Sen. Fraser has filed a Bill with the Texas State Legislature for consideration.
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