Solar capacity additions are reshaping Texas’s energy landscape

True North is Iberdrola’s first solar project in the state of Texas. Operated by its US subsidiary Avangrid, some 20 MW has been commissioned so far. Once completed, the 238 MWac (321 MWdc) output of the solar farm will go to support tech company Meta’s net zero commitment, including its upcoming data centre in neighbouring Temple.

Avangrid has also begun installation of its 202 MWdc Powell Creek solar project in the state of Ohio. It will be its second renewable energy project in the state, the first being the 304 MW Blue Creek wind farm.

Shifting dynamics in power generation

While wind power continues to be the largest source of renewable energy in Texas, the rate of new wind turbine installations showed signs of decelerating in 2023, with the focus shifting towards rapidly expanding solar capacity, according to the Electric Reliability Council of Texas (ERCOT), which oversees the state’s electricity grid.

The rapid addition of solar capacity to the ERCOT grid is transforming the daily electricity supply pattern in Texas, reports the US Energy Information Administration (EIA).  

EIA statistics highlight the dramatic rise in solar power generation in Texas. During the winter of 2022–2023, the hourly average solar generation was 1.9 GWh, which increased to 3.3 GWh in the winter of 2023–2024. Summer figures also saw a substantial increase, from 3.6 GWh in 2022 to 5.1 GWh in 2023. Conversely, wind generation saw a slight decrease in the winter, from 13.8 GWh to 13.2 GWh, while remaining steady at 11.2 GWh during the summer over the same periods.

Despite contributing more renewable generation than any other source in Texas, wind generation in 2023 remained essentially unchanged from 2022, whereas solar generation increased by 35% year-over-year. During 2023, Texas produced about 108,000 GWh from wind power and about 32,000 GWh from utility-scale solar generators.

This surge is attributed to the rapid addition of around 16 GW of installed solar capacity. Looking ahead, the EIA reports that power plant developers plan to add about 24 GW of solar capacity by 2025, compared to just 3 GW of new wind capacity. Additionally, 13 GW of battery storage is expected to be integrated into the grid, further bolstering the state’s renewable energy infrastructure.

Solar power, often coupled with storage solutions, is now displacing natural gas generation during midday when solar output peaks. This trend is especially pronounced in the summer, a period of high electricity demand in Texas. However, despite this shift, natural gas remains crucial for meeting electricity needs in the evening when solar generation wanes, notes the EIA.

In Texas’ wholesale electricity markets, natural gas-fired plants have traditionally balanced fluctuations in electricity demand alongside the variable daily output of wind and solar power. This balancing act is similar to the ‘duck curve’ phenomenon observed in California, where natural gas generation peaks in the evening. In Texas, solar power generation reaches its zenith around midday, and as it declines in the late afternoon, natural gas is dispatched to fill the gap. Additionally, wind generation typically increases in the evening, further reducing the reliance on natural gas.

Economic impact

The rapid growth in renewable energy projects continues to bring significant economic benefits to Texas. According to the Texas Association of Business (TAB), Advanced Power Alliance (APA), and Conservative Texans for Energy Innovation (CTEI), renewable energy and battery storage projects are projected to generate $16.7bn in local tax revenue and nearly $19.3bn in landowner payments over their lifetimes. These figures represent increases of 16% and 15%, respectively, from 2022.