The shift from fossil fuels to wind and solar accelerated in Texas in March. Data from Energy Information Administration The power grid hourly monitor shows that wind power production in ERCOT shattered its previous record, surpassing 10.4 million MWh during the month – 2 million MWh above its previous record last December.
This production has pushed the wind’s share into the ERCOT electricity market at 38.6% and first place in total production, another first for the rapidly expanding resource.
According to the Institute for Energy Economics and Financial Analysis, solar production exceeded 1 million MWh in March, a level it had only reached three times before (in June, July and August 2020).
Together, the two renewable resources accounted for 42.4% of ERCOT’s production during the month, well ahead of gas, at 30%, and coal, at just 14.9%.
This large increase in production can be attributed to normal spring winds and the continued build-up of new wind and solar capacity at ERCOT. The transmission operator’s latest capacity installation report, released in February, predicted that there would be 29,447 megawatts (MW) of wind capacity in operation at ERCOT by the end of March, an increase of 2 343 MW compared to the previous month. Similarly, the amount of solar energy is expected to climb to 5,649 MW from 4,473 MW the previous month.
These increases are putting increasing pressure on the state’s fossil fuel generators, which will only intensify over the next two years. By the end of 2021, ERCOT estimates that more than 12,000 MW of solar capacity could be installed in its service territory and that the amount of wind could reach 35,000 MW. Even greater capacity is expected by 2022.
Another issue for fossil fuels is the moderating impact that the increasing amount of renewable capacity is likely to have on prices, especially during periods of high demand in the summer. These times have traditionally provided a disproportionate share of the annual income for many producers, incomes which are now threatened by the surge in solar production.
This development was evident during the last two weeks of March. Although still a long way from the state’s peak daylight period of late May to late July, solar exceeded 7% of ERCOT’s daylight electricity demand on 12 occasions from 15 to March 31. This generation, coupled with the expected addition of more than 1,000 MW of battery storage by July, will strive to cap prices, posing more risks to fossil fuel generators in the market.