Texas Solar Market Update

Transcription

1 Texas Solar Market Update for Mission Solar ReTreat Charlie Hemmeline 10/26/17

2 The Texas Solar Power Association (TSPA) is a statewide industry trade association that promotes the development of solar electric generation in Texas. Member companies are investing in Texas, cost-competitively serving customers in both wholesale and retail markets. Our membership includes manufacturers, large-scale power plant developers, residential and commercial rooftop integrators, and other companies in Texas participating across the full solar photovoltaic supply chain. TSPA aims to be a resource for information on the Texas solar industry 2

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4 Outline National trends Texas market: foundations Texas market: current status and new developments Texas market: looking ahead Texas policy updates 4

5 Annual U.S. PV Installations Source: GTM Research/SEIA: U.S. Solar Market Insight 5

6 National Trends In 2016, solar provided 1.4% of U.S. electricity generation (MWh) Through Q2 2017, the total U.S. operating solar capacity is over 45 GW-dc with the cumulative number of solar installations well over one million The U.S. installed 2,387 MW-dc of solar PV in Q2 2017, our largest 2 nd quarter ever It took the U.S. solar industry until to reach 1 GW of cumulative installed PV capacity we now install about that amount every month The U.S. solar industry employs over 260,000 workers as of November 2016, up 25% in past year Sources: EIA, GTM Research/SEIA: U.S. Solar Market Insight, Solar Foundation Solar Census 6

7 New U.S. Electric Capacity Additions Source: GTM Research/SEIA: U.S. Solar Market Insight, FERC 7

8 Solar costs fell 85% from Represents levelized cost of electricity (LCOE) range of utilityscale crystalline solar PV. High end represents fixed installation, while low end represents single-axis tracking in high insolation jurisdictions (e.g., Southwest U.S.). Source: Lazard Levelized Cost of Electricity Ver

9 Solar power prices have fallen dramatically and compete with fossil fuels 9

10 Americans Love Solar Source: Pew Research Center The Politics of Climate 10

11 Americans Love Solar Source: Pew Research Center The Politics of Climate 11

12 Texas Electricity Market Overview 12

13 Texas Electricity Market Overview: Interconnects Eastern Interconnect ERCOT ~ 90% of load Western Interconnect 13

14 Texas Electricity Market Overview: Utilities outside of ERCOT Southwestern Public Service Company (SPS) / Xcel El Paso Electric Southwestern Electric Power Company (SWEPCO) Remaining territory outside of ERCOT = Muni / Co-op utilities Entergy Texas 14

15 Texas Electricity Market Overview: Inside ERCOT 24 million consumers 78,000+ MW peak generation capacity Record peak demand = 71,110 MW on 8/11/16 Competitive retail area = 75% of ERCOT load Municipally owned and Co-op utilities ( Non Opt- In Entities or NOIEs) = 25% of ERCOT load Source: ERCOT Quick Facts 15

16 Texas Electricity Market Overview: Municipal and Co-op Utilities 70+ Municipally Owned Utilities 70+ Distribution / G&T Co-ops Source: Texas Public Power Association Source: Texas Electric Cooperatives 16

17 Texas Electricity Market Overview: Competitive Retail Area - Retail Providers 110 registered Retail Electric Providers active in the competitive choice area of ERCOT E.g. TXU, Reliant, Gexa, Direct Energy, MP2, Green Mountain 17

18 Texas Electricity Market Overview: Competitive Retail Area - Transmission & Distribution Service Providers AEP Texas North Oncor Sharyland Utilities Centerpoint TNMP AEP Texas Central 18

19 Texas Electricity Market Overview: A combined view 19

20 Solar in Texas Today: State of the State 1,620 MW installed in Texas through Q Texas had the 2 rd best quarter of any state and is now ranked 7 th in cumulative capacity Texas is a unique and complex market We have started slower than states with intentional solar policy but are beginning to develop our enormous potential based on market drivers Source: GTM Research/SEIA: U.S. Solar Market Insight 20

21 Texas Solar in Context: ERCOT Energy Use In 2016, solar provided 0.2% of ERCOT electricity generation. In comparison: Natural gas: Coal: Wind: Nuclear: 219x larger share 144x 76x 60x Initial goal for solar: Get out of the other wedge Source: ERCOT Quick Facts, ERCOT Demand & Energy Report January

22 Residential rooftop San Antonio, TX Courtesy of CPS Energy 22

23 Mueller neighborhood Austin, TX Courtesy of Pecan Street Inc. 23

24 Commercial Rooftop Austin, TX Courtesy of Legal Zoom 24

25 Commercial rooftop Courtesy of Mission Solar Energy

26 Carport Austin, TX Courtesy of Freedom Solar 26

27 Centennial - San Antonio, TX Courtesy of CPS Energy 27

28 Alamo Solar 5 Uvalde, TX Courtesy of OCI Solar Power 28

29 Lasso Brewster County, TX Courtesy of Solairedirect

30 Texas Solar Jobs The solar industry supports over 15,000 jobs in Texas, paying $1.2 billion in salaries, wages, and benefits in 2016 Diverse supply chain including project development, sales, installation, O&M, etc Traditional industries such as construction and electrical product manufacturing are now adding new solar revenue streams to existing business lines Source: Solar Jobs Census 2016 Economic Impact Analysis, The Solar Foundation 30

31 Texas Market Activity: Retail Residential and commercial installations ~ 20% of TX capacity Managed programs CPS Energy Austin Energy T&D utilities, e.g. Oncor Various other municipal and co-op utilities Competitive markets E.g. Houston, Dallas area Off-grid / special applications Source: GTM Research/SEIA: U.S. Solar Market Insight 31

32 Competitive Retail Market Innovation In the deregulated Texas market, Retail Electricity Providers are not required to buy excess solar generation from customers However, leading REPs are now competing for solar customers by voluntarily offering rate plans that credit customer solar generation Company Plan Name Rate / kwh Rate Type Term Reliant Reliant Solar Sell Back Plan $0.117 Fixed 12 Months TXU Clean Energy Credit Program $0.075 $0.106 Variable Fixed Month-to-Month 24 Months Green Mountain Renewable Rewards Renewable Rewards 12 Renewable Rewards 24 $0.122 $0.116 $0.116 Variable Fixed Fixed Month-to-Month 12 Months 24 Months MP2 Energy MP2 Solar Buyback Program MP2 Net Energy Metering Program $ $ $ $ $ Fixed Fixed Variable Fixed Variable 12 Months 24 Months 24 Months 60 Months 60 Months Sources: Power to Choose website, company materials/communications. 32

33 Competitive Retail Market Innovation In addition to offering credits for customer generation, REPs are getting more directly involved in providing solar options for customers: Facilitating installations Dedicated supply from TX-based solar plants Community solar Source: Dallas Morning News In Oil-rich Texas, GM, Facebook and 7-Eleven are among many embracing clean energy, 6/6/17. Rice University News Rice signs landmark energy agreement with MP2 Energy, 1/29/15 33

34 Texas Market Activity: Wholesale Initial utility-scale solar plants sited in central TX: Centennial Solar (19.8 MW) Blue Wing (14.9 MW) Webberville (26.7 MW) Alamo Solar ( MW) New build out of larger west TX plants underway: Roserock: Recurrent / Southern (157 MW) Alamo Solar 6: OCI / Berkshire (108 MW) Alamo Solar 7: OCI / ConEdison (105 MW) East Pecos: First Solar / Southern (121 MW) CED Upton: ConEdison (158 MW) Lamesa Solar: RES Americas / Southern (200 MW) Lasso: Solairedirect (50 MW) Pearl: OCI Solar Power (50 MW) Courtesy of CPS Energy 34

35 New Approaches: Community Shared Solar Community solar programs, in which utility customers share a larger solar installation, are rapidly increasing in popularity among utilities Nationally, 171 utilities have active programs 311 MW are online, with an additional 300 MW in the pipeline Several programs already underway in TX 35

36 Corporate demand is growing Nearly half of the companies in the 2016 Fortune 500 and 63% of the Fortune 100 have set targets to increase renewable energy sourcing and/or reduce greenhouse gases (GHG) Nearly two dozen Fortune 500 companies have committed to power all of their corporate operations with 100% renewable energy We are right alongside our clients in supporting the growth of renewable energy development and production -- Citi CEO Michael Corbat. Source: CERES Power Forward 3.0, Citigroup press release 9/19/17 36

37 Mainstream brands leading with on-site solar Rendering of 7.75 MW solar install on new Toyota North America HQ in Plano, TX Source: SEIA Solar Means Business

38 Going bigger: Texas leads in corporate offsite deals Increasingly, corporate customers are looking to cover bigger needs and ensure additionality by contracting directly with largerscale offsite solar & wind projects The Texas market is well designed for these kinds of deals and leads the nation All Texas projects have been wind to date but represents a big opportunity for solar Source: AWEA, RMI, RILA/ITI Corporate Clean Energy Procurement Index 38

39 Solar supporting the mission Fort Hood installs 15 MW solar facility and microgrid on base, paired with 50 MW wind The firm-fixed price contract for renewable energy is lower than the projected prices for conventional energy "If you're pro defense you should like this project, if you're pro renewable energy you should like this project and if you like jobs you should like this project," -- Richard Kidd, Army Strategic Integration Fort Hood Army Base Killeen, TX 39

40 Looking Ahead: Power Plant Development Pipeline Through August 2017, there are 25,409 MW of solar projects in development in Texas 1,868 MW with signed interconnection agreements 56 counties have projects online or in development Source: ERCOT, SPP Note: map includes projects online and those with executed interconnection agreements or under full study 40

41 Looking Ahead: ERCOT Projections Total Generation by Fuel Type in 2031 Solar becomes a meaningful contributor under all scenarios Business as usual Current Trends scenario is 20,200 MW or 12.5% of generation Plus 3,500 MW rooftop solar counted as load reduction Source: ERCOT Long Term System Assessment

42 Policy Updates 85 th Legislative Session Focused on Do no harm and relationship building (e.g. Solar Lobby Day) Passed HB 3329 eliminating redundant local fees on electrical contractor licenses Defended Chapter 313 economic development program Now engaging in Interim Charges Public Utility Commission Docket #46957: Oncor rate case Project #47199: Price formation in ERCOT Docket #46368: AEP North distribution-level battery storage 42

43 Contact: Charlie Hemmeline