11197RE: [hreg] SRECs in Texas
- Mar 12, 2012
Thanks. I wasn’t aware that wind was night-dominant. It makes sense to have technologies that are complementary timewise. I wouldn’t do it for diversification alone, though, but only because there are useful differences in their operating characteristics that result in complementarity. Otherwise, the diversity should be limited to R&D (IMO).
I often wonder why this point is so readily “missed.” The downside is lack of diversity. A policy that produces a one trick supply pony is limited by the constraints attendant to that technology. The goal of creating policy enabling renewables to be introduced into the mix is diversity. The problem of conventional energy is lack of diversity; the volatility of oil and gas pricing peg the economy to those fluctuations. If you think of energy as your investment portfolio, just as diversifying your investments mitigates the risk of your personal wealth, the same is true for the economics of a national or state energy portfolio. Diversity ameliorates risk.
So for example, last summer when we had record heat for extended time and the spot market price of electricity exceeded $3500 per MW – we had industrial “brown outs’ – industry electricity usage was curtailed to prevent actual brown and black outs. The wind from west Texas was of NO help to the peak load demand that necessitated curtailment. Why? Because the wind in west Texas blows at night – not at PEAK demand usage times in the hot part of the day. Had we had solar deployed at scale, solar produces electricity during peak demand, and would have mitigated the load spikes.
Texas demand is expected to continue to grow. If you experience a black out during another hot Texas summer despite all the Texas wind deployed, I’ll bet you suddenly find what you seem to have “missed.” My AC went out twice last summer. I found myself sleeping on my lawn at 3am because it was cooler than my house. Care to have a mass Texas camp out?
I must have missed something. What’s the downside of letting the market choose the winners? If wind is cheaper than solar, why not go with that? Don’t you want the cheapest RE source to compete with fossil fuels?
If I may respectfully call BS on the “explanation” you heard at TREIA. TREIA as an organization has never dared to embrace the truth that a naked Renewable Portfolio Standard (”RPS”) as an economic mechanism will produce only one form of renewable energy generation, wind, the cheapest form. It has nothing to do with how “abundant” is a state’s wind source. I wrote my master’s of law thesis on solar energy policy, examining the special needs of solar to overcome market barriers. My thesis reviewed economic modeling performed in other parts of the world on renewable incentives. In particular, Europe, having fixed mandatory targets to achieve deployment of multiple forms of renewable generation, performed economic modeling measuring which policies best deployed every form of renewable generation. Europe compared naked RPS to Feed-In Tariffs to reveal why a naked Renewable Portfolio Standard (with RECS) such as Texas’ policy produces a lopsided deployment of one form of generation only. The short answer is the RPS as a mechanism forces forms of renewable generation to compete on price.
In comparison, Feed-In Tariffs, or other policies structured to address the needs of solar, such as SRECs result in solar generation. I offered my studies to TREIA leadership so that it could provide informed policy support for solar in Texas, but the leadership, Russel Smith and John Pitts refused to become informed of the issues that are now widely known in the rest of the world. Instead, Pitts and Smith iterated their blind Texas mantra “we don’t pick technology winners; we let the market choose.” In their deliberately uninformed stupor, they support a policy that is widely known for choosing a sole winner, wind.
Other states in the United States are well aware that a naked RPS does not support more expensive forms of generation, such as solar. NREL, IREC, have extensive papers addressing the policy’s economic mechanism. To overcome this hurdle, many states have implemented SRECs. New Jersey’s SREC policy worked so well in deploying solar that New Jersey became the second highest generator of solar energy, behind California. TREIA meanwhile refused to read or study and maintained self imposed ignorance. To cover up its refusal to support solar policy and industry in Texas and to feign powerless, it uses euphemisms like “Texas has an abundant wind resource.” Texas also has an abundant solar resource! Texas has a much better solar resource, insolation, than New Jersey, Pennsylvania, Germany and UK, but those states and countries all have policies that support solar and as a result, have robust solar deployment, while Texas does not.
In Texas municipally owned utilities are outside of the deregulated market. They have launched policies and strategies in support of solar. Texas Munis including Austin Energy and San Antonio’s CPS and COOPs such as Bluebonnet Electric Cooperative in Bastrop have independently implemented policies and strategies to deploy solar. CPS is deploying over 400 MW of solar power.
There are other vehicles to achieve solar deployment. Its takes effort and will. Don’t look to TREIA to know what they are. Texas solar markets could bring as much economic profitability to this state and as much energy as the Keystone Pipeline. Texas needs to deploy as much solar to offset the need for carbon intensive forms of energy. We have a short window to make this happen. While many claim that we have long cheap gas reserves, some are quoting the IEA as stating that even with modern technology for gas, i.e., fracking; we may have only 15 years of gas reserves! Imagine if this is true, where we will be 15 year from now on our current course.
We need to be impatient with current progress. We need to think, act and deploy solar at scale now. Most importantly, we need to not look for leadership from groups like TREIA who propose to work in support, while feigning ignorance. The price of solar has decreased dramatically. Now is the time to build out massive solar generation.
Texas' RECs are generic in nature. There are no solar, wind, bio etc recs specifically. There are RE credits that are so abundant due to the tremendous amount of wind power generated that they are essentially worthless. This would change immediately if legislation could be passed to separate them.
This was the explanation I heard from TREIA several years ago.
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From: "Tyra Rankin" <tyra@...>
Date: Sat, 10 Mar 2012 21:58:26 -0600
Subject: RE: [hreg] SRECs in Texas
Texas has never voted for an SREC – a Solar Renewable Credit. This is one among many reasons we don’t have more solar generation in Texas. Texas has a Renewable Portfolio Standard that issues RECs – Renewable Energy Credits. Solar qualifies for RECs, but the current price is so low as to be completely worthless. You can find out more information on the ERCOT and IREC websites.
Does anyone know if it is possible for a Texas homeowner with a small solar PV system earning SREC (Solar Renewable Energy Certificates)?
If so, how is it done?
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