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ERCOT - Wind generation passes Coal for first time in 2020

ERCOT recently released its full 2020 set of generation data.

For the first time, total wind generation surpassed coal generation. A 10.4TWh increase in wind generation along with a 9.3TWh decrease in coal assured that wind is now far ahead of coal and pulling away. Strong growth in solar generation meant that NG generation also declined in 2020 - particularly simple cycle generation.  Great news all-around.

Wind capacity is forecasted to grow by another 4GW(about 14%) in 2021and solar is forecasted to grow by over 6GW(150%) in 2021. The continued strong "teamwork" between these two sources means that the zero-carbon share of electricity generation in Texas will continue to grow.

When will solar generation pass coal generation for a full year? 

Joe Deely's picture

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Matt Chester's picture
Matt Chester on Jan 18, 2021

Looks like 2019-2020 was the largest single year gain for solar-- while the Lonestar STate has embraced wind for a while, it's good to see solar finally seeing some investment (especially as wind/solar can work well in complementary fashion in terms of when they're generating)

Joe Deely's picture
Joe Deely on Jan 18, 2021

Looks like 2019-2020 was the largest single year gain for solar-- while the Lonestar STate has embraced wind for a while...

Exactly... below I have added an additional year to the chart. Wind has shown a pretty steady increase but solar has now exploded onto the scene. You can expect solar to more than double generation in 2021 vs 2020.

Also note how quickly wind passed coal... Coal was ahead by 25TWh in 2018 and in just two years Wind is now ahead by 19 TWh. Two trains going in opposite directions.

Nathan Wilson's picture
Nathan Wilson on Jan 18, 2021

"... while the Lonestar STate has embraced wind for a while, it's good to see solar finally seeing some investment ..."

That's not necessarily good news. According to the latest data from DOE NREL, wind energy is still cheaper to build at large scale than solar PV (both have an installed cost around $1.3/Watt_AC in Texas, but windpower has a capacity factor that is much higher). 

A pivot from wind to (more expensive) solar could mean that developers believe that wind is hitting the point of diminishing cost effectiveness (that doesn't mean it can't keep growing, but it might require some sort of stronger policy support).  

The latest report on the windpower market from the Lawrence Berkeley National Labs supports this as well (link):

Value of windpower-2020 

Note: the green bars show the contribution of location, which could be addressed with improvement to transmission, but the blue profile (which just means, "produces a lot when prices are low") bars will be much more difficult to address.

Joe Deely's picture
Joe Deely on Jan 19, 2021

Wind generation has lowered prices in late afternoon/evening and demand is generally higher on ERCOT during the day. So yes, solar is definitely more valuable right now than wind on the ERCOT grid.

That said, as of Nov 2020 ERCOT had about 25 GW of wind capacity and it looks like another 10GW of wind capacity will be added over the next couple of years. 

Throw in all the solar generation that is being added and coal in TX is gonna be in a world of hurt. Expect to see a bunch of coal retirement announcements in the mid 20s.

What will that mean?  With less coal the "value" of wind will go up. More wind projects will "pencil out".

Note: we will also see a lot more longer-term storage being added to ERCOT. 

Curious - where did you get the "latest data" on NREL prices for solar? The only thing I could find was from 2018 - which of course for solar is old news. From what I can see, Solar in TX is now at or less than $1.0/Watt_AC.

Nathan Wilson's picture
Nathan Wilson on Jan 22, 2021

Looking back at the NREL reports I was using, the ERCOT number from the 2020 wind report that I linked does show $1.31/Watt, but you're correct, the 2020 solar report (here) does not break out a cost for Texas.  I didn't check the tabular data.

I think that probably I looked at $1.4/W_AC national averages on p. 18, and was being lazy and ball-parked it.  A better estimate would back out the LCOE at 62% of national average on p. 38, with capacity factor matching the 23% national average, which would put it in the range of $0.86/Watt_AC, very close to your number.

For wind at $1.3/W, assuming 45% capacity factor, the cost is $2.89/Watt_avg, and PV at 23% would be $3.74/Watt_avg.  So at least for the 2019 data in the 2020 reports, windpower is still cheaper.

Joe Deely's picture
Joe Deely on Jan 24, 2021

Nathan,

Thanks for that. I just read an article - which is now behind paywall - that ties in very closely to what you are saying.

The below chart is from that article and shows 2020 pricing.

Notice that all of these values are below $30/MWh, and half of them are below $20. The lower end of the spectrum is dominated by wind in wind-heavy markets, and the upper end is filled with solar in wind-heavy markets or wind in solar-heavy markets.

SPP generates a truly amazing amount of wind: in 2020, wind accounted for over 30% of their generation. Overall, SPP North Wind wins the prize for 2020’s Least Expensive Renewable Resource, at $12.50/MWh.

Plus this comment shows why solar will be more popular in short-term for ERCOT vs wind.

ERCOT solar is still a fraction of the market, offsetting just over 2% of the region’s load. However, ERCOT’s tendency towards midafternoon and early evening price spikes is a prime opportunity for solar. ERCOT Houston Solar, at $29.15/MWh, wins 2020’s Most Expensive Renewable Resource.

Matt Chester's picture
Matt Chester on Jan 25, 2021

ERCOT solar is still a fraction of the market, offsetting just over 2% of the region’s load. However, ERCOT’s tendency towards midafternoon and early evening price spikes is a prime opportunity for solar. 

It's nice if much of the discussion of what energy storage can or can't do becomes somewhat (though certainly not completely) moot because we build out generation sources that more typically align with demand patterns!

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