Texas, the Republican state that dominates America’s oil & gas industry, has quietly become a clean energy superpower.
In the first half of 2024, wind and solar accounted for 38% of electrical output in the state’s main grid, which is managed by ERCOT. Together with nuclear, clean sources comprised 47% of the mix. That’s up from 31% just five years ago, according to data collated by Joshua D. Rhodes, a research scientist at The University of Texas at Austin.
Important milestones continue to fall. In March, solar output exceeded coal for the first time as the shift from the dirtiest fossil fuel accelerates. Texas has added more solar capacity per capita in a year than any US state or country in the world, says research group Ember.
The Lone Star State now leads the US in wind and utility-scale solar capacity, and is on track to overtake California in battery storage as well.
Over the next 18 months, Texas plans to add another 35GW of wind, solar, and battery storage capacity – far more than any other state, according to Michael Thomas, CEO of research group Cleanview.
That’s partly in response to soaring demand for electricity as the state’s population swells, new power-hungry data centres come online, bitcoin miners find a home in Texas, and a manufacturing boom materialises. In fact, ERCOT recently forecast that electricity demand could nearly double in just the next six years.
Why renewables are surging: While the likes of California have policies in place to decarbonise their power grids, Texas does not. Instead, the state relies on market forces.
Texas deregulated its electricity market in the early 2000s, meaning developers now compete fiercely on cost. Over the past decade or so, this dynamic has given wind and solar developers the upper hand, Rhodes tells The Progress Playbook, adding that federal tax credits for these technologies have lent an extra hand in recent years.
And with the increasing penetration of variable renewables driving up volatility, the business case for storage projects has become highly attractive too – batteries charge up when there’s a surplus of power and prices are low, and then sell that energy into the grid when prices are high, typically in the evening.
Texas will add some 6.4GW of battery storage capacity in 2024 alone, according to the Energy Information Administration. This will help make the state more resilient to extreme weather events and help to reduce system costs, studies of existing facilities show.
Across all technologies, project developers favour Texas thanks to its smooth grid interconnection process – known as “connect and manage” – which makes it relatively quick and easy for them to secure approvals, partly by allowing for curtailment. Light regulations also make it quicker to build transmission infrastructure than in other states, which means more power projects can come online.
The ease of building power infrastructure has given rise to a positive feedback loop, Rhodes says. Data centre operators, manufacturers, and other big energy users favour Texas because they want access to lots of clean energy, and this prompts further investments in wind, solar, and battery storage.
The lesson for other jurisdictions, Rhodes says, is “build it [transmission infrastructure] and they will come”.
Encouragingly, the state’s renewable energy industry now has plenty of support in conservative rural areas because of the economic benefits it offers, he says. It might not be as politically strong as the oil & gas industry, but it’s catching up.
Yes, but: The sharp surge in Texas’ power needs could even outpace the growth of renewables, meaning there’s a risk that generation from fossil fuels could increase as well.
As of end May, project developers in the ERCOT interconnection queue had submitted proposals for 130GW of new battery storage capacity, 138GW of solar, 24GW of wind, and 14GW of gas.
Not all of these projects will materialise, of course. But BloombergNEF projects that Texas will have installed 62 more gigawatts of utility-scale solar by 2035, compared to today.
