Peak Energy Demand in Texas: Is Solar the Solution?

By Iris Dimmick

More than 200 people from the solar industry, construction offices, law firms and general public attended the Energy Symposium at the Pearl Stables on Tuesday to consider a fundamental question: Can solar-generated electricity help solve the state’s growing peak demand for energy?

The answer, it seems, is not now, maybe not anytime in the forseeable future. But solar will help, and will become a more important part of the CPS Energy portfolio in the coming decades.

In 2011 San Antonio obtained 50.6 per cent of its electricity from coal, 25.7 percent from nuclear power and 11 percent from natural gas via CPS Energy. About 10 percent comes from renewables, a percentage  CPS Energy aims to grow to 20 per cent by 2020. Most of that energy last year and today is wind-generated; solar accounted for a mere 0.1 percent of San Antonio’s energy mix. (The remaining 2.8 percent consists of purchasing power and demand response – the CPS energy efficiency/curtailment program)

However, maybe the kind of change that Solar San Antonio, which organized the Tuesday gathering, was hoping to encourage with this panel discussion is not the kind that you can see and measure in one night.

During the summer months, San Antonio utility customers consistently exceed the electric load forecasts. Energy consumption has grown by 17.5 over nine years and peak demand has followed – rising by 13.8 percent. “This is a good challenge,” said Trip Doggett, president and CEO of the Electric Reliability Council of Texas (ERCOT). One side effect of a flourishing economy is a higher demand on the grid, he said.

How will solar power help meet that rising demand?

Emily Duncan, manager of government affairs at the Solar Energy Industries Association (SEIA), spoke about the potential for solar-generated electricity  in San Antonio. “(Solar generation) coincides with peak demand, uses little to no water, is highly scalable and quick to market …. and can be geographically targeted,” Duncan said.

The most encouraging factor, she added, was the long-term set prices that come from contracting a large project – compared to the potential price volatility of natural gas. “Gas is cheap right now, but we don’t know how long it’s going to stay that way,” Duncan said during the Q&A in response to a question from the audience about the price disparity.

The average cost of an installed PV system has decreased by 30 percent since 2010 and the cost per kilowatt-hour (kWh) is getting closer and closer to natural gas and coal, thanks to rebates and tax exemptions in San Antonio and across the United States.

At the center of the discussions were recent studies carried out by the Cambridge, Mass.-based Brattle Group, an international investment and economic consultancy firm, which concluded that solar generation is a viable option for Texas and San Antonio. One study estimates that the installation of 5,000 megawatts (MW) of solar PV generation would have saved Texan utility customers approximately $520 million in 2011. However, the costs of installation are not included in this calculation.

CPS’ recent contract with OCI Solar Power will give San Antonio access to 400 MW of solar-generated electricity that most likely will be distributed to heavy users around the city. Cris Eugster, executive vice president & chief sustainability officer for CPS Energy, said during his presentation that a large reason for the attractiveness of solar-generated power is the predictability of fixed, long-term costs. Lack of moving parts means much lower operations and maintenance costs for the life span of the solar units (typically 25 years).

Solar isn’t a miracle fix. Speakers seemed to agree that solar won’t perfect the system; it is a viable energy source needed to further diversify the city’s renewable energy mix to meet growing peak load demands. CPS provides electricity to most of Bexar County and to portions of surrounding counties – more than  700,000 electric and 325,000 natural gas customers. As the largest municipally owned energy utility, CPS is also the largest purchaser of wind energy in the United States with 859 megawatts (MW) and more on the way. Public Utility Commissioner Rolando Pablos also cited San Antonio’s growing economy and population as part of the cause for high energy demands.

“As a result, we’re seeing growing pains,” Pablos said, “I realize I might be preaching to the choir, but … solar will help.”

That choir of solar supporters, however, sometimes sing different versions of the same tune.

Pablos emphasized the importance of centralized, large-scale solar installations that spread the costs out among customers.

“We have to focus on utility-scale solar,” Pablos said. “It’s scalable and (CPS is) doing it in a very measured manner.”

Doggett’s presentation pointed out that on hot days, it’s the residential electricity use that almost doubles.

Solar San Antonio Executive Director Lanny Sinkin cited that high residential consumption as one reason to also decentralize solar generation to smaller units. It’s a common disagreement among solar supporters – where should the focus be: residential, commercial or utility?

Everywhere, Sinkin said, “It’s going to be done at the household level and the commercial, utility, and state level.”

Kristin Charipar, policy analyst for Juwi Solar Inc. based out of Boulder, Colorado, said it was encouraging to see so many people supporting the solar industry.

“It shows interest and capital to get this done,” Charipar said, “Now it’s just a matter of figuring out the policy mechanisms.”

Juwi (pronounced: “you – we”) Solar designed, built and continues to maintain the 16 MW capacity Blue Wing Solar Project south of downtown.

“My company does utility projects, which is one piece of the pie – we need to unite,” Charipar said.

Sinkin also took issue with the panel’s unwillingness to identify climate change as a reason to cease creation of more energy facilities that use fossil fuels. He asked the speakers at what point will utilities start factoring in the externalities of climate change – health, environmental and economical – into the cost of those energy sources.

The question was met with an awkward silence.

For most of the discussions about what externalities to include in energy prices, focus was on the positive effects of solar instead of the negative impact of fossil fuels.

“The solutions are not obvious or easy,” Sinkin said, “but solar is part of that solution.”

There was also talk about raising the price cap on electricity – which could increase residential and commercial conservation efforts but also create an attractive market for more energy providers (For background about this issue, click here to go to stateimpact.npr.org).

Not all questions were answered, or even asked on Tuesday. Was it progress?

“It’s a good start,” Sinkin said.

Find out more about CPS solar energy tax credits and rebates at: www.cpsenergy.com/Residential/Rebates/Solar_Rebates/index.asp Find out more about the history of ERCOT at: StateImpact.npr.org or at The Texas Tribune.

New to the Rivard Report and San Antonio, Iris Dimmick graduated from Central Washington University with a B.A. in journalism with an emphasis on online media and energy studies. Iris currently works as an intern reporter, photographer, and assistant web editor for the Rivard Report. You can follow her on Twitter @viviris

Full disclosure: The Arsenal Group conducted a four-month review of CPS Energy communications for the utility starting in June 2012. Monika Maeckle, a former member of the The Arsenal Group and wife of Robert Rivard, now works at CPS as its Director of Integrated Communications. This disclosure was published Sept. 26, 2013 in response to an Express-News inquiry.