How oil-rich Texas became a leader in renewable energy, while Alberta hit the brakes
[url]https://www.theglobeandmail.com/business/article-texas-alberta-renewable-energy/[/url]
So why is Texas embracing green energy? Since 2011, wind power capacity in the state has quadrupled to nearly 40,000 megawatts, or nearly 29 per cent of total available generation, according to the Electric Reliability Council of Texas, known as ERCOT. That capacity could increase by more than 5 per cent in the next year, based on planned and potential projects, it said.
The growth in solar is even more dramatic. With more than US$28-billion invested, solar has surged from 70 MW in 2011 to 26,814 MW today. In 12 months, that could jump by another 56 per cent, based on planned projects with final security in place as well as proposed developments.
Battery storage is also taking off, in the forms of stand-alone projects and add-ons to wind and solar. Capacity could more than double in the next year to more than 19,000 MW. In September, France’s TotalEnergies SE started up two solar projects in southeast Texas, both with integrated storage, with combined capacity of 1.2 gigawatts.
It has not all been smooth sailing, and not every Texan is on board. In February, 2021, Winter Storm Uri unleashed frigid temperatures, snow and freezing rain on the southern state, causing widespread power outages and forcing the economy to a near standstill.
Initially, renewable-energy opponents seized on the crisis to blame wind and solar generation. During the blackouts, Republican Governor Greg Abbott said in a Fox News interview that renewables, which made up more than 10 per cent of generation, “thrust Texas into a situation where it was lacking power on a statewide basis.”
However, reviews showed the network collapsed under a combination of events, including surging demand and outages at power plants that were not designed to withstand winter conditions – natural gas and coal stations among them. In addition, Texas does not draw on electricity connections to other states, making it a virtual island in the U.S. power system.
This past summer, renewables proved their mettle. As temperatures soared well into the triple digits Fahrenheit for weeks at a time, electricity demand in Texas ([url]https://www.theglobeandmail.com/topics/texas/[/url]) reached record levels as residents and businesses cranked up air conditioners. The bright sunshine allowed solar generation to hit records of nearly 21,000 MW in August, about a quarter of peak daytime demand, according to energy data provider Grid Status.
Despite his bluster in 2021, Governor Abbott has placed no limits on renewables. In fact, his government offers incentives to developers that allow them to contribute directly to local infrastructure in lieu of taxes for periods of up to 10 years. Andrew Mahaleris, the Governor’s press secretary, said this is part of an all-of-the-above energy strategy that guards against “harsh job-killing restrictions and unnecessary regulations.”
In Knox County, the wind industry’s payments account for about 50 per cent of the annual budget, and have halved residents’ tax bills since before wind farms were introduced eight years ago, County Judge Stan Wojcik said in his office in Benjamin, Tex., the county seat.
At the time, the local government had US$500,000 in reserves. Today, with about 300 turbines in operation, that kitty has grown to US$6-million. Now, developers are planning another wind farm straddling Knox’s southern county line.
The industry’s expansion has given citizens improved public resources, buildings and services without tax hikes, said Judge Wojcik, whose role is judicial and administrative. Yes, some locals have pushed back, but not a lot, he said. They tend to be landowners who are not getting lease payments from the industry.
But unlike Texas, Alberta has short winter days with little wind, and that can limit generation during cold snaps. Supporters point out, though, renewables are never relied upon for foundational generation, known as baseload power. Natural-gas-fired electricity has that role, and is expected to make up about 60 per cent of Alberta’s generation capacity in 2025 after more than 2,000 MW of gas power was added this year.
Another reason Texas has gone full bore on renewables while Alberta pumped the brakes, however, could be explained by how oil and gas feeds the public purse, said Kristen van de Biezenbos, a professor at California Western School of Law in San Diego who lectures on U.S. and Canadian electricity policy.
In Alberta, the oil industry signs lease agreements with landowners, but it pays royalties to the government on the vast majority of land, and that has a direct impact on provincial revenue. If natural gas fuels generating plants across the province, that means steady demand for it. Unlike the handling of renewables, the government has placed no new restrictions on oil and gas development.
In Texas, the oil industry makes its agreements on royalty payments and leases directly with landowners, not the state, as do developers of wind and solar projects. This helps explain why renewables are so much more mature and ingrained in the state economy, Prof. van de Biezenbos said.
“There are taxes that go to the state and to the federal government. But most of the money, the direct money from the royalties, is not going to the state of Texas,” she said. “You don’t have the same reliance, true reliance on fossil fuel revenues in Texas that you do in Alberta – the only change is going to be who’s making money from what.”
[url]https://www.theglobeandmail.com/business/article-texas-alberta-renewable-energy/[/url]
So why is Texas embracing green energy? Since 2011, wind power capacity in the state has quadrupled to nearly 40,000 megawatts, or nearly 29 per cent of total available generation, according to the Electric Reliability Council of Texas, known as ERCOT. That capacity could increase by more than 5 per cent in the next year, based on planned and potential projects, it said.
The growth in solar is even more dramatic. With more than US$28-billion invested, solar has surged from 70 MW in 2011 to 26,814 MW today. In 12 months, that could jump by another 56 per cent, based on planned projects with final security in place as well as proposed developments.
Battery storage is also taking off, in the forms of stand-alone projects and add-ons to wind and solar. Capacity could more than double in the next year to more than 19,000 MW. In September, France’s TotalEnergies SE started up two solar projects in southeast Texas, both with integrated storage, with combined capacity of 1.2 gigawatts.
It has not all been smooth sailing, and not every Texan is on board. In February, 2021, Winter Storm Uri unleashed frigid temperatures, snow and freezing rain on the southern state, causing widespread power outages and forcing the economy to a near standstill.
Initially, renewable-energy opponents seized on the crisis to blame wind and solar generation. During the blackouts, Republican Governor Greg Abbott said in a Fox News interview that renewables, which made up more than 10 per cent of generation, “thrust Texas into a situation where it was lacking power on a statewide basis.”
However, reviews showed the network collapsed under a combination of events, including surging demand and outages at power plants that were not designed to withstand winter conditions – natural gas and coal stations among them. In addition, Texas does not draw on electricity connections to other states, making it a virtual island in the U.S. power system.
This past summer, renewables proved their mettle. As temperatures soared well into the triple digits Fahrenheit for weeks at a time, electricity demand in Texas ([url]https://www.theglobeandmail.com/topics/texas/[/url]) reached record levels as residents and businesses cranked up air conditioners. The bright sunshine allowed solar generation to hit records of nearly 21,000 MW in August, about a quarter of peak daytime demand, according to energy data provider Grid Status.
Despite his bluster in 2021, Governor Abbott has placed no limits on renewables. In fact, his government offers incentives to developers that allow them to contribute directly to local infrastructure in lieu of taxes for periods of up to 10 years. Andrew Mahaleris, the Governor’s press secretary, said this is part of an all-of-the-above energy strategy that guards against “harsh job-killing restrictions and unnecessary regulations.”
In Knox County, the wind industry’s payments account for about 50 per cent of the annual budget, and have halved residents’ tax bills since before wind farms were introduced eight years ago, County Judge Stan Wojcik said in his office in Benjamin, Tex., the county seat.
At the time, the local government had US$500,000 in reserves. Today, with about 300 turbines in operation, that kitty has grown to US$6-million. Now, developers are planning another wind farm straddling Knox’s southern county line.
The industry’s expansion has given citizens improved public resources, buildings and services without tax hikes, said Judge Wojcik, whose role is judicial and administrative. Yes, some locals have pushed back, but not a lot, he said. They tend to be landowners who are not getting lease payments from the industry.
But unlike Texas, Alberta has short winter days with little wind, and that can limit generation during cold snaps. Supporters point out, though, renewables are never relied upon for foundational generation, known as baseload power. Natural-gas-fired electricity has that role, and is expected to make up about 60 per cent of Alberta’s generation capacity in 2025 after more than 2,000 MW of gas power was added this year.
Another reason Texas has gone full bore on renewables while Alberta pumped the brakes, however, could be explained by how oil and gas feeds the public purse, said Kristen van de Biezenbos, a professor at California Western School of Law in San Diego who lectures on U.S. and Canadian electricity policy.
In Alberta, the oil industry signs lease agreements with landowners, but it pays royalties to the government on the vast majority of land, and that has a direct impact on provincial revenue. If natural gas fuels generating plants across the province, that means steady demand for it. Unlike the handling of renewables, the government has placed no new restrictions on oil and gas development.
In Texas, the oil industry makes its agreements on royalty payments and leases directly with landowners, not the state, as do developers of wind and solar projects. This helps explain why renewables are so much more mature and ingrained in the state economy, Prof. van de Biezenbos said.
“There are taxes that go to the state and to the federal government. But most of the money, the direct money from the royalties, is not going to the state of Texas,” she said. “You don’t have the same reliance, true reliance on fossil fuel revenues in Texas that you do in Alberta – the only change is going to be who’s making money from what.”
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