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Texas wind capacity to exceed coal capacity by 7,000 MW in 2018

By the end of 2018 operating wind capacity in Texas is projected to exceed operating coal capacity by almost 7,000 MW, according to an S&P Global Market Intelligence analysis as of Oct. 30.

Including coal-fired power plants that Vistra Energy Corp. has said it will shut down in the first few weeks of 2018, the gap between operating wind and coal capacity widens to more than 11,000 MW. The announced retirements include Sandow, Sandow (Unit 5), Big Brown and Monticello ST, which together total more than 4,000 MW. According to an S&P Global Market Intelligence analysis, the operating costs of these coal plants have been running at higher than wholesale power prices in the Electric Reliability Council of Texas market. According to ERCOT, the plants are no longer needed for reliability and could stop operating.

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By the end of 2017, operating wind capacity in Texas is anticipated to be more than 22,000 MW, and if scheduled additions become operational as planned, could increase to more than 30,000 MW by the end of 2018. According to the analysis, there would be almost 24,000 MW of operating coal capacity by the end of 2017, and removed the Vistra units set for retirement, operating coal capacity is projected to fall to around 19,000 MW.

The shift in the generation mix in Texas is due to a number of factors, including a state-mandated renewable portfolio standard and a multibillion-dollar investment in transmission infrastructure that particularly encouraged wind development, low natural gas prices that contributed to low wholesale power prices, and environmental regulations which have already made coal plants uneconomical to run. While in 2011 coal capacity exceeded wind by almost 13,000 MW, by 2020 the situation could reverse, with wind capacity exceeding coal capacity by 13,000 MW.

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Texas consists of more than 21,000 MW of operating wind capacity and almost 14,754 MW of planned wind capacity with a known online year, according to an S&P Global Market Intelligence analysis as of Oct. 30. Wind plant developers have two more years to get projects funded as the federal tax credit for wind plants will expire by the end of 2019, though legislation has been introduced along with federal tax reform proposals to end the credit earlier.

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NextEra Energy Inc. is currently the largest owner of operating and planned wind capacity in Texas with 4,361 MW. Nearly 20% of that total is located in Taylor County, which is west of the Dallas-Fort Worth metro area and includes the city of Abilene.

Tri Global Energy LLC owns more than 3,000 MW of planned wind capacity in the state, of which almost 2,000 MW are expected to come online in 2018.

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With more than 8,000 MW, Vistra is currently the largest owner of operating coal capacity in Texas, though that total will be cut by half — to about 4,000 MW — if all the announced retirements are completed. NRG Energy Inc. owns the second-largest amount of coal capacity in the state, with a little more than 4,000 MW.

In 2016, net generation from coal plants was more than twice the output from wind plants. This multiple has decreased since 2011, when net generation from coal plants was more than five times the generation from wind plants.

The total fleet capacity factor for coal plants in Texas fell from 76.86% in 2011 to 57.06% in 2016, while total fleet capacity factor for wind plants remained close to 30% from 2011 to 2016.

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