Natural gas-fired generation and renewables (wind and solar) have the future power generation needs of Texas covered; no new coal plants are necessary, according to a report by The Brattle Group that was commissioned by the Texas Clean Energy Coalition.

The report, "Exploring Natural Gas and Renewables in ERCOT, Part II: Future Generation Scenarios for Texas" follows a previous Brattle study of the Texas generation market that also touted gas-fueled and wind power (see Daily GPI, June 13). ERCOT, the Electric Reliability Council of Texas, operates the electric grid for 75% of the state.

With more than 12,000 MW of installed generating capacity, Texas is the largest state producer of wind power in the country. Texas also is the leading U.S. producer of natural gas, and the state generates more than 40% of its power from natural gas-fueled plants, according to Brattle. "Add to that the prospects for solar energy from the abundant sun and Texas is in a position to produce cleaner, more affordable and reliable electricity than ever before while helping improve economic well-being for Texans," the firm said.

In the latest report, Brattle examined the future of gas-fueled and renewable power in Texas through the simulation of several grid expansion scenarios. "In each scenario, our modeling system simulates both the market-driven additions and retirements of capacity by power generators and the operation of the system by ERCOT, down to the intra-hour time frame, once these additions are installed," said Brattle Group Chairman Peter Fox-Penner.

"By combining the long- and short-term time frames, our approach ensures that the resource additions selected by the market result in a system that is able to provide grid power at the lowest total cost consistent with reliability standards."

Under the range of scenarios examined, natural gas and renewables both play substantial roles in ERCOT and provide all new generation needed to respond to growth in the state's population. No new coal plants are built in any scenarios, Brattle said.

Across the more likely scenarios, wind and solar grow from their current 10% generation share to levels between 25% and 43%. Natural gas-fired generation provides all of the remaining incremental generation, adding 12-25 GW of new combined-cycle capacity -- a 38-80% increase in the current installed base.

The mix of new gas and renewable generation is sensitive to the price of natural gas and cost declines in wind and solar power, Brattle said. "Changes in these three factors can cause significant shifts in the mix of future installations, leading to a wide range of plausible generation shares for wind, solar, and natural gas," the study found.

Among gas-fired power plants, nearly all future capacity additions in the Brattle scenarios are combined-cycle gas turbine (CCGT) plants rather than traditional gas turbines, due to the fact that CCGTs are more efficient and expected to be more flexible than other turbines.

The study found that the ERCOT system could accommodate all levels of variable renewables likely to occur during the 20-year period considered with no reliability problems. However, accommodating higher levels of renewables required the model to use an additional ancillary service, known as the intraday commitment option, and to adjust the levels of current ancillary services.

The analysis showed that federal production tax credit and ERCOT ratepayer funding of new transmission lines remain important drivers of wind development.

Existing coal units in ERCOT remain profitable and are not retired unless a relatively stringent federal carbon policy is adopted, Brattle said. "A federal carbon policy requiring 90% capture and storage of carbon, for example, would prompt the retirement of most ERCOT coal units.” Under the strong federal carbon policy scenario, gas and renewable generation would together replace the energy formerly supplied by coal plants. In this case, renewable energy could rise to become 43% of ERCOT generation by 2032.