Will solar and wind generate revolution or evolution?

Date
10/21/2014

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Dramatically decreasing capital costs for solar and wind technologies present the prospect of an unprecedented boost for Texas companies. Sweetening the deal is the fact that "fuel" from the sun and the wind is free. Forever. No long-term contracts to negotiate and pay out over time.

Moreover, several companies now offer payment plans that enable consumers to install rooftop solar electricity, while eliminating first-cost sticker shock. In addition, developers are starting to include rooftop photovoltaics (PV) in their standard residential packages.

Still, the nagging issue: The sun doesn't always shine and the wind doesn't always blow. This requires back-up, or "firming," power from natural gas.

This is the "new Texas blend" of generating fuels. Importantly, the market also is relatively new - Texas' deregulated electricity sector.

What does this portend for the market players, in particular vertically-integrated municipal utilities and electric cooperatives? Do they need to change their business models or infrastructure to accommodate small generators that are dispersed across their service areas? Does the affordability of point-of-use solar and wind generation (distributed generation) pose unique opportunities for unregulated retail electric providers (REPs)?

"We are aware of REPs that are investigating the potential of creating virtual utilities - utilities 'constructed' not of bricks and mortar, but of aggregated small, dispersed generators," said Russel Smith, executive director of the Texas Renewable Energy Industries Association (TREIA). "We believe that change in utility structures is inevitable; we just don't know what form or how long it will take."

These are among the issues that will be explored at Texas Renewables 2014, "Shaping Texas' Evolving Energy Markets," to be held Nov. 3-6 at the Sheraton Dallas hotel.

One panel in particular will directly address the issues surrounding utility models. It is titled "New Texas 'Utility' Models: Evolution or Revolution?" and will be moderated by Dan Seif, Senior Consultant at The Butler Firm in Austin. Ken Donohoo of Oncor Electric Delivery Company in Dallas and Peter Muhoro of Pedernales Electric Cooperative
 in Johnson City are among the panel of expert discussants.

Texas Renewable Energy Industries Association

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