Texas Renewables

Texas Renewables

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Providing Revenue to Local Governments

Renewable energy accounted for a total of $107 million in local government tax revenue in Texas last year; $59.7 million to school districts, $27.2 million to counties, and the balance spread among a range of other local jurisdictions (such as hospital districts).

In addition to property tax payments, renewable energy projects often make PILOT (payments in lieu of taxes) and revenue protection payments under Chapter 313 agreements with local school districts. In 2017, renewables paid $103.4 million in these supplemental payments to school districts, for a total of $210.4 million paid to local governments overall.

“Any extra money for somebody in agriculture is a plus. The stable income makes a difference.”

Providing Revenue to Landowners in Texas

Industry sources indicate that $4,000/MW per year is an appropriate estimate of the average landowner payment; using this figure against the 22,599 MW of installed wind capacity yields a direct estimate of at least $90.4 million to Texas landowners last year.

The direct payments of $90.4 million yield a 2017 total impact of $134.4 million in economic activity/output, $78.0 million in value-add, $40.0 million in earnings, and a total of 1,006 permanent jobs. Table 5 provides a detailed breakdown by sector of the economy.

“We always have a lot of wind around here and now we can make some money to set off the price of farming.”

Reducing Energy Costs for Customers

Wind and solar power reduced wholesale electricity market costs between $350M to $960M per year out of the total energy dispatch cost of about $10 – $13B per year. From 2010-2017, wind and solar saved consumers $5.7 billion.

Figure 5 shows the annual customer direct savings attributable to renewable energy. As expected, the impact of renewables on wholesale electricity market prices is greater at higher natural gas prices. This result indicates that renewables in ERCOT can provide a price hedge against volatility of natural gas prices.

Customer savings during 2017 due to renewables amounted to $855.9 million. These savings give both residential and non-residential customers additional money to spend elsewhere in the economy, with the assumption that it matches typical applicable spending patterns. When the most recent year is run through the RIMS II system for Texas, the total average annual impact is $1,368.5 million in economic activity/output, $779.4 million in value-add, $390.4 million in earnings, and a total of 9,223 permanent jobs. Table 7 provides a detailed breakdown by sector of the economy.

“I love that wind power is beneficial and has very minimal impact to our environment.”

Providing Well-Paying Jobs

AWEA has tracked the number of jobs related to wind energy for some time, reporting just over 24,000 jobs during 2017, compared to less than 10,000 as recently as 2013. The Solar Foundation, meanwhile, conducts the Solar Census on an annual basis. Texas’ 2017 employment across the solar industry is given at just under 8,900. Collectively, industry-related employment is just short of 33,500, a figure consistent with a recent Department of Energy (DOE) estimate of about 36,100.

Stimulating Economic Development in Texas

The availability of large-scale renewable energy increasingly is a factor in corporate relocation and expansion, especially for modern-economy industries that rely heavily on high volumes of reliable electric supply with stable long term-prices.

Data centers are a prime example. Highlights from a recent report on the role of renewables in the data center industry by IHS Markit are as follows:

  • Between 2 percent and 3 percent of developed countries’ electricity consumption is currently attributed to data centers. For most data centers, the largest operational cost is the electricity used for cooling.
  • The two most popular renewable energy methods are solar and wind power, due to their high-energy production and relative ease of implementation.
  • Utility-scale renewable energy sources are the most cost-competitive way for data centers to obtain renewable energy. Long-term power purchase contracts remove risk and the large upfront capital expenses required to produce onsite renewable energy and the geographical limitations of renewable energy production methods.

Texas is well-positioned to respond to the trends described above, as the conditions on both the supply and demand side are in place for the state to be a leader in non-residential renewable energy.

Improving Human Health and the Environment

Figure 10 shows that, if there had not been any renewables on the ERCOT grid, power plants would have withdrawn between 300 and 700 billion gallons more water per year. Water withdrawals refer to water that used by a power plant for cooling, but returned to the source. For reference, 700 billion gallons is the annual use of about 783,000 Texans

Figure 11 shows that under the same conditions power plants would have consumed between 8 and 22 billion gallons more water per year. Water consumption refers to water that is evaporated by a power plant’s cooling system and is not available for other uses. For reference, 22 billion gallons is enough to hydraulically fracture between 6,000 to 18,000 natural gas wells, depending on well type and formation. At average wholesale water rates, 100 billion gallons of water is worth about $309M.

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