According to BloombergNEF’s just released 1H 2024 US Clean Energy Market Outlook, Texas promises to top the charts in terms of solar, wind and battery storage deployments in the period from 2024 to 2035. But it’s position as the number one U.S. state for renewable energy is not a given, as panelists made clear at last week’s RE+ Texas conference in Houston, Texas.
Earlier this week BloombergNEF released its 1H 2024 US Clean Energy Market Outlook, which forecasts almost 1 TW of new solar and wind capacity in the U.S. between this year and 2035. A staggering 221 GW of grid-scale battery energy storage systems (BESS) are also forecast for this period. Texas tops the list in terms of overall build with California taking the lead in terms of BESS deployments. These will come close to matching the solar PV deployments in the Golden State.
Texas has been a favorite among utility-scale solar PV developers for a long time, thanks to its business-friendly environment and its lack of substantial local permitting regimes.
In the RE+ Texas session entitled “Don’t Mess with Texas: Opportunities and Challenges in Local Policy”, leading utility-scale solar developers were well represented with Barb Jacobs of Lightsource bp and Susan Williams Sloan of Orsted. Rounding out the panel were Mundo de la Fuente, partner at the law firm K&L Gates, and Luke Metzger from the non-profit Environment Texas. The session was moderated by Michael Lewis of the law firm Jewell & Associates, PLLC.
While the pro-business environment and regulatory regime have attracted many renewable energy developers to Texas, the industry almost fell off a cliff in 2023, the last time the Texas legislature convened. (The Texas legislature meets only every other year for a period of 140 days. Accordingly, its next session will be in 2025.)
As the “Don’t Mess with Texas” session in Houston made clear, a number of proposals were launched in 2023 to undercut the further development of renewables in Texas. This despite the fact that Texas has historically been very friendly to oil and gas development and commercial property development. So the initiatives in the Texas legislature caught many in the solar industry off guard. There is a good chance that this will happen again in 2025.
The most problematic initiative was Senate Bill 624. Susan Sloan, Head of Government Affairs & Marketing Strategy at Orsted North America, described this proposal as follows:
“This would have the effect of putting all of the operating [renewable energy] projects on notice and to have to go through a process of getting a permit from the PUC that doesn’t even regulate renewable energy development right now. So we would be not in compliance right off the bat if the law had been passed. We would not be able to operate until we get a permit. The permitting process was not yet established and if you’re in a session where reliability is the number one issue that the legislature wants to talk about and the PUC, ERCOT are all wrestling with right now, this would be a colossal unreliability creator.”
In 2023 the Texas legislature, Public Utilities Commission (PUC) and the Texas grid operator ERCOT were still reeling from the aftermath of a devastating freeze that had blanketed Texas in February 2021. The historic freeze exposed the frailty of the ERCOT system and other energy infrastructure in the state.
Barb Jacobs of Lightsource bp, a joint venture between Lightsource Renewable Energy and the energy giant BP, called SB 624 “by far the worst siting bill I have ever seen in any state.” And at Lightsource bp Jacobs used to oversee 24 states, so she had a rather comprehensive overview of what was happening on the regulatory and permitting front across the U.S.
Jacobs cautioned the audience that the political situation in Texas has not improved since 2023. In fact, it has probably worsened. According to Jacobs, “There’s been such a dramatic shift in the political winds here for renewables. It is very alarming.”
Sloan urged the solar industry to be more proactive and communicative about what the industry is already doing: “There’s a lot of good that our companies are doing, but is not understood and not recognized. And we need to explain those things. I think that squashes a good chunk of the specific issues that the opposition has brought up.”
Measures that solar developers are already taking include measures to avoid soil erosion, to protect wildlife and the landscape, or to do specialized studies, for example if wetlands are involved. As Sloan pointed out as well, buyers of renewable energy increasingly want to know that “you have good standards of development, construction and operations.”
Clearly, there is also more the industry can do. Mundo de la Fuente called for a greater engagement with landowners. He cited a celebratory dinner involving a new utility-scale solar project in Texas, where the developer invited dozens of landowners owning thousands of acres of land. De la Fuente is an experienced renewable energy attorney, but this kind of engagement was a novelty for him. As he pointed out, these landowners are “getting substantially more from their land than they would, for example, from grazing.” For de la Fuente, these are the “true stakeholders” of a ground-mounted renewable energy project and they need to be brought into the conversation.
Luke Metzger of the environmental organization Environment Texas also called on the industry to take the Solar Uncommon Dialogue seriously and adopt the recommendations that will come out of SUD. SUD is a cooperation between SEIA and various environmental groups to develop best practices to, in the words of Metzger, “facilitate the rapid growth of renewables while minimizing the impact on the environment.” Metzger also pointed to The Nature Conservancy, one of the groups supporting SUD, and their “Site Renewables Right” map of the U.S. The SRR map identifies the most ecologically sensitive parts of the country, so these areas should not be targeted by renewable energy developers.
Metzger also noted a University of Texas study that compared the land used for oil and gas developments in Texas to the land used for solar. Back in 2014, so before the most recent oil and gas boom in Texas, oil and gas took up 514,000 acres in the state. ERCOT forecasts that solar PV will hit 27 GW of installed capacity in Texas this year, which will take up only 162,000 acres. And the environmental impact of the latter can hardly be compared to the impact these fossil fuel projects are having.
As the 2025 Texas legislature begins its work, it will be interesting to see what proposals emerge and whether 2025 will bring the same nasty surprises as the most recent legislative session in 2023. The “Don’t Mess with Texas” session certainly provided some useful recommendations on how to better position the industry ahead of this 2025 session.
