A recent analysis reveals that amid the abnormally high-priced natural gas market in 2022, wholesale electricity rate savings from wind and solar surged nearly 300% from previous years to exceed $11 billion, totalling $31.5 billion in energy savings since 2010.
A detailed examination of the Texas wholesale electricity market showed wind and solar power generation saved the state approximately $11 billion in 2022. This figure marks a nearly 300% increase from previous years. From 2010 to the end of 2022, wind and solar generation produced $31.5 billion in wholesale electricity savings, benefiting all Texas households.
This value is only expected to grow as wind and solar capacity fill the state’s power grid queue.
The report, led by Dr. Joshua Rhodes and produced by Ideasmiths, projects that expanding wind and solar capacity could save Texans between $6.1 billion and $15.2 billion per yeary, even as the state’s politicians fight tooth and nail against wind and solar project development.
The base calculation for these conclusions hinges on the idea that wind and solar energy, requiring no additional operating costs, induce high-priced power plants to shut down. In 2012, Dr. Rhodes discovered that wind and solar energy (predominantly wind at that time) reduced electricity pricing by just over a tenth of a cent per kWh. By 2022, this reduction had ballooned by 1,700% to over $0.02/kWh.
As a result, electricity pricing in 2022 was 26% lower than anticipated, with a base price of $0.062/kWh versus a projected $0.084/kWh.
From 2018 to 2022, these savings led to an average annual reduction of over $200 in electricity costs for the average Texas household. As wind and solar installation increases, this figure is expected to rise.
The analysis estimates that renewables will save between $21 billion and $43 billion in total from 2023 to 2025, provided that natural gas prices remain between $3.42/MMBTU and $7.34/MMBTU as forecast by the Energy Information Administration. At present, Henry Hub natural gas prices have fallen to near $2/MMBTU.
The report also calculated discrete savings in other areas, including sulfur oxide (SO2), nitrous oxide (NOx), carbon dioxide (CO2), and water (H2O).
Rhodes states that without renewables, fossil fuel burning power plants would have consumed an additional 252 billion gallons of water in a desert-like region often faced with water stress and frequent droughts. At $3 to $7 per thousand gallons of water, this implies savings of $800 million to $1.8 billion.
Adding the societal costs of SO2, NOx, and CO2, (which have a wide range of assigned values), Texans have saved an additional $10 to $77 billion in health and climate costs.
Including the $31 billion-plus in energy savings, it seems possible that Texans may have reaped financial benefits in excess of $100 billion from wind and solar installations since 2010.
