Coal, Renewable Energy and Carbon Emissions in Texas

Forty-three percent of Americans want President Donald Trump to revive the coal industry and 64 percent think he can do it, according to the spring 2017 edition of the biannual University of Texas Energy Poll.

However, energy market experts believe coal isn’t coming back.

The UT Energy Poll surveys at least 2,000 Americans nationwide twice a year in order to gauge public opinion on issues relating to energy production and policy, such as national security, energy prices and climate change. Since Trump promised to bring back coal jobs while on the campaign trail and once in office, this spring’s poll asked more specific questions about coal. coal poll

“We’re seeing some attitudes shift, we can’t say for sure it’s because of the election, but I suspect that’s likely what’s going on,” UT Energy Poll director Sheril Kirshenbaum said. “What will be interesting to see is, after the current administration is in office a year or more, whether or not if they follow through on what was promised will influence attitudes going forward.”

According to David Spence, a UT business and law professor who researches energy regulations, the price of natural gas, one of coal’s major competitors, is falling due to improvements in fracking that produce more oil and gas formerly locked away in shale.

“Coal competes with natural gas, they can’t both be winners,” Kirshenbaum said. “Natural gas is indeed the direction this country is headed.”

Natural gas, while not perfectly clean, produces only a fraction of the nitrogen oxides and sulfur oxides that burning coal does, said Michael Webber, deputy director of the UT Energy Institute. Nitrogen oxides and sulfur oxides lead to smog and acid rain, he said.

co2 emissionsCoal is also considered the most carbon-intensive fossil fuel, Kirshenbaum said. Compared to natural gas, coal has twice the contribution to global warming and climate change; according to the U.S. Energy Information Administration, various varieties of coal produce between 214 and 229 pounds of carbon dioxide per million British thermal units of energy created, while natural gas only produces 117 pounds per Btu.

“I can’t imagine what president Trump can do to get the coal industry going again,” Kirshenbaum said. “We’re shifting toward renewables, we’re getting a lot more natural gas, there’s a lot of emphasis on prioritizing less carbon-intensive technologies.”

Energy production may be going in another direction entirely at the same time: renewable energy, such as wind and solar.

 

Austin Reducing its Carbon Footprint

Although Texas is known for its natural gas, it uses a significant amount of coal; according to the U.S. Energy Information Administration, 37 percent of Texas’ power generation mix comes from coal as of 2014, although that is down from 42 percent in 2004. texas generation mix

“Gas is the lion’s share of our electric generation mix, it’s a little more than twice as big as the share that coal comprises,” Spence said. “I don’t think anybody’s planning to build any more coal-fired power plants, so coal will probably shrink over time slowly as the percentage of the Texas generation mix.”

In order to reduce the city’s contribution to climate change, Austin is taking steps to decrease the city’s carbon emissions. As a part of the city’s goal to have a zero carbon footprint by 2050, Austin Energy, Austin’s municipal utility, adopted the Resource, Generation and Climate Protection Plan in 2015.

One of the goals of the plan is to end the use of coal by Austin Energy, including retiring the Fayette Power Project, Austin Energy’s coal-powered plant that makes up 25 percent of its electricity generation mix, by 2022.

Austin Energy currently produces about 35 percent of its energy from wind and solar, Austin Energy public information director Robert Cullick said, compared to 11 percent for the rest of the state.

Utilities such as Austin Energy sell energy to and receive power from Texas’ power grid, called the Electric Reliability Council of Texas, or ERCOT. In 2007, the city of Austin passed a resolution to reduce the city’s impact on global warming, including requiring Austin Energy to gather 30 percent of all its energy to contribute to this grid from renewables by 2020; more recently, the city set another, more ambitious goal of 55 percent renewable energy by 2025.

Cullick said, although the prices of solar panels have fallen, renewable power often costs more than traditional power. For example, according to the Austin Energy generation plan, the Fayette Power Project provides energy at costs below market prices and reduces customer bills.

“People have been talking about the reductions in price of solar, but renewable power is certainly not the cheapest power you can sell to customers,” he said. “[Traditional power] is not only necessary for stability of the system, but it also helps keep prices low.”

City of Austin climate program manager Zach Baumer said that the question of affordability between traditional and renewable energy is complicated. Traditional energy puts its waste into the atmosphere instead of paying to dispose of it, he said, and subsidies and tax credits help keep fossil fuel prices low.

“Some people want to reduce it down to a simple answer, but it’s more complicated than that,” he said.

However, although the mix of renewable prices raises the cost of power in Austin, the commitment to renewable energy contributes to the goals of the Austin community, Cullick said.

“UT students come from all over the state, all over the world, and when they reach Austin, they may see that they have one choice for electricity, Austin Energy,” he said. “Because they are part of the Austin community, … they’re part of a system that is three times cleaner than the rest of the Texas system. What you get here that you don’t get in the other communities is a better environmental impact.”

 

Georgetown Goes Green

Although traditional energy keeps its prices low through subsidies and tax credits, renewables are also partly subsidized, Spence said, helping them become cheaper and more appealing to investors.

One energy company has found that renewables are the best financial choice. Georgetown, a city of around 50,000 people about 30 miles north of Austin, and its municipally-owned utility service Georgetown Utility Systems, decided to power the town with 100 percent renewable energy in 2013.

“We started this off as a business decision, and we put a lot of math behind everything that we did,” said Chris Foster, Georgetown’s resource integration manager. “It was never an original goal for the entire utility to go 100 percent renewable.”

In 2010, Georgetown’s city council approved a plan to generate and use energy from 30 percent renewable sources, 30 percent nuclear energy and 30 percent natural gas.

Georgetown Utility Systems previously had a contract through 2016 for mostly natural gas and coal with the Lower Colorado River Authority, which manages resources such as electricity in central Texas. However, they exited the contract with LCRA in 2012 due to a contract dispute, Foster said.

Georgetown needed a new contract, so they asked the energy market for the best proposals.

The best deal they found was for a wind farm west of Amarillo. They signed the contract in 2013, and the wind farm, called Spinning Spur 3, went online in 2015. In its first year of operation, the wind farm produced more energy than the city of Georgetown needed, so the city used 100 percent renewable energy for 2015. Georgetown public communications manager Keith Hutchinson attributes this to a cooler, wetter summer; however, when the temperatures rise in Texas and more energy is needed for air conditioning during the hottest parts of the day, Georgetown’s wind plan runs into a problem.

“[The wind in the Panhandle] is pretty constant wind throughout most of the year, but it’s most powerful overnight when you get the change in temperatures from the ground to the air,” Foster said. “That left us with a hole in our portfolio needs right in the middle of the day during the summer.”

To fill this hole, Georgetown put out another request for proposals, bidding for only peak energy demand hours during the day. The two best deals they found was with a natural gas plant and a solar farm, both at the same price.

The tiebreaker between the two deals was that the price of renewables is ultimately steadier and more predictable than natural gas; while natural gas prices could only be guaranteed for five to seven years, the solar contract guaranteed a price for 20 to 25 years, according to Foster, who negotiated the new contracts. After gathering input from businesses and residents in Georgetown, the city council found that Georgetown residents favored a fixed, predictable cost for renewables rather than “randomly cheap power,” he said.

“When people are paying their energy bill and we can say we have a fixed rate for the energy cost, that’s a benefit to all of our ratepayers,” Hutchinson said. “Right now, the cost of fossil-fuel-based energy is not high, but we have certainly seen spikes in the past, and certainly the price for energy produced by natural gas has been much more volatile. Having a fixed price over the long term is a core benefit for having wind and solar power.” nat gas prices

Once the solar plant comes online next year, the city’s utility will officially produce 100 percent renewable energy and will even produce surplus energy to sell back to ERCOT, Hutchinson said.

In addition to cheap, reliable energy prices, this decision has also benefited the city by attracting businesses that want to increase their renewable energy consumption, Hutchinson said. Georgetown was previously known as a veteran and retirement community, Foster said, and most businesses that landed in Georgetown did so because of its proximity to Austin. Now, some businesses specifically choose Georgetown for its promise of renewable energy.

“It has completely changed the conversation that our economic development team has when they’re trying to attract businesses,” Foster said. “Very often, … the first question that gets asked is whether or not we can deliver that 100 percent renewable power to them tomorrow. Being able to answer that with a definitive ‘yes’ is a leverage point we had never had before.”

Other than a previous effort by an environmental student group to run Southwestern University on wind energy, there wasn’t much of a push in the community for using renewables, Foster said.

“After we made that change, we had a lot more citizens come out and tell us and say that they’re glad that we did,” he said. “It’s like people wanted to go there but they didn’t say it beforehand. We’ve had an overwhelming amount of support from our own citizenry.”

 

Sweetwater: Texas’ Windy City

Texas produces nearly three times as much wind energy as the second highest wind-producing state, Iowa, and according to Webber, if Texas were a country, it would be the sixth largest producer of wind power in the world. He added that wind energy in Texas has grown in recent years due to a mixture of plentiful land resources, wind-friendly legislation, cheap land, easy construction permitting and a growing demand for electricity.

However, wind power is diffuse, or requires large expanses of land to gather energy, and wind-heavy regions are typically far away from the majority of Texas’ population, Webber said.

“That means you’re stringing hundreds of miles of wires and poles between power and the market and that can be unsightly, expensive and hard to do,” he said. “Wind and solar are diffuse and far-flung, so it takes a lot of land somewhere else.”

Out in west Texas, finding vast, windy land isn’t a problem. One such place is Sweetwater, a town sitting 181 miles west of Fort Worth in Nolan County, population 15,000. Sweetwater, a rural ranching, farming and manufacturing town born at the intersection of the Texas Pacific railroad and the Santa Fe railroad in the 1880s, was selected by early land developers for building wind farms in west Texas in 1999, according to Roderick Wetsel, UT law professor and Sweetwater lawyer specializing in representing landowners in wind lease contracts.

Although Sweetwater doesn’t have the best wind in Texas, it was chosen because it has an unused electricity transmission line stretching from Nolan county to the Dallas-Fort Worth area, Wetsel said.

When the wind developers arrived, many landowners were very receptive to the idea of farming wind, Wetsel said.

“The farming and ranching was having a really hard time, it hadn’t rained out here in a long time, prices were bad, people were almost losing their ranches and farms, and I guess you could say they were about ready to try anything,” he said. “And here come the wind developers, and they came in droves, … they built what at that time were the three largest wind farms in the world right here. It just sort of catapulted this area from nowhere to wind capital of the world.”

Some have been resistant to the wind turbines, mainly because of aesthetic reasons, Wetsel said; however, the attitudes towards the turbines has been mostly positive.

“There have been a few people who have grumbled and haven’t liked the way they look,” he said. “Generally, those are people that didn’t get wind turbines. It’d be hard to find anyone around here today who doesn’t like the wind turbines.”

The influx of wind turbines has revitalized the area, bringing wind-related businesses from across the country and the world and creating new jobs, Wetsel said. Wind technician is one of the fastest-growing jobs; according to the American Wind Energy Association, the U.S. had 88,000 wind jobs in 2016, a 20% increase from the previous year.

The wind industry has also increased the tax base of Nolan county from $500 million in 1999, before the wind developers came to town, to $1.89 billion in 2016, according to Ken Becker, executive director of Sweetwater Enterprise for Economic Development.

“You get more tax money off that, which you can do more projects, make some of your buildings nicer, make your roads better,” he said.

The wind turbines have also helped some ranchers and farmers in the Sweetwater area keep their land when they otherwise might have had to sell, Becker said.

Louis Brooks, a cattle rancher owning one of the oldest and largest ranches in Nolan County with about 79 wind turbines on his property, said he decided to get the wind turbines for the extra income; according to Wetsel, each wind turbine provides an annual income, on average, between $10,000 and $12,000 each.

“It’s hard to derive enough income from semi-arid West Texas land to justify owning it,” Brooks said. “With the wind generators, it helps us a great deal.”

The wind turbines also work well with other uses of the land, such as agriculture, hunting and previous leases that the landowners have with oil and gas companies, Becker said.

“People like the fact that they can have that on their property and can make more money off their land,” he said.

Brooks said creating wind power is good for Sweetwater because the wind rarely dips below 10 to 15 miles per hour.

“We’re never going to run out of wind,” he said. “Someday, probably a long time from now, we’ll eventually run out of oil. There’s a never-ending supply of wind.”

 

What’s in Store for Coal?

Texas isn’t as dependent on coal as other states, such as West Virginia, which generated 96% of its electricity from coal in 2014. However, Texas is part of a larger trend; data from the U.S. Energy Information Administration shows that, as a country, the tides of the market seem to be turning against coal in favor of renewables and Texas’ main electricity producer, natural gas. national generation mix

However, as shown by the UT Energy Poll, the relative public support for coal is “surprising,” Spence said.

“Surprising can be a euphemism for ‘difficult to square with reality,’” he said. “Of course, people may not understand the market forces that are pushing coal down, and they may be expressing optimism about the ability to resurrect the coal industry that they wouldn’t express if they understood the way the markets are working right now.”

Kirshenbaum said she thinks it’s likely that the 2016 presidential campaign affected public opinion on not only coal, but also the topic of climate change. For example, 75 percent of those surveyed said climate change is occurring, but only 64 percent are concerned about its effects. In addition, since the previous poll in fall 2016, the percentage of respondents who are unconcerned about carbon emissions jumped from 19 percent to 30 percent.

“You start to suspect that some of what we heard during the campaign probably did move people’s opinion on topics like coal, but also on climate change,” she said.

However, Spence said he doesn’t think the new administration’s pro-coal attitude will have much of an impact on greenhouse gas emissions or global climate change, despite promises to repeal or weaken Environmental Protection Agency regulations on carbon emissions from coal-fired plants.

“At the margins, those plants will have fewer regulatory compliance costs, and so they may be able to stay open longer than they otherwise would have, but I think those effects will be marginal, they won’t be profound,” Spence said. “There will still be parts of the country where coal-fired power plants will stay open longer than they otherwise would have because of those administration policies, but I don’t think in the long run they will amount to anything significant because the market forces favoring other technologies will overwhelm the lower regulatory costs.”

Webber said the administration is unlikely to help the coal industry much; in addition to the fact that coal is not as cheap or clean as natural gas and renewables, decisions about building power plants are made at the state level, and environmentalists are likely to apply pressure to their local governments to move away from coal.

“In Texas, they’re going to build stuff based on what’s cheapest,” Webber said. “There’s still been announcements of coal shutdowns despite some of his pledges, and a lot of that’s because of this local pressure and because there are cheaper options like natural gas and wind and solar. In the end, it will be tough for President Trump to save the coal industry. In many ways, the market has already spoken.”

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