Texas got more electricity from solar than coal last month

The Texas clean energy juggernaut hit a new milestone as the state’s solar production outpaced coal-fired generation over an entire month for the first time.

For years, coal and fossil gas ruled the competitive ERCOT market, which supplies power to almost all of Texas. A decade ago, in 2014, gas produced about 41% of Texas generation, followed by coal at 36%, with nuclear and wind roughly splitting the remainder, per ERCOT data.

Gas still delivers the lion’s share of electricity, but wind and solar have surged over the last ten years, and coal has plummeted. Last year, it only managed to supply 14% of ERCOT generation, according to data from the grid operator. Now the numbers are in from March, and coal’s share slipped below 10%, while solar surged above 10%, as noted last week by the Institute for Energy Economics and Financial Analysis.

It’s a striking inflection point for a state that doesn’t particularly care about getting rid of fossil fuels. Key to the rise of clean energy, the ERCOT grid offers power plant developers fewer barriers to entry than pretty much anywhere else in the U.S. If investors want to put their own money into a power plant, they can do so. As such, the competitive benefits of low cost clean energy technologies have shined especially brightly in Texas, relatively unencumbered by legacy gatekeepers. The wide open spaces and ample wind and sunshine help, too.

Last year, Texas beat out California for the most utility-scale solar capacity installed (California still leads in total solar, thanks to its abundant rooftop installations). Texas has dominated the wind category for years, and its wind surpassed falling coal production in 2020. This year will mark the first time Texas installs more grid battery capacity than California, after the latter state spent a decade carefully developing an energy storage market through policy, regulation and subsidies.

Taken together, Texas got 47% of its electricity from zero-carbon solar, wind and nuclear in the first three months of 2024. Those resources delivered 40% of Texas generation for all of 2023.

Wind and solar don’t need to pay for fuel, so they can deliver low-cost power to ERCOT whenever the weather is favorable. That pushes down the prices that coal owners can earn during those high-renewables hours, reducing the amount of time when it makes economic sense to run their plants. Solar can only operate in the sunlight, yet it still managed to produce more megawatt-hours in March than Texas coal plants, which technically could run at any time of day.

The main advantage coal retains is its dispatchability. ERCOT offers great bounties to power plants that can respond whenever prices spike, which happened repeatedly last summer as heat waves pushed demand to record breaking heights again and again. The profits from heady summer months could well keep some coal plants running.

But they can’t turn back the tide of new solar and cheap gas power that’s pushing the more expensive competitors out of the day-to-day market. To the extent that Texas legislators have interfered in their vaunted free market, it’s been to help the politically powerful gas generators (efforts to disadvantage renewables failed in the legislature last year), which further sharpens competition against the surviving coal plants.

Texas consumes more coal than any other state, according to the Energy Information Administration. As the market for the most carbon-emitting fuel crumbles in the Lone Star state, the loss will put pressure on coal suppliers in the state and across the U.S.

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