There have been two linked and extremely consequential March developments within the Electrical Reliability Council of Texas (ERCOT), the grid operator that serves about 90% of the electrical energy demand in Texas.
First, photo voltaic technology topped coal’s output for the primary time in any month, sending 3.26 million MWh onto the grid vs. the two.96 million MWh equipped by coal. Second, coal’s market share fell beneath 10% for the primary time ever, to only over 9%. The decline continued a long-term slide that started a decade in the past however that has picked up velocity since 2016-17, when photo voltaic first confirmed up in ERCOT’s technology knowledge.
For all of 2017, photo voltaic generated simply 0.6% of ERCOT’s demand, or 2.26 million MWh. In March 2024 alone, photo voltaic technology reached 3.26 million MWh, based on the Power Info Administration’s (EIA) hourly grid monitor. The rise pushed photo voltaic’s share of ERCOT technology to greater than 10% for the month, additionally a primary.
Whereas photo voltaic has been climbing steadily (see the graphic beneath), there was a notable pickup these days. Era in March 2024 was 1.17 million MWh greater than a yr in the past, a 56% improve, and the expansion will proceed. ERCOT knowledge exhibits that the system presently has 22,710 MW of operational photo voltaic capability however is anticipated to increase by nearly one-third by the tip of the yr as one other 7,168 MW of capability is added. The determine counts solely tasks which have a signed interconnection settlement and have put aside the financing required to get onto the ERCOT grid. Extra progress is on faucet for 2025, the place tasks with 20,932 MW of capability are in an analogous stage of growth. There are millions of extra megawatts of photo voltaic capability in earlier levels of growth.
In distinction, coal’s share of the ERCOT market has been falling, nearly in reverse lockstep to photo voltaic’s progress. From 2003 by 2014, coal’s annual share of ERCOT demand ranged from 36% to 40% (apart from 2012, when low costs elevated gasoline technology and coal dropped to a 33.8% market share). Since then, the decline has been fast. The final yr coal topped the 30% mark was 2017; by 2018, coal had dropped beneath 25%; was beneath 20% in 2020; and was lower than 15% final yr, supplying simply 13.9% of the system’s whole demand.
Importantly, the annual common is just not being skewed by a few months of extraordinarily low technology. Reasonably, coal’s market share in ERCOT is declining throughout the board, even through the sweltering summer season months. No month topped 20% in 2022, and solely November marked greater than 15% in 2023. The pattern is just not more likely to change in 2024. Knowledge for the primary three months put coal’s market share at 16.1% in January, 10.3% in February and March’s first-ever sub-10% stage.
Coal’s decline in ERCOT has vital implications for the U.S. total, since Texas has lengthy been the most important consumer of coal for energy technology. In 2023, the state burned 50.7 million tons of coal for electrical energy — twice as a lot as second-place Missouri’s 24.1 million tons — and 13% of the U.S. whole. Knowledge from the EIA grid monitor (see graphic beneath) exhibits that coal’s share of nationwide electrical technology was lower than 15% on daily basis in March — the primary time that has occurred. Coal’s nationwide market share additionally hit a day by day file low on March 29, dropping to only 11.25%.
Coal’s poor March efficiency is notable as a result of in recent times it has been April and Could — with reasonable temperatures, longer days and regular winds — when its nationwide market share has been at its lowest, and it’s solely attainable that it might fall into the one digits on some days this spring.
These shifts in energy manufacturing — photo voltaic’s rising position, and coal’s declined within the nation’s most power-hungry state — present simply how substantial the adjustments have turn into within the vitality transition.
Information merchandise from the Institute for Power Economics and Monetary Evaluation (IEEFA)
