When a conservative Texas town decided to switch to 100% renewable electricity, it wasn’t a decision made for the environment. When the city looked at all of its options for energy, for the first time, green power offered the best deal.
“There was some skepticism when we were looking at going 100% renewable,” says Jim Briggs, interim city manager of Georgetown, Texas, which will run completely on wind and solar power by 2017. “The general perception has told us that renewables are expensive–more expensive than fossil fuel generation. And especially in Texas, where we produce a lot of natural gas, it’s not going to be received real well.”
But as the city carefully ran the numbers, renewable energy made the most financial sense. Unlike natural gas, solar and wind offered the possibility of a long-term contract. “We were concerned with price swings for natural gas,” says Briggs. “Right now the price is low, but we’ve been in the market when it was just shy of $10. We know it can be very volatile. And once renewables are established and generating, you don’t have that price swing.”
Though coal power is still fairly common in Texas, the city saw that federal emission standards were tightening, and decided it wasn’t a good long-term choice. New fossil fuel plants also require water permits, a tricky proposition in a state plagued by drought. The city also looked into nuclear power, but because new nuclear plants aren’t being permitted now, that wasn’t an option. So they turned–albeit reluctantly–to renewables.
The city spent three years researching the possibility of solar power. “Probably two or three times over the three years we walked away from the table because the price was not ready,” says Briggs. “I’m not going to contract just to say it was renewable. There’s a price component that has to be calculated and plugged into the equation. When the price got to a point we could work with for a 20- to 25-year term, that’s when we decided to go.”
Briggs argues that the price point is right in Texas because the energy market in the state is deregulated, spurring intense competition between different power suppliers. “In a conventional power market which is wholly monopolistic and territorial, this would not be able to happen,” he says. “I believe for this to be able to happen, at this competitive price, and this competitiveness of product, you need access to a deregulated wholesale market.”
Contrast Georgetown’s situation with that of Burlington, Vermont, a town of about the same size that decided to go green for social reasons rather than the bottom line. Burlington made a conscious decision to pay a little more for renewable power, something that Georgetown wouldn’t have ever considered.
In Georgetown, at certain points when the sun is down and the wind isn’t blowing, the city may still buy power from conventional sources. But they will produce so much excess renewable energy at other times that the net total will be 100% renewable.
“We’re extremely rich in generation,” Briggs says. “Because we’re so rich in renewable, we get renewable energy credits, so even if we have to use a brown electron during that period of time, we can use a renewable energy credit to make it green.”
Despite the choices the city has made, Briggs still believes that fossil fuels aren’t going anywhere soon. “Renewables will play a role, but they’re not going to be 100% statewide,” he says. “I don’t think they’re going to be 100% for a long time, not in my lifetime. You’re still going to have fossil fuel generation.”
Of course, things may change more quickly than he expects–solar is quickly becoming as cheap or cheaper than conventional power in most of the world.