Texas Ups Renewable Energy Requirements

Texas Governor Rick Perry has signed legislation requiring increased development of renewable energy in Texas. The legislation requires the installation of another 3,000 MW of renewable energy on top of current Texas law requirements.

Texas has taken a different approach in mandating renewable energy development compared to other states. Most states with renewable energy portfolio legislation require load-servers to include a given percentage of renewable energy in the energy they provide to retail consumers. Texas, however, mandates the construction of certain amounts of renewable energy. As Texas is relatively isolated from the rest of the nation's grid, this is in some respects inevitable because out-of-state renewable energy cannot compete in the Texas market. However, by focusing on construction rather than delivery of renewable energy, this legislative model may have, in the past, promoted construction of wind farms in west Texas before adequate transmission was available to bring this power to load centers in the eastern part of the State.

Earlier legislation, enacted when 880 MW of installed renewable energy capacity existed in Texas, required construction of another 2,000 MW by 2009. The new law calls for 3,000 additional MW by 2015, for a total of 5,880 MW, and also requires the Texas Public Utility Commission to establish a target of 10,000 MW of installed renewable energy capacity by 2025. Approximately 1400 MW of wind power generation has been installed in Texas to-date.