Texas Advanced Energy Market Worth US$16 Billion In 2014

Renewables and energy efficiency are driving Texas’ advanced energy market and energy storage is now within reach.
Published: Tue 24 Mar 2015

Although it is ultimately all about saving – consumers saving money, saving resources and saving the planet – the advanced energy industry is big business. Just how big is illustrated in a new study, which estimates advanced energy industry revenue in Texas at US$16 billion in 2014 – accounting for 8% of the total US advanced energy market and making it a powerful economic driver for the state.

Building efficiency tops Texas advanced energy market

The report, prepared for the Texas Advanced Energy Business Alliance (TAEBA) by Navigant Research, groups the industry into seven major market segments. Of these in Texas the largest is building efficiency, with US$5.4 billion in revenue in 2014. Products and services such as building efficiency improvements, efficient lighting, high efficiency HVAC equipment and demand response are the significant contributors.

The second largest segment, at US$3.6 billion in 2014, is made up of advanced electricity generation technologies. Of these wind, of which Texas has more than 14GW – twice the capacity of California – and a further 10GW in the pipeline, accounts for almost two-thirds. Others include solar and natural gas.

Fuel production and transportation important market contributors

Fuel production, which includes compressed and liquefied natural gas for vehicles, is the third largest segment with US$2.7 billion in revenue. The other segments are transportation, thanks in part to natural gas vehicles, hybrid and plug-in electric vehicles and the fueling infrastructure to support them (US$2.3 billion); electricity delivery and management, driven by transmission projects required for integrating larger amounts of advanced energy into the transmission system (US$1.2 billion); the industry, which includes combined heat and power (CHP) systems in wide use in oil refineries and the petrochemical industry (US$659.7 million); and fuel delivery (US$25.8 million).

“Advanced energy is alive and well in Texas,” said Susan Reilly, president of Renewable Energy Systems Americas, Inc. (RES Americas) and current chair of the American Wind Energy Association. “Texas is the nation's leader in wind energy, today and going forward - just look at what's in the pipeline.”

Advanced energy drivers in Texas

The report gives much of the credit for advanced energy growth in Texas to the state's pro-business, pro-growth spirit combined with deliberate policy structures, including renewable energy and energy efficiency standards, as well as the nation's most open and competitive market for energy resources, managed by the Electric Reliability Council of Texas (ERCOT).

In particular several important trends are currently driving the Texas advanced energy market:

• Wind, natural gas and solar balance the electricity portfolio: In addition to the high level of wind noted above, solar is on the launch pad, with 10GW of new capacity expected by 2029. In addition, with nearly 70GW of capacity currently, Texas natural gas power generation is projected to fulfill over 4.5GW of growth over the next two to three years.

• Energy efficiency provides reliability and savings: Energy efficiency and demand response are already big in Texas, saving money for customers and helping prevent blackouts. But with efficiency measures one-third the cost of power generation, there is vast untapped potential for savings and peak load reduction.

• Energy storage is the new frontier: With potential to end a range of electricity system problems and inefficiencies – fluctuating demand, idle capacity, variable resources, minute-to-minute frequency control – and steep cost reductions expected, energy storage is now within reach.

Major energy companies doing business in Texas include Opower, First Solar, RES Americas and CLEAResult.

The Texas Advanced Energy Business Alliance, a new group on the scene, includes local and national advanced energy companies with the mission is to raise awareness among

policymakers and the general public about the opportunity offered by all forms of advanced energy for cost savings, electric system reliability and resiliency, and economic growth in the state of Texas.