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Fossil Fuels Face a $1.4 Billion Solar Problem in Texas

  • Gigawatt of solar may cut $2.76 a megawatt-hour from prices
  • Fossil fuel-burning generators’ summer revenues at risk
Texas Oil Fields As U.S. Flexes Refining Muscles
Photographer: Luke Sharrett/Bloomberg
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A boom in solar power is threatening to wipe out $1.4 billion a year of summertime revenue for fossil-fuel generators in Texas.

Almost 15 gigawatts of solar power may crop up in the Lone Star state in the coming years, and every gigawatt stands to shave about $2.76 a megawatt-hour from wholesale electricity prices there when demand peaks in the summer, an analysis by Bloomberg New Energy Finance show. This could end up dealing a major blow to fossil fuel-burning generators that rely on those peak prices to weather the lulls in demand through the rest of the year.