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Liam Denning

Exxon’s Power Play Points to Texas’ Future

The oil giant’s big bet on Permian renewables shows how the economics of the electricity market are changing.

Wind and sun are getting bigger use in Texas.

Wind and sun are getting bigger use in Texas.

Photographer: Eddie Seal/Bloomberg

As stories about the energy transition go, Big Oil going big on solar power in the heart of America’s biggest oil patch is as transitiony as it gets. Besides the symbolism of Exxon Mobil Corp. signing up for 250 megawatts of solar power (plus the same amount of wind power) in the Permian basin, though, it is also part of a big change gathering momentum in the country’s biggest electricity market: Texas.

Despite lots of sunshine and power demand, the state hasn’t embraced solar power in a Texas-sized way. Last year, it ranked sixth in the U.S. in terms of solar generation, just behind Utah. But that appears to be changing. As of the end of November, the state’s solar pipeline was at almost 37 gigawatts, up from less than 25 GW at the beginning of the year, according to the latest monthly report from the Electric Reliability Council of Texas (ERCOT).