oil pump in front of wind turbines

Inside Texas’s power sector paradox

 June 25, 2024 

The United States’ clean energy leader is also its number-one source of electricity emissions. Welcome to the Lone Star State, aka the China of the U.S. in terms of fossil fuel historical dominance — as well as record-setting wind and solar.

In March, Texas published its first-ever greenhouse gas (GHG) inventory, joining more than 20 other U.S. states in cataloging annual statewide emissions. This inventory, which covers the state’s 2021 GHG emissions, revealed the Lone Star State as the United States’ top emitter overall by state. Per both the U.S. EPA and Climate TRACE data from 2022, Texas’s overall, economy-wide GHG emissions were more than double that of America’s second-place emitter, California. 

According to its inaugural self-assessment, in 2021 Texas released more than 873 million tonnes (Mt) of GHG emissions. To put that in context, if Texas were its own country, it would rank 11th on a global scale — just ahead of Mexico and behind Saudi Arabia, according to Climate TRACE 2022 data.

There’s more to this story than meets the eye. Pop culture portrayals of the Lone Star State have long made ample use of oil barons and rigs dipping into dusty prairie, and for good reason… at least historically. While that fossil-fuel-happy reputation still applies — Texas remains America’s top producer of crude oil and natural gas — it’s also become America’s clean energy leader.

So let’s take a closer look at what WattTime knows best (electricity) and unpack Texas’s power sector energy and emissions data to better understand where it has been — and where it might be going.

Everything’s bigger in Texas — including appetite for renewables

The self-proclaimed “Energy Capital of the World,” Houston is fast becoming a clean hydrogen hub and currently ranks #1 on the EPA’s Green Power Partnership list — a program ranking organizations by their voluntary clean energy procurement — in the local government category. In fact, the top six slots nationwide include five Texan entities, including Dallas, DFW airport, Austin, and Harris County. Austin, Dallas, Houston, and San Antonio are all officially working toward net-zero-by-2050 goals

Since the early 2000s, Texas has famously led America’s wind energy pack, comfortably sitting in the top spot for installed wind capacity, according to U.S. DOE WINDExchange data. With more than 41 GW, the state is responsible for more than a quarter of all U.S. wind energy capacity, tripling silver-medal Iowa’s contribution of 13 GW. 

Solar PV is growing, too. Late last year, Texas overtook longtime solar leader California to capture the top spot among U.S. states for installed utility-scale solar capacity. And in early 2024 solar generation passed coal-fired electricity generation for the first time in Texas history. 
Although natural gas still leads the generation stack for ERCOT — the independent system operator (ISO) that balances supply and demand for 90% of Texas’s electricity — as of May 2024, wind and solar together are closing in on gas’s lead, with 38.4% of the state’s electric generating capacity, compared with natural gas at 44.3%.

Texas power sector emissions 2021

Texas’s fossil-burning power plants in focus

So with clean energy scaling rapidly, where exactly are all Texas’s electricity generation emissions coming from?

For starters, Texas has some 180 combustion power plants, per Climate TRACE and WattTime data. Most of those are gas–fired power plants. But data from the Texas Comptroller shows that 15 coal-fired plants are currently operational; a third of them are slated for retirement by 2030.
Among those 180 fossil-burning plants identified in Climate TRACE data, the biggest power sector culprit is the dual gas/coal-fired WA Parish Generating Station. With 3.9 GW capacity, the #5 emitter for power plants across the U.S. is notorious among environmental advocates and Texas media outlets, which have been raising alarms about the pollution and harm caused by the WA Parish plant.

power plant satellite image

However, while coal-fired power plants might be Texas’s dirtiest on a per-MWh basis, the sheer size (and policy support) of the state’s gas-fired fleet matters, too. In recent years, the Lone Star State has been digging in its spurs — or, at least, its heels — to prop up the gas fleet.

For instance, in early 2021 Winter Storm Uri infamously caused widespread blackouts across Texas and $195 billion in damages. The Texas PUC set an astronomical system-wide price cap of $9,000 ​​per MWh in a bid to bring more generation online (market-clearing prices were closer to $1,200 per MWh). In the wake of that catastrophe, Texas legislators introduced bills to bolster gas-fired generating resources and keep more fossil-burning power plants online, even though multiple Uri post-mortems found that gas infrastructure was the biggest failure during the winter storm; nearly twice as much gas-fired capacity went offline as wind capacity.

More recently, during April 2024’s total solar eclipse, gas proved Texas’s electricity generation fuel of choice, when ERCOT ramped up gas to make up for solar’s temporary dip.

Austin also illustrated this “can’t quit fossil” dynamic when it approved a plan in 2020 to shut down its greatest source of carbon emissions, the coal-fired Fayette Power Project plant. The decision was a boon to Austinites’ goal of producing wholly emissions-free electricity by 2035; however, the closure never came to pass and the Fayette Plant remains operational today. 

An hour south in San Antonio, CPS Energy — America’s largest municipally-owned electric and gas utility — has already acknowledged it won’t meet the Climate Action and Adaptation Plan the city adopted in late 2019, now that its customers owe $200 million-plus in late bills for natural gas purchased at elevated rates during winter 2021. And in late 2023, ERCOT asked CPS Energy to bring a coal plant it had recently shuttered back into operation in an effort to secure more reserve power ahead of winter.

America’s China?

The energy landscape within America’s second-largest GDP after California in many ways parallels that of the world’s second-largest economy — one similarly marked by massive ongoing power sector emissions, clean energy leadership, heavy industrial growth, surging populations, and uncertainty about how the future will unfold.

Like China, Texas’s key contributors to new emissions stem from the power and industrial sectors. Despite China’s role as the world’s leading deployer of renewable energy in electricity generation — it’s the only entity in the world that tops Texas in installed wind capacity — the production of fossil fuels continues to grow strongly in China, which is the world’s #1 emitter of GHGs. Still, coal’s share within China’s electricity generation mix has steadily declined — as it has in Texas — and the long-term plan is to phase it out. But over the near term, coal will retain its pivotal role within China’s generation mix, which could translate to bumps in its coal-fired emissions. 

Texas is a space to watch for that same phenomenon, especially this summer, as the window spanning May through August historically marks Texas’s high point for power generation and demand. And given the heat wave that slammed Texas over Memorial Day weekend, this summer looks to be a heat demand doozy, requiring fast-response power resources. 

Don’t mess with Texas’s clean energy leadership

On a more hopeful note, in addition to its greenhouse gas inventory, the Texas Commission on Environmental Quality used EPA grant funds to create an emissions reduction plan for Texas. According to its estimates, implementation of suggested measures — divvied into buckets tailored to each of the state’s highest-emitting sectors: industry, transportation, and electric power — could reduce GHG emissions in the Lone Star State by 174 Mt from 2025 through 2030 and 592 Mt from 2025 through 2050.

The plan spells out precise priority measures — voluntary, yet incentivized ones, created with extensive input from a variety of Texan stakeholders. And in 2027, the TCEQ will publish a status report detailing implementation progress, priority analyses, next steps, and future budget and staffing needs to continue deployment of the measures. So it seems Texas is taking its emissions reduction plan seriously.

A shining example of a power grid in the midst of a massive transition — wherein wind, solar, and battery energy storage are poised to together become the dominant wedge of the power generation pie, supplanting natural gas’s piece — Texas provides a valuable example for how grids across the country can tap wind, scale up solar, utilize existing energy infrastructure to generate clean hydrogen, and ultimately, decarbonize the power sector. Especially as coal-fired generation retires in the years ahead, Texas’s model, from a clean energy leadership perspective, is one not to be messed with.