This Week in Texas Energy: Exxon to Disclose Risks from Climate Change
Plus: power reserves dip from coal plants shuttering and Austin commands the cheapest solar.
Exxon Will Now Offer Climate Change Impact Assessments to Shareholders
In a reversal, ExxonMobil will now offer details on “energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future” to investors, according to Fortune. This type of impact assessment, which is supported by other oil and gas companies, including Royal Dutch Shell, BP, and Total, has not been a part of oil giant’s disclosure practices, and the board has historically opposed providing shareholders with global warming outlook statements. The company has already acknowledged—tacitly and not—that the risks of climate change are real and require action. Exxon wrote off 15 percent of its reserve base in 2017 because it was too costly to develop (and further would produce a large carbon footprint). The company uses a carbon cost to examine potential impacts, said CEO Darren Wilson.
A shareholder rebellion, which occurred last May during the Exxon’s annual meeting, may be source of this climate change glasnost. A bloc of shareholders—including financial firms BlackRock and Vanguard, the largest shareholders—voted against the board in a key motion. The vote required the corporation to report on the impact of global measures such as the Paris Agreement, which aim to keep climate change to 2 degrees Celsius.
ERCOT: Coal Plant Closures Reduce the State’s Power Reserves
The recent shuttering of coal plants Big Brown, Monticello, Sandow as well as a natural gas plant will bring the state’s power reserve below the recommended level this summer, according to ERCOT. Technically, the state is projected to have a reserve margin of 9.3 percent (which is a measure used to calculate the difference between generating capacity and consumer demand)—in other words, ERCOT anticipates that the state will have almost 10 percent more power available than is needed. However, the board of directors for the council has established that a reserve margin of 13.75 percent of peak electricity demand is required “to serve electric needs in the case of very high demand or unexpectedly high levels of generation plant outages.”
August 2016 brought Texas’s highest energy demand on record; and that usage is predicted to grow by 2 percent this summer.
Austin Gets the Lowest Price for Solar in the U.S.
In a new fifteen-year, 150-MW power purchase agreement, Austin Energy will get solar power from West Texas’s Intersect Power at a surprisingly low cost—the lowest in the country.
Greentech Media reports:
The Texas-based utility did not offer exact details on the megawatt-hour price for the agreement. But based on some back-of-the-envelope calculations … [the estimated cost] hovers between $23.50 and $27.25 per megawatt-hour. It could even be as low as $21 per megawatt-hour.
Other calculations place the solar at 2.35¢ to 2.725¢/kWh, or possibly as low as 2.1¢/kWh. The long-term low pricing is surprising, Greentech notes, because of the “current climate of uncertainty” about the industry’s financial future. Fewer solar deployments took place in the third quarter than they have in the past two years; further, renewable energy companies are still assessing the impacts the tax bill will bring. (See our previous analysis of the tax bill’s impact on energy companies.)
With this latest acquisition, the utility Austin Energy announced that it will reach 51 percent renewable status in 2020. It currently provides renewable energy to 40 percent of its consumers.