The impacts of residential space heating electrification and climate change on variable renewable energy capacity credits in Texas

Abstract The capacity credit of a variable renewable energy (VRE) resource reflects its ability to contribute to meeting peak demand or provide generation during critical peak demand periods. Accurate estimation of these capacity credits can help inform system planners about how much dispatchable capacity can be retired without a reduction in reliability. Previous research has explored marginal changes in the capacity credit of wind and solar as a function of new capacity added to the system (i.e. renewable energy ‘eats it own lunch’), but the impacts of potential future changes in load profiles-driven by technology adoption and/or climate change has not been thoroughly explored. This study investigates how the capacity credit of VRE resources could be affected by space heating electrification (widespread adoption of heat pumps (HPs)) and climate change (increasing summer temperatures), focusing on the electric reliability corporation of Texas (ERCOT) as a case study. As a proxy for capacity credit, we measure the average capacity factor during peak and near-peak load hours. We explore multiple HP adoption scenarios and climate change scenarios over an 80 year span (2020–2099). One of our findings is that cooler climate scenarios, combined with the adoption of standard-efficiency HPs, leads to an increased frequency of peak load hours occurring during winter nights, during which solar resources have nearly zero capacity factors. This raises questions about how parallel decarbonization efforts (e.g. electrification) could influence the capacity value of VRE resources and, consequently, the reliability of different decarbonization pathways.