New Projects - Renewables

AWEA WindPower Takeaway: Everything wind is bigger in Texas

Blessings often come with burdens, and the Texas Story panel did not flinch from those thornier issues in the rosebud of wind energy riches. 

HOUSTON-True to one of its favorite mottos, Texas is a whole other country when it comes to wind power capacity.

The Lone Star state stands alone with close to 26 GW installed, by far No. 1 nationally and more than a fourth of all wind energy capacity throughout the U.S., according to the American Wind Energy Association (AWEA) annual report.

It’s revitalized places like the city of Sweetwater and Nolan County in the western part of the state, much like the oil and gas-rich Permian Basin turned Borger and Midland into corporate destinations. Ken Becker, executive director of Sweetwater Economic Development, has no misgivings about the economic boom that wind farms have brought to his region.

“It’s fun when the industry picks you,” Becker said during a session at AWEA’s WindPower 2019 conference this week, noting the impact on jobs and schools that the royalties and taxes generated via some 1,100 turbines installed throughout Nolan County. “It’s been a tremendous 20 years since the first turbine was installed.”

Blessings often come with burdens, and the Texas Story panel did not flinch from those thornier issues in the rosebud of wind energy riches. Competitors are battling back, and economic structures make it attractive to get in, but don’t ensure survival.

Dallas-based Leeward Renewable Energy, an affiliate of ArcLight Capital Partners, has invested big in Texas wind, including some 600 MW in Nolan County alone. The company is aiming for 1 GW but is also well aware of the risks involved.

“It’s wind friendly, there’s lots of land and the cost of entry is low, but there’s a lot of players,” said Jason Allen, chief operating officer of Leeward. “It’s a huge opportunity up front but you’ve got to be a good player long term”

Much of Texas wind operates within the Electric Reliability Council of Texas (ERCOT). The ERCOT market is based on pure competitiveness, with the cheapest option often winning the battle for a spot on the grid.

Beth Garza, director of ERCOT’s independent market monitoring unit, said ERCOT’s market design is unique in three respects: the transmission costs are borne by all loads, capacity is rewarded only for producing, and all generators must make their own calculated decisions on when to start up.

It’s a hyper competitive, risky environment bound only by the desire for the least costly form of energy.

Many critics of wind power say it’s got an unfair advantage due to the federal production tax credit (PTC) in place for many years. The expected phaseout of the PTC, of course, was much in discussion, as well as Texas state legislative efforts-certainly spawned by competitors-to limit those incentives.

“Take a piece of someone’s market share and see if they won’t come after you,” said Jean Ryall, a consultant with Legislative and Regulatory Strategy and Advocacy, hot off battles at the Texas Legislature. “No one likes being displaced.”

Several speakers said that wind energy has become a low-cost rival to other forms of energy, whether it’s gas or coal-fired. Its ascendency should continue with or without the PTC, they added.

“Opponents are always trying to find a way to load some more costs, especially to wind,” Ryall added. “The fact is every piece of energy on the grid has some sort of subsidy.”

The wind resource itself is free, no doubt, but it doesn’t always blow and sometimes the momentum stops. ERCOT’s Garza noted that revenue growth seems to be leveling off, which could impact future investment.

At the same time, Texas summer afternoons are hot, dry and still. Those factors seem to favor solar energy as the renewable go-to, but even Garza sees a good combination between the two.

“I see interaction among the players. On a sunny afternoon when wind is at nadir, that’s the solar peak,” she said. “The curves are very complementary for the two…that’s theoretical, so I’m eager to see if that combination is really powerful for Texas.”

The AWEA WindPower 2019 ran Monday through Thursday in Houston. It attracted close to 7,000 people from various companies across the wind energy sector.

 

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