Policy analyst and attorney, Drew Thornley, of the Texas Public Policy Foundation examines the growth of wind energy in Texas over the last decade. While many policymakers and business leaders foresee wind as a major contributor to America’s electricity supply, his report identifies several practical obstacles that stand in the way of achieving that vision.
Policy analyst and attorney, Drew Thornley, of the Texas Public Policy Foundation examines the growth of wind energy in Texas over the last decade. While many policymakers and business leaders foresee wind as a major contributor to America’s electricity supply, his report identifies several practical obstacles that stand in the way of achieving that vision.
EXECUTIVE SUMMARY
Texas is a growing state with growing energy needs. A crucial issue is how to develop and allocate the state's vast natural resources so that Texans have reliable and affordable energy. Wind energy is an increasingly important part of this equation, as Texas leads the nation in installed wind-power capacity. But myriad questions and challenges confront wind energy's expansion, namely wind's intermittent nature, the lack of large-scale electricity storage, and limitations on electric transmission.
The greatest impediment to wind's large-scale contribution to our energy supply is its intermittent nature. The wind must blow in order for wind turbines to produce power. In Texas, however, wind blows the least during the summer months when we need power the most. The Electric Reliability Council of Texas (ERCOT) relies on just 8.7 percent of wind power's installed capacity when determining available power during peak summer hours.
Due to wind's intermittency, wind turbines have much lower capacity factors-measures of generating units' actual energy output divided by the energy output if the units operated at its rated power output 100 percent of the time-than conventional (thermal) power sources. As such, wind is not a baseload resource and cannot deliver a large portion of the demand for energy.
Second, electricity cannot currently be stored on a commercial scale. This lack of adequate large-scale electricity storage amplifies the effects of wind's variability and lack of correlation with peak demand. Without adequate windpower storage, wind-generating units must be backed up by units that generate electricity from conventional sources. In Texas' case, that means natural gas, a fuel source with extreme price volatility. Thus, wind energy is an inherently less valuable resource than fuel sources requiring no backup.
Another major issue surrounding wind-energy development is electric transmission capacity. The infrastructure does not exist to move electricity from the areas of Texas most suitable for wind energy generation-West Texas and the Panhandle-to the state's metropolitan centers, so new transmission capacity is needed. Texas' electric customers should be particularly concerned, as they will foot the bill for new transmission lines.
The distinction between wind and wind energy is critical. The wind itself is free, but wind energy is anything but. Cost estimates for wind-energy generation typically include only turbine construction and maintenance. Left out are many of wind energy's costs-transmission, grid connection and management, and backup generation-that ultimately will be borne by Texas' electric ratepayers. Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $4 billion per year and at least $60 billion through 2025.
Wind, like every other energy resource, has its pros and cons, and there is no doubt that wind power should be part of Texas' energy supply. Texas needs a variety of fuel sources, plus concerted efforts at conservation and efficiency, in order to meet its energy needs. However, wind energy should only be employed to the extent it passes economic cost-benefit muster. Instead of subsidizing private wind development and imposing billions of dollars in new transmission costs upon retail electric customers, Texas policymakers should step back and allow the energy marketplace to bring wind power online when the market is ready. Texas electricity consumers will reap the benefits of such a prudent path.
CONCLUSION
Wind power is, and will continue to be, part of Texas’ energy supply; but as Texas’ population and energy needs grow, the key question is what role wind should play in the energy-supply mix. Wind, like every other energy resource, has its pros and cons, and there is no doubt that wind power should be part of Texas’ energy supply. Texas needs myriad resources, as well as concerted efforts at conservation and efficiency, in order to meet its energy needs.
However, Texas’ policymakers must thoroughly examine both the benefits and limitations of wind energy, particularly issues of reliability, transmission, and cost. As opposed to getting ahead of markets and technology, wind energy should be employed to the extent technologically feasible and economically worthwhile. Instead of subsidizing and incentivizing private wind development and imposing billions of dollars in new transmission costs upon retail electric customers, Texas’ policymakers should step back and allow the energy marketplace, free from government interference and subsidy, to bring wind power online when the market is ready.
Wind power is not an energy-supply panacea but rather a supplement with the potential to play a beneficial role in Texas’ energy mix for years to come. With proper restraint from policymakers and with proven technology and costefficiency leading the way, wind will find its appropriate place in, and become an increasingly important part of, Texas’ diversified energy portfolio. Texas’ electricity consumers will reap the benefits of such a prudent path.
