Library filed under Energy Policy from Texas
The Lone Star State's renewable-energy mandates - combined with the federal government's generous tax credit for wind-energy production - have helped Texas become the nation's leading installer of wind-energy capacity. You won't find much opposition here to wind energy's rapid expansion, because so much money is pouring into the state. It's all fun and games - until Texas consumers pay the long-term price for everyone else's short-term gain. And pay they will. In my just published study, Texas Wind Energy: Past, Present, and Future (PDF here), we estimate that forcing even modest levels of wind-energy generation on Texans will cost ratepayers and taxpayers up to $4 billion a year, and at least $60 billion through 2025.
Texas consumers and taxpayers could pay more than $2.2 billion a year in subsidies and higher transmission costs to take advantage of the state's abundant wind-generation resources, a free-market research group said on Tuesday. The state's current push to accelerate use of wind-generated electricity is "costing, not saving, Texans billions of dollars," said Bill Peacock, director of the Texas Public Policy Foundation's Center for Economic Freedom. ...By 2025, the study said the price tag could total $60 billion as Texas reaches 10,000 megawatts of wind capacity.
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.
Wind Energy Systems Technology, headquatered in New Iberia, recently ad-dressed the Louisiana Public Service Commission regarding its desire to expand wind-gathering operations to the Louisiana Coast. Harold Schoeffler, of Lafayette and W.E.S.T. partner , said the group left the meeting with more questions then answers. ...Schoeffler said the Public Service Commission has transferred renewable energy to the state Department of Natural Resources.
It is clear the majority of commissioners court is in favor of allowing the wind farm to go up in northern Young County. From a government perspective, the choice is easy. By agreeing to waive some of the property tax for 10 years, commissioners will see the income to the county rise by between $200,000 and $400,000 each year. ...While wind farms are often beneficial to property owners who lease their land, they are frequently hated by other land owners. The bottom line is putting 40 or 50 wind generators up in Young County will drastically change the scenic view many people have become accustomed to. If you want an example of what you may see, just drive down Highway 16 South toward Possum Kingdom Lake and look at the windmills sitting south of Bryson.
As North Texans sweltered through another 100-degree-plus day, the windmills around Sweetwater turned lazily in the West Texas breeze, ...It's not much - barely 1 percent of the peak electricity demand Monday for the Electric Reliability Council of Texas, operator of the transmission grid for about 75 percent of the state. But it's about what is expected from the state's wind-power industry, by far the nation's largest, during the dog days of summer, when temperatures climb but wind speeds dip on the West Texas plains. "In general, wind's peak energy does not coincide with peak electricity demand. It's not a good match," said Andy Swift, director of the Wind Science and Engineering Research Center at Texas Tech University in Lubbock.
Jon Bennett, a public relations spokesman for TXU Energy praised the wind energy industry here this week where tall white wind turbines line the horizon. The problem, he said, is that there has to be a reliable mix of power. "One thing that's not very popular is to stand in front of a wind generating group and say wind is not the only solution," Bennett said. "There are other solutions out there that need to be developed." How else, he asked, can power be sustained when the wind falls off?
The Texas Public Utilities Commission took no action Thursday on a final order intended to say how much wind power can come from special zones, which were set up to speed the building of transmission lines. "The staff is still working on the final language for the order," said Terry Hadley, the commission's spokesman. "They expect that no later than the next meeting on Aug. 14." The preliminary order the staff is fleshing out calls for 18,000 megawatts of wind power
The potential for wind energy is vast, but forgive West Texans if they have an overblown (pun intended) view of what it could mean in the future. Among those, of course, would be Panhandle oilman T. Boone Pickens ...All that said, we have to understand the realities of the entire nation and not be dazzled by the positive effects that have been and will be felt from a regional standpoint.
Texas is requiring utilities to generate 5,880 megawatts of electric power from renewable sources by 2015 and 10,000 megawatts by 2025. No problem there. Wind power entrepreneurs have created a new energy boom in West Texas. There's already more wind electricity available than the limited transmission system in the region can handle. And hundreds of private companies have proposed new electric highways. They are waiting for the Public Utility Commission of Texas to determine who will get the cost-plus contracts and where the lines will be constructed.
Unrealistic energy policy is not limited to Washington, D.C. Numerous states clamor for "green" status - picking energy-supply winners and losers and rushing to judgment in the ongoing and unsettled debate on greenhouse-gas emissions. Environmental groups have virtual veto authority over cleaner coal-fired power plants, nuclear facilities, and oil refineries, which can meet an exponentially larger portion of energy and electric demand than the heavily subsidized renewable energies. ...Consumers deserve energy realism, not fanciful plans to replace fossil fuels with renewables. When misguided environmental theory dictates energy policy, the result is high prices, unreliability, and inadequate supply.
I don't have the benefit of a $58 million marketing campaign, but I'm willing to throw down my own five-point proposal, culled from years of writing about, researching and discussing the issue with energy experts, including Pickens. My plan begins with the idea that energy is really about economics. The solutions, therefore, must make economic sense. That doesn't mean consumers won't have to pay more - we will. And providers must be able to make reasonable returns. Subsidies are fine to develop technology, but we can't sustain businesses that aren't profitable without them, which is why I'm skeptical of wind power.
The transmission problem is so acute in Texas that turbines are sometimes shut off even when the wind is blowing. "When the amount of generation exceeds the export capacity, you have to start turning off wind generators" to keep things in balance, said Hunter Armistead, head of the renewable energy division in North America at Babcock & Brown, a large wind developer and transmission provider. "We've reached that point in West Texas." ...The exact route of the transmission lines has yet to be determined because the state has not yet acquired right-of-way, according to Mr. Withrow of the utility commission. The project will almost certainly face concerns from landowners reluctant to have wires cutting across their property.
Texas officials gave preliminary approval Thursday to the nation's largest wind-power project, a plan to build billions of dollars worth of new transmission lines to bring wind energy from gusty West Texas to urban areas. ..."We will add more wind than the 14 states following Texas combined," said PUC Commissioner Paul Hudson. "I think that's a very extraordinary achievement. Some think we haven't gone far enough, some think we've pushed too far."
A divided Public Utility Commission gave preliminary approval today to construct $5 billion in transmission lines to bring wind power from West Texas to urban areas. The project is expected to cost average household consumers about $4 a month. It should boost the state's wind farm business, already the largest in the nation, to even greater levels. It would increase capacity for wind generation to 18,456 megawatts. The plan, which is expected to be finalized later this month, is a middle ground between five scenarios ranging from $3 billion to $6.4 billion.
Eight legislators from the Dallas-Fort Worth Metroplex sent a letter to the Public Utilities Commission (PUC) Monday urging the Commission to opt for aggressive expansion of electricity transmission capacity from West Texas to reign in soaring electric bills and prevent further pollution of local air. ...The letter calls on the PUC to adopt Scenario 3 when it meets Thursday to continue its discussions regarding which scenario will offer the greatest benefits to Texans for moving electricity from the Competitive Renewable Energy Zones (CREZ) in West Texas and the Panhandle.
The large wind farms just to our north on the Kenedy Ranch are under construction and the owners expect to have 250 wind turbines generating enough electricity to power some 90,000 homes by the end of this year. ...While the privately owned Kenedy Ranch is the site of wind farms under development by private corporations, the government continues to prop up the industry through subsidies in the form of tax credits. In other words, wind farm development likely would be a less attractive business venture without help from the government.
Texas should meet its growing electricity demand by encouraging more power plants fueled by coal and nuclear power, maximizing use of the state's vast wind resources and reducing dependence on expensive natural gas, according to recommendations by a task force appointed by Gov. Rick Perry. The report was issued Thursday by the Competitiveness Council, consisting of more than two dozen business, consumer and government representatives. It made 36 energy-related recommendations aimed at achieving "long-term sustained economic success." A public hearing on its conclusions is scheduled for Monday in Austin.
We like the idea of wind power because it seems natural and clean. Windmills, after all, are part of our pastoral vision of Americana - power, nostalgia and patriotism rolled into one. What's not to like? Only the economics. Wind power, despite the government's best efforts to create a market, continues to be dogged by the same problems it always has: high costs, limited reliability and bad location. No wind, after all, blows forever, and when it does, it's not blowing where people need power. Even now, West Texas wind farms sit idle, awaiting new power lines to take high-priced power to the people.
State regulators welcomed wind farms into Texas' unfettered wholesale power market through a special process to designate the best wind-power production zones and to accelerate construction of power lines -- costing from $3 billion to $6 billion -- needed to link those remote areas to more populated areas of the state. However, problems that surfaced in the Texas wholesale market as wind's influence reached a critical level this spring should be a warning for the rest of the nation, said Lawrence Makovich, vice president and senior power adviser at Cambridge Energy Research Associates. "Wind is not a direct substitute for conventional power supply," said Makovich. ...Wind is attractive if added in moderation, Makovich said. "It has a desirable environmental profile, but you want to incorporate a smart amount of wind," he said. "If you add too much, you may impose too much additional cost."