Articles filed under Energy Policy from Texas
Texas utility regulators on Thursday awarded nine companies rights to build $5 billion in new electric transmission lines to move power from windy areas to big cities like Dallas and San Antonio, a move aimed at doubling renewable energy supplies. ...But rapid addition of turbines in the western half of the state outstripped the ability of the existing high-voltage network to move the power to the state's largest cities, creating costly grid congestion in 2008.
A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands. Because of intense competition, the way wind tax credits work, the location of the wind farms and the fact that the wind often blows at night, wind farms in Texas are generating power they can't sell. To get rid of it, they are paying the state's main grid operator to accept it. $40 a megawatt hour is roughly the going rate.
The negative prices appear to be the result of the large installed capacity of wind generation. Wind generators face very small costs of shutting down and starting back up, but they do face another cost when shutting down: loss of the Production Tax Credit and state Renewable Energy Credit revenue which depend upon generator output. It is economically rational for wind power producers to operate as long as the subsidy exceeds their operating costs plus the negative price they have to pay the market. Even if the market value of the power is zero or negative, the subsidies encourage wind power producers to keep churning the megawatts out.
When investor Boone Pickens put a hold on a huge wind power project in the Texas Panhandle that he had announced in the spring, he wasn't alone. A number of wind power developers and researchers say the ongoing credit crisis, together with transmission congestion in West Texas and falling natural gas prices, will slow the state's breakneck expansion of wind capacity. ...But there also is a peculiar wrinkle in wind power's finance that makes the current environment doubly challenging. "Most wind projects in the U.S. are funded by investors with an appetite for tax benefits," said David Groberg, vice president of Invenergy Wind, a Chicago-based company with 690 megawatts of wind capacity in Texas.
The major problem with wind as a power source is that it doesn't blow all the time. To remedy that, Texas is spending $30 million a year to bolster its back-up power, in a change to the electricity grid that began on Nov. 1. ...
Texas' efforts to make it the nation's leading wind energy state have come at a cost - at least $60 billion between now and 2025 - that will be borne by consumers and taxpayers, according to a report released today by the Texas Public Policy Foundation.
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.
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.
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.