Texas has led the nation in adding wind power for three years running and there’s no sign that the state’s burgeoning industry will hit the doldrums anytime soon.
As it has for the past few years, Texas continues to attract investment from U.S.-based energy giants, huge international energy companies and even home-grown billionaires.
Take oil tycoon and investor T. Boone Pickens, who reiterated last week that he plans to spend $2 billion on the first phase of a sprawling wind farm in the Texas Panhandle. Pickens has purchased 667 turbines from GE Energy, and he envisions the four-phase project will include 2,500 wind turbines by 2014.
Global giants, too, continue to invest significant sums in Texas wind power, such as Babcock & Brown, based in Australia, and Iberdrola, a huge Spanish energy company. Each has or will invest millions in Texas wind farms.
International oil companies also are betting heavily on wind power in Texas. Shell Oil’s Shell WindEnergy is pairing with Luminant, a division of Energy Future Holdings, the successor to TXU Corp., to build a giant 3,000-megawatt wind farm in Briscoe County in the southeastern Texas Panhandle.
Florida-based giant FPL Corp., which owns three of the nation’s five biggest wind farms – all three in Texas, plans to add 7,000 to 9,000 megawatts of wind throughout the nation through 2012, and “Texas will be an important part of meeting those growth targets,” FPL spokesman Steve Stengel said.
And soon, Eon, the largest utility in Germany, will expand a wind farm west of Sweetwater that will make it bigger than FPL’s Horse Hollow, now Texas’ biggest. Eon’s expansion will be completed in summer 2009.
Texas now has 5,316 megawatts of wind-generated power installed and thousands more megawatts are planned. (One megawatt is roughly enough electricity to power 500 to 700 average-sized homes at a moment in time under normal conditions in Texas, or about 200 houses in hot weather when air conditioners are running, according to the operator of the Texas grid.)
San Antonio is part of the growth, as the city’s CPS Energy is ranked No. 1 among municipal utilities in the amount of wind power it buys.
“I can see 2,000 wind turbines outside my window, some twice as high as the Statue of Liberty,” said Greg Wortham, founder of the West Texas Wind Energy Consortium in Sweetwater. “There’s multiple billions of dollars worth of wind farm development going on. The growth is all so much more than people realize.”
But wind farm developers face three obstacles as they plan expansions. Texas lacks adequate transmission capacity to get power from Panhandle and West Texas wind farms to cities along Interstate 35, from Dallas south to San Antonio, and east to Houston.
Also, the federal tax credit that some say has spurred much of the wind farm construction is set to expire at the end of this year. And, too, some property owners are objecting to wind farm construction and transmission lines that would cross their property.
Whether billions more will be invested in wind energy in Texas depends on where the next transmission lines will be added. The Texas Public Utility Commission will decide on July 17 where to add transmission lines that can cost as much as $1 million a mile. The commission is looking at five possible routes for the lines as outlined by ERCOT, the Electric Reliability Council of Texas, which operates the electric grid.
The five scenarios range from adding transmission to handle 12,053 megawatts of installed wind generation in the most modest plan to 24,419 megawatts in the most ambitious. That would be enough transmission to power 2.4 million to 4.9 million homes in Texas on a hot day at a single moment of peak demand.
The cost for the five scenarios ranges from $2.95 billion to almost $6.4 billion, it said.
Wortham believes the PUC will be “very bold” in outlining a big investment in transmission.
“Business wants to act. People with billions to invest are waiting for the regulators,” Wortham said. He’s also mayor of Sweetwater, where wind farm development is intense.
Some investors aren’t prepared to wait for transmission lines. Pickens said he’s prepared to pay for transmission lines, if necessary, to get the electricity from his Pampa Wind Project to metro areas where it’s needed.
The total cost of all four phases of Pickens’ project will be $10 billion to $12 billion, including transmission, a spokesman for Pickens said.
But at a meeting in Childress on May 16, a sizable group of landowners told state legislators that they oppose Pickens’ plan to obtain rights of way for transmission lines, the Associated Press reported. The lines would cross through parts of five Panhandle counties.
Closer to San Antonio, an organization in Fredericksburg, Save Our Scenic Hill Country, last fall successfully opposed a plan by wind developers to erect wind turbines in Gillespie County.
Members of the group have said they fear that adding huge turbines will harm tourism to the area and property values. They’ve also said they believe the companies building wind farms may not necessarily be responsive if there’s a problem with a turbine.
Such views disturb Russel Smith, executive director of the Texas Renewable Energy Industries Coalition. “I’m not concerned that multinational companies building major plants are going to neglect and ignore their projects,” Smith said. “That doesn’t make sense.”
Wind farm investors also are concerned about another possible impediment to development – the year-end expiration of the federal production tax. Commercial wind farm developers are eligible for an income tax credit of 2 cents per kilowatt-hour of electricity produced. The industry is dependent on federal subsidies because wind has high upfront costs, the Texas comptroller said in a recent report.
The tax credit, created in 1992, has been extended a number of times and it also has been allowed to lapse in 1999, 2001 and 2003, the American Wind Energy Association said. FPL spokesman Steve Stengel said “there is bipartisan support for the production tax credit. We think it will be extended.”
And Wortham believes that vast amounts being invested in wind farms and the hundreds of jobs being created will help mute criticism of the industry.
“Ninety-eight percent of the people in West Texas want turbines,” Wortham said, “and we’re in a perfect place to provide power. Businesswise, we’re ahead of everybody else.”
By Vicki Vaughan
Express-News staff writer
24 May 2008
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