Wind farm developers apprehensive that a federal incentive crucial to their success will die this year described tentative projects worth $6.7 billion planned for the Texas Panhandle over the next four years at an energy meeting Thursday in Amarillo.
The industry sees the production tax credit as crucial for making wind energy profitable and competitive, especially now when low natural gas prices make electricity produced with that fuel cheaper than wind energy in many cases. The program paying the credit is set to expire at the end of 2012. In anticipation of that, developers are delaying work to see how legislators decide to proceed.
There is a time gap between when orders for wind turbines are placed and the start of construction. So as developers find they can’t be finished with construction by the end of the year, they are putting projects on hold, said Dennis Stout, development manager for E.ON Climate & Renewables North America.
“We need it passed now so we can place those orders,” he said at the conference organized by local industry support group Class 4 Wind & Renewables. “E.ON has $1 billion at stake in 2013. It can’t invest without a (production tax credit) extension.”
E.ON has plans for three area wind farms, two near Happy and one near Pampa, that would have a combined capacity of 1,200 megawatts.
The Alternative Energy Institute at West Texas A&M University estimates it costs $2 million per megawatt to construct a wind farm. That would project E.ON’s wind farms’ cost near $2.4 billion.
“Not in 2012 or 2013,” Stout said. “We have other projects in the pipeline first.”
There are two wind installations in Oldham County that Cielo Wind Power developed, and it is overseeing the construction of a third there to be finished in 2012. That will put wind capacity in the county at 400 megawatts, more than any Texas Panhandle county, said Melissa Miller, vice president for Texas development. Building the new wind ranch, as Cielo calls the projects, will cost about $320 million, according to Alternative Energy Institute estimates.
NextEra is also ready to start construction. Its wind farm would be in Carson County, with one turbine in Potter County. It would have a capacity of 79.6 megawatts and cost about $160 million.
Construction should be complete later this year, project manager Adam Rickel said.
Pattern Energy is working on an energy transmission project to connect the Texas electrical grid with another grid powering many southern states. That will allow Texas to export wind energy. But Pattern also has plans for the Panhandle.
“We’re developing a large project in Potter, Carson and Gray counties, primarily,” said Glen Hodges, who oversees development projects for Pattern. “There would be up to 1,000 megawatts placed in operation if the market is able to handle it.”
That project could cost $2 billion.
A relatively new company, Tri Global Energy, is working on 13 projects in the region that are primarily in the central Panhandle. The Dallas company is 3 years old.
“We’ve been kind of under the radar,” said Bill Golove, chief development officer. “This is, in a way, part of our coming out.”
Tri Global has 600,000 acres leased for development that it funds by recruiting landowners and local investors to participate in what is called “community wind.”
National Renewable Solutions follows a similar course. It has 35,000 acres leased in Randall and eastern Deaf Smith counties for a 300-megawatt wind farm called Buffalo Wind in addition to 85,000 acres in New Mexico’s Curry County and for another installation in western Deaf Smith County, said Pat Pelstring, president and CEO.
The Buffalo Wind project would cost about $600 million, according to WT’s estimate.
RES Americas hopes to develop three projects in Briscoe and Floyd counties with a a total capacity of 600 megawatts in the next two years.
“Utility demand is going to be required,” director of development Chad Horton said. “But certainly we’re preparing for that.”
The price tag would be about $1.2 billion.
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