A little more than a year ago a $7 billion expansion of Texas’ power grid was completed to accommodate the flurry of new wind farms under construction.
But as wind power continues to boom across the plains of West Texas and the Panhandle, the system – named CREZ, or Competitive Renewable Energy Zones – could soon be nearing capacity again.
The state’s grid operator, the Electric Reliability Council of Texas, is studying the transmission system in the Texas Panhandle, where at least 2,200 megawatts’ worth of new wind farms – enough to power more than 400,000 homes – are expected to begin operation before 2017.
Right now the region has about half that much wind capacity. And with an additional 3,600 megawatts planned, it might not be too long before the CREZ lines reach their limit, said ERCOT’s director of system planning, Warren Lasher.
“A lot has changed since the CREZ project was first established in 2006,” he said. “We’re seeing a lot of interest in the Panhandle. And if additional wind farms [commit to construction], above a certain point we will need new transmission.”
Between the powerful winds that sweep the plains and the ticking clock on federal tax credits for wind farms, developers have been sweeping into Texas to try to hook into its new and expanded grid.
But the renewable rush has received mixed reactions from Texas politicians. Former Gov. Rick Perry has trumpeted the state’s status as the largest wind-energy producer in the country as he prepares for an expected presidential run.
But some state politicians, including Public Utility Commission Chairwoman Donna Nelson, have suggested that the state is paying too much to update the grid for renewable energy. This past summer, Nelson suggested amending the system of spreading new transmission costs equally among power plants, potentially leaving wind farms to bear a larger cost of new lines.
Already, some wind developers are holding off on committing to new projects, waiting to see what state officials decide, said Jeff Clark, executive director of the trade group The Wind Coalition.
“There’s concerns there will be constraints and they will be left waiting for transmission to catch up,” he said.
As yet, there is no estimate on how much upgrading CREZ in the Panhandle would cost. But with transmission costs running about $2 million a mile, the bill is likely to be in the hundreds of millions of dollars at least.
Before any work is done, ERCOT would need to assess not only whether it is necessary but also whether it makes sense economically.
Ken Anderson, a PUC member, said the state should wait and see how many farms actually get built before moving ahead.
“Assuming everything gets built, which rarely happens, there’s not any kind of imminent crisis,” he said. “If and when they do get fully subscribed and you start to see congestion and there’s a reliability issue, the owners of those lines could come back to ERCOT to add capacity.”
ERCOT is already examining a stopgap measure, installing equipment that better controls the intermittent flow of electricity from wind turbines. That should buy some time, Lasher said.
In the meantime, developers that have already committed to building are waiting to hear from the IRS on when they need to get their turbines up and running if they are to qualify for the tax credit.
Most are expecting that deadline will be the end of 2016. And on grids across the country, developers are finding there’s not enough transmission space for everyone to get online by then, said Mike Kelly, vice president of the Dallas wind power developer Tri Global Energy.
“Everybody has this perception that we have one door in the theater, and everyone needs to get their projects going at the same time,” he said. “Almost all across the country you have an imbalance between what people want to do and what the system can handle. Some of these projects are just going to disappear.”
|Wind Watch relies entirely
on User Funding