One of the world’s largest power companies is planning to pump $1 billion into new wind projects in Texas, confirming the state’s place as the nation’s largest producer of wind-driven energy.
The Spanish utility Iberdrola says the money will finance new wind farms with a combined generating capacity of 700 megawatts – enough to power some 140,000 Texas homes on a hot summer day. Those projects are part of the 33,000 megawatts of new wind resources that are under consideration or development in the state, according to the Electric Reliability Council of Texas, which manages about 90 percent of the state’s power grid.
Iberdrola’s new Texas projects will add to the 725 megawatts of wind power the company already operates in Texas through its American subsidiaries, Avangrid, Inc. of Orange, Connecticut and Avangrid Renewables of Portland, Oregon. Iberdrola’s largest wind farm, the 606-megawatt South Texas Coast Wind Farm, is located in Kenedy County, about 80 miles north of Brownsville.
Avangrid Renewables is developing the 286-megawatt Karankawa wind farm in Bee and San Patricio counties, which are just inland from Port Aransas and Aransas Pass north of Corpus Christi. Two other wind farms under development by Avangrid, the 200-megawatt Karankawa 2 in San Patricio County and 500-megawatt Comanche Run Wind farm in between Lubbock and Amarillo are listed in the state’s power generation development queue.
“I think you are already doing things very well (in Texas),” Iberdrola’s CEO Ignacio Galán said while visiting San Antonio this week. “You are using all of the natural resources. This state has oil, gas, wind and sun.”
Iberdrola is a global energy company with a stock market value of $47 billion in 2017. In the first quarter of 2018 the company reported that it had over 13 million electricity customers worldwide and more than 48,000 megawatts of generation installed in 12 countries including the United Kingdom, the United States, Mexico and Brazil. About 60 percent of its power is generated from renewable sources, including wind, solar and hydroelectricity.
In the United States the company operates some 6,400 megawatts of wind energy, enough to power some 1.3 million Texas homes.
Galán was in San Antonio Monday as part of a business delegation that met with Spain’s King Felipe VI and Queen Letizia. The royal couple were visiting San Antonio as part of the city’s celebrations related to the 300th anniversary of Spain’s founding of a colonial mission and presidio where the city is now.
Galán said that his company sees opportunities in offshore wind projects, which account for 544 megawatts or 3.3 percent of Iberdrola’s global wind fleet. The company operates about 15,533 megawatts of onshore wind.
The Spanish company is part of joint venture to develop developing a massive 800 megawatt offshore wind project 14 miles south of Martha’s Vineyard island in Massachusetts. Work on the Vineyard Wind project, a 50-50 partnership between Avangrid Renewables and Danish investment firm Copenhagen Infrastructure Partners, is expected to begin next year.
In Texas, however, offshore wind farms are likely a long way off, largely because of the strength of its onshore wind sector, which is concentrated on the plains of West Texas. Galán said there are still plenty of onshore resources in Texas that can be developed at much lower costs than offshore projects. An offshore wind farm can cost can cost nearly triple that of a onshore project, according to the International Energy Agency.
Anthony Logan of of the energy consultancy Wood Mackenzie said the United States has lagged Europe in the development of offshore windfarms in large part because it’s so much cheaper to build onshore, where equipment is more readily available and easier to transport. It’s also easier to recruit workers.
Developing offshore wind resources still relies on European expertise and equipment, Logan said, but companies willing to take on U.S. offshore projects now could have an advantage as that segment of the industry grows.
“We’re in an interim period where we’re still pretty reliant on European technology and European vessels and that gives Avangrid really strong step up in the overall U.S. offshore market,” Logan said. “They’re getting the first hand experience with large-scale U.S. offshore additions. That’s a very complicated market, it’s very different from onshore.”
In Texas, wind is gaining an increasing share of ERCOT’s market, producing 17.4 percent of power in 2017, up from 15.1 percent in 2016. Natural gas plants generated about 38.8 percent of ERCOT’ power last year, while coal and nuclear made up 32.2 percent and 10.8 percent respectively. Solar was less than 1 percent.
Only about 12.5 percent of the state’s wind resources are located in coastal counties, but a combination of factors may push more wind energy development toward the Texas Gulf Coast, said Joshua Rhodes, a research associate at the University of Texas at Austin’s Energy Institute
He said that large industrial, petrochemical and liquefied natural gas plants being built in Freeport and Corpus Christi will require large amounts of electricity, power that could be provided by coastal wind projects. Rhodes says West Texas wind is also facing transmission constraints and as more projects try to send power east to the state’s population centers.
That means that coastal projects closer to those population centers may gain advantages over West Texas wind.