How Green Energy Won Out Over Fossil Fuels in a Red State

In Texas, wind power is set to come online faster than natural gas over the course of the next decade.

GERDSHAGEN, GERMANY - JUNE 22: Wind turbines producing electricity spin in a field on June 22, 2012 near Gerdshagen, Germany. Germany is investing heavily in renewable energy sources as part of a government initiative to wean the country off nuclear, and eventually coal-based, energy. 
National Journal
Clare Foran
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Clare Foran
May 22, 2014, 3:59 p.m.

Wind is go­ing head to head with nat­ur­al gas at the heart of the frack­ing boom — and wind is win­ning.

Frack­ing — a drilling tech­nique that in­volves break­ing open shale rock form­a­tions to ex­tract oil and nat­ur­al gas — has taken Texas by storm. The Lone Star State is dot­ted with drill sites and leads the na­tion in nat­ur­al-gas pro­duc­tion. But wide open spaces and strong gusts make it an ideal place to turn tur­bines. And Texas also takes the top spot for states with the most wind power.

Green en­ergy has stead­ily gained trac­tion in the deep-red state. In 2003, wind made up less than 1 per­cent of the power sup­ply, ac­cord­ing to state grid op­er­at­or the Elec­tric Re­li­ab­il­ity Coun­cil of Texas. By 2013, that share had ris­en to roughly 10 per­cent.

Tex­an wind power is set to take off in a ma­jor way. From 2013 to 2014, ER­COT es­tim­ates that wind ca­pa­city will in­crease by 33 per­cent. Wind-power po­ten­tial is pro­jec­ted to jump an­oth­er 25 per­cent from 2014 to 2015 — a sharp up­tick in in­stall­a­tion that comes on the heels of a half dec­ade of re­l­at­ively slow growth. (From 2008 to 2013, in­stall­a­tions av­er­aged a 7 per­cent in­crease each year).

It’s also on track to com­mand an out­sized share of newly min­ted power po­ten­tial in the Lone Star State. And wind is troun­cing nat­ur­al gas in early es­tim­ates of ca­pa­city set to come on­line over the course of the next dec­ade.

Wind-power pro­jects are poised to make up nearly 70 per­cent of new power ca­pa­city in the de­reg­u­lated mar­ket, ac­cord­ing to ER­COT. The grid op­er­at­or pro­jects that more than 8,600 mega­watts of wind power — enough en­ergy to keep the lights on for hun­dreds of house­holds across Texas — will be up and run­ning by 2024.

Nat­ur­al gas won’t fare nearly as well. About 3,580 mega­watts of gas-fired power po­ten­tial are slated to come on­line in the same in­ter­val. If that fore­cast holds true, gas would make up only 28 per­cent of fresh power po­ten­tial in the state.

What’s caus­ing wind pro­duc­tion to soar?

In a word: in­fra­struc­ture. Tex­an wind had been plagued by a ma­jor prob­lem in the past. The win­di­est parts of the sprawl­ing state are hun­dreds of miles away from its largest pop­u­la­tion cen­ters. And the op­tions for send­ing elec­tri­city from areas with the best wind po­ten­tial like West Texas and the north­ern­most part of the state — known as the Pan­handle — to cit­ies like Hou­s­ton, Dal­las, and San Ant­o­nio have his­tor­ic­ally been lim­ited.

In 2005, the Texas le­gis­lature ap­proved a sprawl­ing net­work of trans­mis­sion lines de­signed to solve ex­actly this prob­lem. After years of con­struc­tion, the power lines — known as Com­pet­it­ive Re­new­able En­ergy Zones — star­ted ship­ping elec­trons across the state in Decem­ber.

De­velopers say the power lines are key to un­lock­ing the state’s wind-power po­ten­tial. “For the longest time there was noth­ing there,” said Jim Swaf­ford, the CEO of Scan­dia Wind South­w­est. Scan­dia is one of sev­er­al com­pan­ies back­ing a large-scale wind-power pro­ject in the Texas Pan­handle. Swaf­ford says the power lines made it all pos­sible. “I had people com­ing from all over the coun­try who wanted to build. But they’d walk away every time, be­cause be­fore there was no way to get the wind from point A to point B,” he said.

Stat­ist­ics tell the same story. Eighty per­cent of the total wind ca­pa­city es­tim­ated to come on­line by the end of 2024 will ori­gin­ate from the spin­ning blades of wind tur­bines set to spring up in West Texas and the Pan­handle.

The boost that the power lines are giv­ing to wind power il­lus­trates in­fra­struc­ture’s abil­ity to slow or speed an en­ergy boom. But trans­mis­sion isn’t the only reas­on wind power is tak­ing off in Texas.

Policy has also played a role. The ex­pir­a­tion of the re­new­able pro­duc­tion tax cred­it — an in­cent­ive that pays out 2.3 cents per kilo­watt hour of wind pro­duced — promp­ted a rush to break ground on new wind pro­jects be­fore the cred­it lapsed at the end of last year.

If the cred­it is not ex­ten­ded, the wind in­dustry’s growth in Texas could lag. And ana­lysts warn that even with the new trans­mis­sion lines, green en­ergy could hit a bot­tle­neck in the Pan­handle as de­velopers race to churn out more wind.

For now, however, the avail­ab­il­ity of the tax cred­it along­side the po­ten­tial for tur­bines to link up with power lines means that the fu­ture of wind power in the Lone Star State is bright.

Nat­ur­al gas, mean­while, faces hurdles of its own. Gas re­mains the dom­in­ant Tex­an fuel. But power ginned up by gas plants dropped from 46 per­cent of total elec­tri­city gen­er­a­tion in 2003 to 40 per­cent in 2013. And gas plants slated to come on­line in the next dec­ade only prom­ise to provide a frac­tion of the power po­ten­tial of wind pro­jects in the queue.

This is partly be­cause gas has fallen vic­tim to its own suc­cess. The flood of nat­ur­al gas that has res­ul­ted from frack­ing has sent elec­tri­city prices in­to a down­ward spir­al in Texas. Monthly elec­tri­city bills have de­creased dra­mat­ic­ally. But that also means that gas plants are mak­ing less money — a trend that has slowed in­vest­ment in nat­ur­al-gas gen­er­a­tion.

“Texas is in a pickle right now,” said Alan Lam­mey, a seni­or en­ergy ana­lyst with LCI En­ergy In­sight and the Oil Price In­form­a­tion Ser­vice. “Low elec­tri­city prices have hurt power pro­duc­tion across the board, but wind has be­nefited from in­vest­ment in tech­no­logy and in­fra­struc­ture — and that’s help­ing it pull ahead.”

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