Responsible Drilling Alliance

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25
Apr

Windy

Texas Wind Farm (Photo from: energydigital.com)

By Ralph Kisberg

 

Texas? Seriously?

It’s a fact: after 14 years under the administration of Governor Rick Perry (now Trump’s Energy Secretary/aka Oil and Gas Stooge), the O&G behemoth state of Texas is now outpacing all other states and all but 5 nations in wind production.

Along with producing the most oil and gas and consuming far more electricity, it would figure that Texas produces more CO2 than any other state … but more clean, renewable, wind power?

You may have read that at one point last fall, 45% of all Texas’s electrical power came from wind. We all know Texas is big, and often, it blows.

Warren Lasher, Director of Systems Planning of ERCOT (Electrical Reliability Council of Texas) explains why Texas wind power is flourishing, “ I think what sets Texas apart is the combination of the open deregulated wholesale market and the ease with which new technologies can connect to the grid.”

Twenty-nine states have adopted some form of renewable energy portfolio (RPS) standards. Texas did that way back in 1999 under George W. Bush. The state deregulated electrical power producers back in 2002.

The connection ease Lasher referred to is the $7B in recent transmission improvements to the ERCOT power grid that allow renewable sources to get to market. Called CREZ (Competitive Renewable Energy Zone), the additions (link the 2 words to a map from IEEFA) make the whole grid more flexible and thus able to source power when production from renewable sources (primarily wind) is available and demand is high.

ERCOT also devised a competitive market structure, where the lowest-priced sources of electricity, wind and solar, are ordered (dispatched) to the grid ahead of the more expensive fossil fuel sources, like natural gas and coal, which have fuel costs that wind and solar do not. Fossil fuels also have higher operating & maintenance (O&M) costs.

So on a big wind day, the average ERCOT grid power mix (in 2015) from gas (50%), coal/lignite (24%), nuke (6%), wind (14%) and currently a small solar component (1%), can see a huge boost in very inexpensive wind power.

Despite the fact that subsides for wind and solar sources will be going way soon due to expiring federal tax credits, Xcel Energy Inc. Chairman, President and CEO Ben Fowke, whose company serves more than 3.3M electric customers in 8 states including Texas, recently explained:

We like to say that most of our customers … want a cleaner energy product; all of them want an affordable, reliable product. It’s not inconsistent with what we’re doing, “[Renewables], and particularly here (Texas) with wind, are economically compelling.
 

Xcel currently produces 19% of its energy from wind. They plan to increase that to 35% by 2021, expecting the fuel savings will more than offset capital costs. In all of ERCOT, wind’s percentage of generation is expected to rise significantly by 2020 as another 10,000 megawatts (MW) of wind capacity is planned added to the CREZ from the current 17,000 MW.

In other bad news for coal, gas, and nuke power, solar generation capacity is expected to rise from the current 1% to 17% of all ERCOT generation by 2031. According to economist David Schissel of the International Energy Economics and Finance Institute, “By the early 2020s, unsubsidized wind and solar prices will be below the variable costs of operating coal and natural gas plants, just like subsidized prices are today.”    

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