|WESLACO, February 27 - Texas has immense capacity for energy production from wind as well as solar and biomass fuel. About 15 years ago, the State demonstrated its commitment to increase clean energy through legislation as well as government funding.
Our market-driven system with electric competition, incentives for renewables, and other factors in Texas has led to increased generation capacity and impressive growth in clean energy.
Customers also have more choices, and prices are lower than they would be otherwise. Progress in this arena continues, and we recently passed an important milestone in the ongoing development of Texas’ renewable energy resources.
In 1999, Senate Bill 7 (SB7) opened the doors of electric power competition in Texas. One of the goals of this legislation was to encourage the addition of clean energy into the Texas power grid. The Bill promoted the growth of renewable energy by establishing the Texas Renewable Portfolio Standard (RPS).
The RPS is the amount of power sold in the state that must be generated using renewable sources. In essence, the RPS created a market for renewable power by requiring the state’s electric providers to either construct renewable generation facilities themselves or buy from other firms which did so.
Texas energy providers have far exceeded these standards. The original RPS goal was 2,000 megawatts (MW) of additional, new renewable resource generation capacity by 2009. That level was surpassed in 2006. In 2005, the Legislature upped the goal by passing Senate Bill 20, which increased the target to 5,880 MW of renewable energy by 2015 and 10,000 by 2025 (including 500 MW from non-wind renewable sources). Texas capacity topped the 2025 goal in 2010.
The Lone Star State leads the way in wind capacity among all states by a large margin, with 12,214 MW installed as of June 2013 (according to the American Wind Energy Association). That’s more than twice as much as any other state. We also ranked first in new installations in 2012, with an addition of almost 1,826 MW. Wind provided 7.4 percent of the state’s electricity in 2012.
Wind farms require not only a lot of wind, but also a lot of space. The best areas for placement are generally in West Texas, the Panhandle, and some coastal areas. The problem facing the state when these assets began to be developed was getting the power from the windy areas to the populous regions of Texas where it was needed. A visionary plan embodied in SB20 identified Competitive Renewable Energy Zones (CREZ) with high wind potential and called for the Electric Reliability Council of Texas (ERCOT) to come up with the optimal way to link these areas to the population centers where electric power was needed.
After reviewing potential routes and options, ERCOT initiated a plan in about 2008. Transmission projects involving billions of dollars in investment and years of construction have been ongoing since that time. These lines originate in windy areas around Amarillo and the High Plains, the Permian Basin, Abilene, and west of San Angelo. From there, they generally go east to serve the large metropolitan areas along the I-35 corridor.
It was a massive undertaking. Finalizing the routes to try to avoid sensitive areas and attempt to satisfy landowners was a huge project in and of itself which had to be completed before the first shovel moved the first dirt. If you happened to drive along one of these lines as it was going up, you may have seen not only cranes and trucks, but also helicopters and other specialized equipment. The final tab on the investment is approaching $6.9 billion, with 3,588 miles of lines. The cost has been borne by transmission utilities which are regulated by the Public Utility Commission of Texas. These companies will recover their expense through fees paid by retail providers of electricity. Our firm was pleased to conduct the related impact studies that helped to quantify the effects of both construction and the added power in a market setting.
As of the end of last year, the dots were connected, and all of the major transmission projects in the plan were completed. The enormous resource of wind power can now be utilized where it is needed, thanks to the added transmission capability. It was a visionary plan, and I applaud the many people who dedicated countless hours to make it a reality.
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.