As if this wind boom were not enough, there could be another one on the way. Developers of a further 850 MW have applied for the right to connect to Texas transmission lines by 2002, according to publicly filed documents. Filings of renewable energy projects with the Electricity Reliability Council of Texas (ERCOT) amount to 2650 MW, including the 1600 MW in known wind projects. All are seeking interconnection to the grid this year or next. Details of some of projects are being kept quiet, however, since the applicants do not want their plans publicised.
Much of the impetus in Texas comes from the state's Renewables Portfolio Standard (RPS), which mandates 2000 MW -- or about 3% of the state's electricity supply -- by 2009. In addition, wind's federal Production Tax Credit, worth $0.015/kWh for the first ten years of a project's life, is currently set to expire at the end of 2001, fuelling the current rush to meet the RPS mandate before the end of next year.
Details of the RPS, part of the deregulation of the Texas power market, were only made known as recently as January. The first renewables benchmark is a minimum of 400 MW by 2003. Retail competition starts on January 1, 2002, along with the state's Renewable Credit Trading Program, an essential part of the RPS mechanism. Retailers not securing their quota of green power credits will face a penalty of $50/MWh, or 200% of the average cost of credits traded during the year (“uåX˜äŠÊ˜·³Ç, February 2000).
Texas has a well-known history of energy independence because of its huge but now dwindling oil industry and this is often cited as a reason why the state has taken the lead in green power legislation. The price of oil and natural gas is also soaring to record levels making energy diversity and a firm price for fuel more attractive.
Credit trading
The largest area of growth is in West Texas, near the oil towns of Odessa and Midland and on the south ridge of the Permian Basin. It was here that a 75 MW wind farm of NEG Micon turbines was installed last year by FPL Energy of Florida and the Dallas utility Central and Southwest Services. And it is here that the recently announced 208 MW Reliant Energy project of 1.3 MW Bonus turbines (“uåX˜äŠÊ˜·³Ç, September 2000) and the first 160 MW of a 220 MW FPL project of Vestas turbines (“uåX˜äŠÊ˜·³Ç, August 2000) -- almost 370 MW in total -- is to break ground by the end of the year.
To win the coveted 160 MW order from TXU, FPL is apparently selling credits to the utility and selling the physical electricity into the state power pool at pool rates. Reliant reportedly has its eye on selling the green credits from its project, possibly to municipal and co-operative utilities in Texas. These can opt out of market deregulation in Texas, but are likely to have to go along with it to offer their customers competitive prices and will therefore have to meet the obligations of the RPS.
Further west
Another hot area for wind is farther west in Texas, near the New Mexico border, where work has begun on an 82.5 MW wind farm in Pecos County by National Wind Power, subsidiary of UK energy business Innogy (formerly National Power), and California's Orion Energy LLC. Construction of the 125 Vestas 660 kW wind turbines is due to follow closely after completion of the $80 million deal last month. Power purchase agreements have been signed with the Lower Colorado River Authority (LCRA) and TXU Electric & Gas for 50 MW and 30 MW, respectively. Initial electricity deliveries are expected in spring/summer 2001. A 125 MW interconnection agreement has been signed with West Texas Utilities Company.
The desert site is near a 30 MW project of Zond wind turbines from Enron Wind installed last year by American National Wind Power for Reliant and LCRA. Nearby, too, is LCRA's old 35 MW plant of Kenetech turbines. Still in the far west of Texas, Orion Energy has development plans on file with ERCOT for another 45 MW in Pecos County, to be completed by the end of next year, and for 175 MW in nearby Culberson County by April 1. The UK's Renewable Energy Systems has plans, too, for 100 MW to be developed with Cielo Power Market LP by September of 2001 in the same county.
More still
Not yet formally announced late last month is another 140 MW in Pecos County planned by Texas energy giant Enron Corp, of which 40 MW will most likely be sold to the City of San Antonio and the remainder to the power market pool via Enron Energy. Of that, 25 MW will be built by the end of this year, and the remainder -- including an extra 10 MW -- by next October. That is in addition to Enron Wind's proposed 200 MW of wind this year and 200 MW of wind next year in Sweetwater County -- and which may or may not be in addition to Central and Southwest's reported negotiations with TXU for another 100 MW of wind, quite possibly to be sited in Sweetwater County, near Abilene between Odessa and Dallas-Fort Worth to the east.
Last but not least, New York developer York Research Company, which developed Big Spring I and II -- a total of about 40 MW in Howard County for TXU -- is planning 250 MW in Ector and Winkler counties, just west of Odessa, by mid-2001.
It is clear that the state is adopting wind -- and other renewables -- in a typically Texas-sized fashion, though how solid wind projects still in the pipeline are remains to be seen; the developers could be simply "booking" transmission space with ERCOT. Nonetheless, the 2009 minimum of 2000 MW of clean energy will be met -- if the market conditions remain roughly constant -- by about when retail competition starts in January 2002. As the chairman of Texas Public Utilities, Pat Wood recently told the Dallas Morning News, "We'll surprise the nation and meet our renewables requirements seven years earlier.... Maybe we ought to bump up state law."
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