Texas Wind Energy – Past, Present and Future

By Drew Thornley, Texas Public Policy Foundation
 
Introduction 
 
Texas is a growing state with growing energy needs. A crucial issue is how to develop and allocate the state’s vast natural resources so that Texans have reliable and aff ordable energy. Wind energy is an increasingly important part of this equation, as Texas leads the nation in installed wind-power capacity.

WindpowerTX

But myriad questions and challenges confront wind energy’s expansion, namely wind’s intermittent nature, the lack of large-scale electricity storage, and the limitations on electric transmission.

The greatest impediment to wind’s large-scale contribution to our energy supply is its intermittent nature. The wind must blow in order for wind turbines to produce power. In Texas, however, wind blows the least during the summer months when we need power the most. The Electric Reliability Council of Texas (ERCOT) relies on about 8.7 percent of wind power’s installed capacity when determining available power during peak summer hours.

Due to wind’s intermittency, wind turbines have much lower capacity factors—measures of generating units’ actual energy output divided by the energy output if the units operated at its rated power output 100 percent of the time—than conventional (thermal) power sources. As such, wind is not a baseload resource and cannot deliver a large portion of the demand for energy.

Second, electricity cannot currently be stored on a commercial scale. This lack of adequate large-scale electricity storage amplifi es the eff ects of wind’s variability and lack of correlation with peak demand.

Without adequate wind-power storage, wind-generating units must be backed up by units that generate electricity from conventional sources. In Texas’ case, that means natural gas, a fuel source with extreme price volatility. Thus, wind energy is an inherently less valuable resource than fuel sources requiring no backup.

Another major issue surrounding wind-energy development is electric transmission capacity. More specifically, the infrastructure does not exist to move electricity from the areas of Texas most suitable for wind energy generation— West Texas and the Panhandle—to the state’s metropolitan centers. Texas’ electric customers should be particularly concerned, as they will foot the bill for these new transmission lines.

The distinction between wind and wind energy is critical. The wind itself is free, but wind energy is anything but. Cost estimates for wind-energy generation typically include only turbine construction and maintenance. Left out are many of wind energy’s costs—transmission, grid connection and management, and backup generation—that ultimately will be borne by Texas’ electric ratepayers.

Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $4 billion per year and at least $60 billion through 2025. Wind, like every other energy resource, has its pros and cons, and there is no doubt that wind power should be part of Texas’ energy supply. Texas needs a variety of fuel sources, plus concerted eff orts at conservation and effi ciency, in order to meet its energy needs. However, wind energy should only be employed to the extent it passes economic cost-benefi t muster.

Instead of subsidizing private wind development and imposing billions of dollars in new transmission costs upon retail electric customers, Texas policymakers should step back and allow the energy marketplace to bring wind power online when the market is ready. Texas electricity consumers will reap the benefits of such a prudent path.

See the full report here.

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