Texas companies have long been at the forefront of innovative renewable energy resources by harnessing two things that the state has in spades: wind and sun. As Bloomberg reported last month, blustery South Texas is able to sidestep one of the key problems with wind energy—its abundance at night, when electricity rates drop—by capitalizing on midday winds. “For not only does the state’s Gulf Coast generate strong evening gusts, but it also blows fiercely in the middle of the day, just as electricity consumption is peaking,” Ryan Collins wrote for Bloomberg.
But a Texas-based startup might have found the way to utilize that energy even outside of the exceptionally windy parts of the state. Houston’s Apex-CAES, or compressed air energy storage, is raising $500 million to build its first facility in Palestine, according to the Houston Chronicle. The company would use electricity at night, when the rates are cheap, to store compressed wind energy in underground salt caverns, not unlike the storage methods used for natural gas. Apex-CAES would then use the stored energy during peak times, which could make it a player against the spiking day time electricity rates.
As the Chronicle‘s Chris Tomlinson noted, advances in wind energy have long been held back by the price. “The only thing holding back this 30-year-old technology has been the economics,” Tomlinson wrote. “The difference between the high and low prices in a 24-hour period has not been large enough to generate a reasonable return on the capital investment.”
But unique conditions in Texas position companies like Apex-CAES to succeed. Apex-CAES CEO Jack Farley told the Chronicle that the state’s wholesale energy market and plentiful wind resources are the perfect (wind) storm for making wind energy companies viable. “I think you could turn off all fossil-fuel generators in Texas when you wanted to,” Farley told the Chronicle.
But don’t expect wind energy to completely upend low-priced natural gas or electricity services. The Chronicle reported that the real opportunity for energy storage companies lies in ancillary services, or the other sources of energy that help keep the grid balanced out. Those earn a premium from grid operators, including ERCOT, which supplies most of Texas’s energy.
Renewable energy sources have many hurdles in energy-rich states like Texas, but with innovations coming from companies like Apex-CAES, the state could well be on it’s way to fulfilling Bloomberg‘s prophecy that “Texas is too windy and sunny for old energy companies to make money.”