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West Texas: The Future of Texas Energy Resilience

Investments in transmission lines from wind-producing regions bring options, savings, and reliability to consumers.

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Editor’s note: this is a contributed op-ed. 

We West Texans know about oil markets. Their boom and bust cycles have forged our resilient West Texas spirit. In recent times, however, we have also come to know renewables, as corporations have made large wind and solar investments in the area. The U.N. Paris climate accord, which seeks to decrease emissions from coal, natural gas, and oil-burning plants, has played a role in incentivizing the energy transition from carbon-emitting sources to cleaner, renewable options. Solar prices have fallen down 60 percent since 2008, and wind has dropped 40 percent, which allows utility companies to purchase cheaper energy and lower rates for ratepayers.

Catastrophic storms with record rainfall like Hurricane Harvey have drastically affected the housing market, the electric grid, and the way insurance companies approach and assess risk. Hurricane Harvey was a huge wake-up call for many young economists who now see the importance of incorporating climate risks with economic ones

Last year, Jeff Bezos found an opportunity to get ahead of an uncertain energy market and bolster his renewable energy portfolio while preparing for the economic risks of climate change. He signed a multiyear contract to give Amazon electric power generated by the winds blowing over Scurry County. Amazon benefits from the certainty of cheap clean energy, and Texans will benefit from the investment and direct payments to landowners over the lifetime of the project. Lincoln Clean Energy (LCE), a leader in wind and solar across the United States, constructed, owns, and operates Amazon Wind Farm Texas. LCE committed 100 percent of the funds for the project, and Amazon will purchase 90 percent of the power generated.

The Scurry County wind farm is Amazon’s largest renewable energy investment to date at 253 MW. Amazon has also pledged to give $50,000 to schools in Snyder for STEM education, which could spark more investments throughout the region. LCE has acquired the Willow Springs Wind Farm in Haskell County, which adds another 250 MW of power to the West Texas region. That is 503 MW of power currently being generated by LCE. The organization has seized the entrepreneurial opportunity of West Texas’s bountiful wind market and also recognized the power in marketing to companies like Amazon (wind energy can offset large carbon footprints from, for example, large data centers that eat up a lot of power). By marketing to large corporations (which eat up more power than smaller companies), LCE can help facilitate renewable energy transitions and carbon offsets by providing a renewable alternative.

The Texas Public Utility Commission laid the groundwork for such investments when it set up competitive renewable energy zones (CREZ) power lines that transfer renewable electricity from energy-producing regions to energy-consuming regions. Construction on the lines was completed in January 2014. Barry Smitherman, the former chairman of the Public Utility Commission of Texas, told us: “Amazon, like all wind developers in Texas, benefits from the investment Texas ratepayers have made in the CREZ transmission project. Without adequate transmission, West Texas and the Panhandle wind doesn’t get to Dallas, San Antonio, or Houston.”

Because of the transmission lines, Smitherman said, Texas electric consumers have a portfolio of renewable, nuclear, and fossil energy, and pay the lowest power prices in America. He added that according to the Energy Information Administration, “CO2 emissions in Texas are below year 2000 levels on both an absolute basis and a per capita basis.” The foresight of installing transmission lines from the places that generate more energy to the larger cities like Houston can help to offset energy shortages (such as ones caused by mega storms) and sustain the Texas economy for years to come.

The need for diversifying of our energy resources can be seen even clearer in a post-Harvey Houston. Relying heavily on Houston’s oil and gas industry to provide an economic backbone isn’t healthy in the the long run for Texans. The Houston area accounts for billions of dollars’ worth of the Texas GDP, and Harvey’s economic impact has already been felt across Texas.

What Houston needs now is time. Time to assess Harvey-related damages and rebuild the city—while keeping in mind future disaster prevention. The infrastructure provided by the CREZ lines allows citizens the opportunity to opt for more clean energy. Most Texans can purchase energy provider plans that power their homes with a specific type of renewable energy. CREZ gives the people of Texas choices in their power, a choice to make a difference in the future. West Texas can make a difference in this field. West Texas stands to gain jobs and even more economic growth to follow as more and more companies decide to take advantage of the CREZ lines. With Lubbock Power and Light submitting their application for them to join the ERCOT grid, ratepayers could soon determine if Lubbock will be powered with clean energy, which sets a great example for Texas and will lower energy prices for ratepayers. Future innovation and even further economic prosperity isn’t far away for West Texas.

Despite the uncertainty of the oil market and the losses incurred by storms like Harvey, wind energy in West Texas has fueled a reliable energy niche. It has also expanded the statewide energy portfolio, with wind supplying 23 percent of the energy to the grid in the first quarter of 2017. This resulted in Texas leading the nation in wind energy with a capacity of over 20,000 megawatts (MW). The 2 MW Vestas V80, one of the most common wind turbines, offsets 93,000 tons of CO2 in its 20 year lifespan as compared to a coal-fired power plant . This free-market solution to energy woes and climate risks gives hope to Texans.

Chris Pattison, of the National Wind Institute (NWI) at Texas Tech University, said, “Of the total capacity available for renewable energy on the CREZ lines, 20 percent is set aside for solar projects. Wind developers want to take advantage of this load, but the agreement is for solar projects, so 20 percent of a potentially booming energy market is not being used.” Given that West Texas is ripe with the sun and wind (having an average of 263 sunny days a year), in the coming years when LP&L connects to the CREZ lines, West Texas citizens will have an untapped market to take advantage of, as well as, save money on their electric bills. There is even talk of expanding the National Wind Institute to include solar installation projects, which require less training than than wind-engineering jobs. Pattison continued: “when the ERCOT grid connects to Lubbock Power and Light around 2020, Lubbock will instantaneously become 100 percent green because most of the energy on the CREZ lines is from wind.”

There are more effective ways to work on climate change than environmental-regulation schemes—choosing renewables can make an enormous positive economic impact. If states like Texas can offset carbon emissions by investing in places like West Texas, which is abundant in sunlight and wind, then Texas will continue to lead in renewables.

Casey Williams is a Ph.D. candidate in educational psychology. He has been volunteering for Citizens’ Climate Lobby for about a year. He has also been involved with the National Wind Institute and Climate Science Center at Texas Tech University. He is an energy optimist and seeks to find what people have in common, rather than what divides them.

Carson T. Bonner is a native Houstonian majoring in economics at Texas Tech University. He has been heavily involved in political campaigns at the state and federal level, while also spending time working with NGOs in Washington, D.C. He hopes to continue promoting the economic benefits of clean energy solutions while strengthening local economies. 

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  • bobbyv

    This is America at it’s best, providing local, infinite and clean energy, and leading the world in new technology.

    • Casey Williams

      Thank you! Market-based solutions are at our fingertips, will we take advantage of them?

  • Scot Arey

    Well said! Too many fellow Texans do not realize that not only have our past CREZ investments blessed us with the most envied wind-portfolio in the U.S. and undoubtedly cleaner air, but it has also been important for lowering our electricity prices to the levels they are today. The CREZ lines that are used by night for West Texas wind will soon be used during the day for equally abundant West Texas sunshine!

    Scot Arey
    Past chair, Texas Solar Energy Society

    • Jennifer

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    • Casey Williams

      Thank you Scot! Now we just need to incentivize solar installation projects out here in West Texas. Let me know if you would like to help (or be interviewed) on another article Carson and I are writing about how to maximize the economic growth of this budding industry.

      • Scot Arey

        Count me in – the potential of Texans gaining / keeping / spending-here-at-home their 30% Federal tax credits could be powerful. $ kept in Texas instead of the IRS in Washington = huge propensity for spending in our hometowns. Scot, 254-300-1228, [email protected]

  • Paul in Austin

    First, to correct some facts, the percentage of wind power in Texas for the last 12 months available (September 2016 through August 2017 from EIA) is 16%. For ERCOT (November 2016 through October 2017), it was 17%. This is not bad, but it is not the 23% implied in this article.

    Second, Texas does not have the lowest cost electricity in the country. According to EIA, 6 other states had lower aggregate electric rates than Texas in 2016. Again, not bad, but it does not help to exaggerate.

    More importantly, though, the author did not discuss all the reasons for the low cost. They include tax credits for renewables, a glut of natural gas, and a broken wholesale electric market model.

    Let me acknowledge that all current electric fuels are subsidized in one way or another. While wind power receives the production tax credit, there are tax breaks to extract coal and gas, and both these fuels are also indirectly subsidized by socializing the health/environmental costs of their pollution. It is my informed opinion, however, that renewable energy received more direct subsidies than conventional energy in recent years. (See EIA: https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf)

    One can intelligently argue, historically, that this recent favoritism for renewables made up for lack of attention in the past. However, the author is discussing current costs, which are cushioned by current, higher, tax breaks.

    Relatively cheap natural gas, much of which is derived from fracking, provided about 40% of Texas electricity in the last 12 months. Due to a glut, gas is so low in price that the fuel has hijacked the ERCOT wholesale “energy only” market. Dispatchable generation is often bidding into the market without the ability to recoup its full capital costs, and sometimes, probably even part of its operational costs.

    Another problem with the broken market is that it does not value dispatchability. Though no study has been done of ERCOT, it is a rule of thumb that intermittent renewables such as wind and solar cells can only provide about 25% of electricity on an annual basis without economic and/or technical problems.

    If wind and solar continue their historical increases, at some point in the near future, they may hit this threshold. Maybe technical progress will allow the threshold percentage to be pushed upwards slightly, but wind and solar cells will likely never provide the lion’s share of power without storage, which is still expensive.

    Texas environmentalists are overjoyed that several of the state’s coal plants are being retired because of high costs. While I share the sentiment, the same market dynamics from a broken market may work against future dispatchable renewable energy options, or energy storage, if they are more expensive than intermittent power or gas plants that cannot recoup all of their costs.