The next big Texas energy boom does not involve tight gas formations in the Barnett Shale, or deepwater oil and gas in the Gulf of Mexico. While fossil resources continue to draw high interest from energy developers and investors in the Lone Star State, Texas' hottest energy prospect is wind power in West Texas and the Panhandle.
That's where a new surge of wind farm development, estimated at 7,500 megawatts of new generation over the next three years, should convert once-sleepy places like Amarillo, Plainview and Lubbock into renewable energy boomtowns.
The new wind power surge, while not a surprise to those familiar with the state's immense wind resource, is coming to fruition thanks to the convergence of several factors. They include the expiration of a key federal tax credit that pushed wind energy developers to launch projects by the end of 2013; an economic recovery and projected population growth that should drive electricity demand higher in Texas by midcentury; and, most immediately, the completion of one of the largest transmission expansions ever conceived for the sole purpose of bringing renewable energy to market.
On Jan. 29, the final segment of the $6.8 billion Competitive Renewable Energy Zone transmission project, called CREZ, was placed into service, capping eight years of planning, upgrades and new construction along 3,600 miles of high-voltage transmission lines across a broad swath of central and West Texas.
The new lines broadly link five CREZ zones from Amarillo in the north to the Edwards Plateau in the south with tentacles reaching eastward to Dallas-Fort Worth, Waco, Austin and San Antonio. They will provide the backbone for what could eventually be 16,000 MW of wind power flowing from West Texas' high lonesome country to the state's burgeoning population centers by 2016, according to the Electric Reliability Council of Texas (ERCOT). ERCOT runs the state's largest electricity grid and oversees development along the CREZ lines.
CREZ has also helped solve what experts have called the "chicken and egg problem," whereby insufficient transmission infrastructure dampens interest in building wind farms while at the same time investment in transmission is hampered by a lack of certainty that the new lines will be used.
"While a wind farm can be developed in less than a year, it takes years to undergo the regulatory process, siting, easement acquisition and construction to develop transmission facilities," Robbie Searcy, an ERCOT spokeswoman, said in an email. "The wind developers, in turn, were not willing to commit to projects knowing that the transmission they needed would not be available for five to seven years."
Surge in new wind farm projects
As CREZ neared completion last year, ERCOT officials witnessed an unprecedented surge in new wind farm proposals from West Texas and the Panhandle, where the new lines have opened millions of acres for potential development. Roughly 25,000 MW of wind energy projects are currently under study by the agency, Searcy said, and ERCOT has completed interconnection agreements for 7,500 MW of new wind power.
When all of that new generation comes online in 2016, West Texas should send nearly 16,000 MW of power to the grid, as much wind energy as the current combined output of the next three largest wind-producing states -- California, Iowa and Illinois.
And as other resources -- including those from the Texas coastal zone -- come online, Texas by the end of the decade should be the fifth largest wind energy producer in the world, trailing only China, the United States as a whole, Germany and Spain, according to figures from the World Wind Energy Association.
Beyond bragging rights, the surge in Texas wind power should also improve the state's electric reliability, reduce its dependence on more carbon-intensive electricity fuels and even drive down Texans' electricity prices, which are currently higher than any of their neighboring states in the West South Central Region, according to data from the U.S. Energy Information Administration.
"It's an extremely low-cost source of energy for Texas because wind capacity factors in the northern and western parts of the state are so high," Michael Goggin, a senior energy markets analyst with the American Wind Energy Association, said in a recent interview. "The problem, at least until now, was that all of this energy had been stranded in places where it couldn't reach customers in other parts of the state."
Goggin also noted that Texas' example proves that the United States can tap vastly greater quantities of low-cost clean energy than many believed as recently as a few years ago. And with the emergence of smart grid applications and energy storage technologies, places like Texas could become models for other states and even countries to move toward zero-carbon electricity.
"A big part of the Texas story is that they've become the model for getting the transmission right," Goggin said. "Without those CREZ lines, we could be looking at a very different picture of how the state's energy future plays out."
While the big cities to the east will consume much of the new wind power coming out of the CREZ zones, much of the economic benefit will flow in the reverse direction, back toward the small cities and rural county seats where cattle and tumbleweed outnumber people by a significant margin.
"You could say we've been waiting on this for a good while," Kevin Carter, executive director of the Plainview/Hale County Economic Development Corp., said of the new wind power boom spurred by the completion of the CREZ lines and another large-scale transmission build out by Xcel Energy in the adjacent Southwest Power Pool service territory called "Power for the Plains."
Juice to the east, jobs to the west
Hale County, which lost 2,200 jobs last year when Cargill Inc. closed a beef plant in Plainview, will soon reap the benefits of two new wind power projects accounting for as much as 1,300 MW of generation, according to Carter. One of the new wind farms, Hale Community Energy LLC, will by 2018 move 1,100 MW of power to the West Texas grid, according to its primary developer, Tri Global Energy of Dallas.
Seventy miles north of Plainview, in Amarillo, once declared the "Helium Capital of the World" for its vast deposits of the lighter-than-air gas, the local economic development authority has adopted a new moniker, the "Capital of Wind," to reflect the city's emergence as a hub for both wind power generation and manufacturing.
Among the largest wind energy developers in the Amarillo area is EDF Renewable Energy, the U.S. subsidiary of the French firm EDF Energies Nouvelles. The company owns a half-dozen wind farms in Texas but recently began sinking hundreds of millions of dollars into the Panhandle region as the CREZ lines neared completion.
EDF's largest operating wind farm in Texas, the 161 MW Spinning Spur Wind Project, began generating power in December 2012 and gained fame when Internet giant Google invested $200 million in the project. Its output will soon be joined by two additional wind farms, known as Spinning Spur 2 and Spinning Spur 3, boosting the complex's capacity to 516 MW, according to EDF's website.
Since last November, EDF has acquired two additional Panhandle wind farms, the 200 MW Hereford 1 Wind Project in Deaf Smith County and the Longhorn North Wind Project, also a 200 MW facility, in Floyd and Briscoe counties about 30 miles east of Plainview. Those two projects broke ground in December and are expected to begin sending power to the grid by late 2014 or early 2015.
Pattern Energy, an independent wind energy developer from San Francisco, also broke ground recently on a 182 MW wind farm in Carson County called Panhandle 2 northeast of Amarillo, while Massachusetts-based First Wind announced that it had secured financing for its 150 MW Route 66 Wind Project in Armstrong and Carson counties.
Steve Myers, executive director of the Amarillo-based advocacy group Class 4 Winds & Renewables, said in a telephone interview that some people envision a day when one could drive the 175-mile stretch of Interstate 40 "from the east side to the west side of the Panhandle and have a turbine in site the whole way."