Texas might not be the first state you think of for best practices in government planning. But it turns out Texas wind development success is due in great part to excellent planning by the state regulatory bodies, and not just a bunch of wild cowboys simply popping up turbines for the heck of it.
Texas leads the nation in wind power, with the equivalent of entirely powering five million homes from wind. When Texas first began developing its wind resource, it became apparent to both industry and its regulatory bodies such as the Electric Reliability Council of Texas (ERCOT) — which operates the electric grid and manages its market — that the best wind resources were far from load centers. The best wind regions were not connected to high voltage transmission lines.
Wind developers faced the risk that if they built a farm where the best wind was, in West Texas, that it could take several years before the transmission was connected to their project, because of the long distance between them and the load centers in the big cities in the East and on the Gulf Coast, and because of how ERCOT decision making worked back then.
“Which would come first, the transmission or the wind? Both were kind of waiting for the other,” is how Warren Lasher, ERCOT Director of System Planning described it in a recent interview.
Formerly, ERCOT would only sign a contract for the transmission with a wind developer, once its wind farm was very near completion. At that point ERCOT put them into the planning models and then began to build their transmission. This could mean several years with no income for a developer after a wind farm was complete. “And wind developers did not want to commit to the projects in advance.”
Good Planning: CREZ
The rather straightforward solution to this chicken and egg type of problem chosen by Texas regulators was to order transmission connected to areas with the greatest wind potential, regardless of whether there were any wind projects ready for connection in that region.
“The state legislature passed a law in 2005: in essence they told the public utility commission to establish zones in the state; Competitive Renewable Energy Zones (CREZ). And once those zones had been established; to order specific transmission improvements there to connect those regions in other parts of ERCOT,” said Lasher.
“And the key point here was the legislature said that once you approve those transmission units; they can be built in advance of the generation actually signing these contracts for transmission level service. The way it was put into the parlance of the legal document was the need for the transmission assets did not need to be established; the need was established through the CREZ hearing itself.”
ERCOT based the transmission plan for the CREZ on specific input from wind developers at the time the plan was developed back in 2007 and 2008. Fast forward to 2013, and these new CREZ transmission lines have just been put in service, and the potential for new wind is beginning to be realized.
The Wind Potential
ERCOT Manager of Transmission Planning, Jeff Bellow told Renewable Energy World that the CREZ plan was originally designed to support 18,500 MW of wind. “And at the time it was developed, we already had 6,900 MW of wind in West Texas,” he said. “And so it was designed to support approximately 11,500 MW of additional wind capacity. Since then we now have 11,000 MW of wind on the system, so we've already developed some of the wind utilizing those CREZ circuits.”
Bellow said that ERCOT’s initial studies showed that there was upwards of 100 GW of potentially viable wind resources in Texas — more than enough to meet the 68-GW need in the state. CREZ has been successful in greatly expanding the reach of the wind resource in West Texas.
“There is new transmission in every region of Texas that is producing power and wind energy is now in construction throughout the state,” said Greg Wortham, Executive Director of the Texas Wind Energy Clearing house.
“It's in the traditional wind regions of West Texas and it's certainly heavy in the Panhandle.”
Fossil Energy-driven Demand
And now, an oil and gas boom in the Permian Basin is contributing new demand on the West Texas grid. While demand growth in Texas overall is growing at 2 to 3 percent a year, in the fossil energy-rich Permian Basin, it is now rising at 5 to 6 percent yearly, due to the additional need for electric power to supply oil and gas drilling. This increased demand extends throughout the Permian Basin and surrounding areas.
“As the shale plays moved into Pecos County now we're starting to see our oil production and oil exploration go up right now,” said May.“It's moving down here really rapidly. We are seeing expansion in drilling in Pecos County.”
Texas is also just beginning to add solar to its CREZ grid, but there is plenty of wind alone to supply needs in the region.
“Originally, the CREZ plan constructed a bunch of new highways for power to flow into the cities; Dallas and Austin,” Bellow pointed out. “Now the the oil and gas demand in West Texas has grown quite a bit. In building these “highways” we’ve been able to create some off-ramps to solve local congested areas to meet more of the local demand that they are having in West Texas from oil and gas.”
But Why Texas?
So, how was Texas able to do for its wind resource what other states with stranded wind have not been able to? Partly, it is due to the fact that Texas has both supply and demand within the state’s own borders.
“Nearly all the renewables that we produce here go back to the big buyers, San Antonio, Austin, Dallas, Fort Worth,” said Doug May Fort Stockton Economic Development Corporation Executive Director. “They’re Eastern, that's where most of the demand is.”
Add in the new demand from the oil boom in the Permian Basin, and that has increased overall demand.
“There were multiple plans that were put together, based on different scenarios that the public utility commission developed,” said Bellow. “When those plans were put together, the oil and gas industry load hadn’t changed in several years and so we were not including increased load usage when we developed those plans. But our understanding of those loads has changed in the last few years.”
Texas Has an “Islanded” Grid
Combine this supply and, now increasing, oil-driven demand within the same state, and add in a historically closed loop of a grid that essentially has “islanded” Texas, and you have the recipe for good planning, when compared to the stranded wind resources in other states.
“We are isolated from the rest of the country. All of the electron flows, all of the power flows stay within the state,” said Lasher. “Within it, there is both high supply potential and high load demand within the state border.”
“But in some of the other regions; you have significant wind assets in one state, but significant load centers might be several states away, so you essentially have three different parties,” he explained. “The states in the middle really just get the transmission lines. And they may not want those transmission lines cutting across land which could be used for other purposes.”
As a result, for most stranded wind in the U.S., state level regulatory bodies in three or more different states must all agree to work together to get that wind from isolated wind farms in one state to load centers in another. And all these parties have very different potential gains or losses from that cooperation.
For this reason, we are unlikely to see the same bureaucratic excellence in other wind regulatory regimes nationally.