TXU Subsidiary, Shell Join Forces for 3,000 MW Wind Facility

Shell WindEnergy Inc. and TXU Corp. subsidiary Luminant announced on July 27 a joint development agreement for a 3,000 megawatt (MW) wind project in the Texas Panhandle.

Under the arrangement, the companies also agreed to work together on other renewable energy developments in Texas. Shell Spokesman Tim O’Leary referred to the arrangement as an “agreement to explore the development” of the project. O’ Leary said that construction will probably be “about three years away,” given that the project will require transmission to be built linking the area to load centers.

Last week, the Public Utility Commission of Texas selected eight “competitive renewable energy zones” (CREZs) for the Electric Reliability Council of Texas (ERCOT) territory, directing ERCOT to develop transmission plans for wind capacity in the range of between 10,000 MW and 25,000 MW.

The announcement said Shell and Luminant will also explore the use of compressed air storage, in which excess power could be used to pump air underground for later use in natural gas-fired generation.

A gas turbine operates by burning compressed air and compressed natural gas. Through the compressed-air storage approach, the companies would seek to realize substantial savings by using lower cost wind-generated electricity to compress the air. The compressed air would be injected into gas turbines that generate electricity to meet demand. According to Shell, studies indicate that compressed-air storage may start to be economical for wind projects greater than 2,000 MW in size.

“Luminant is committed to providing Texans with clean sources of energy, and this agreement with Shell is a real next step in delivering on that commitment,” said Mike Childers, CEO of Luminant Development. “Luminant is already the state leader in wind-energy purchases, and co-developing this project would take us a long way toward our goal of doubling our portfolio.”

Recent testimony by Shell before the Public Utility Commission of Texas asserted the Briscoe County project could deliver the lowest-cost wind energy for consumers. That low cost is driven by excellent wind resources and the comparatively lower cost to bring the energy to market from the Texas Panhandle region, Shell said.

“Shell is constantly looking for solutions to deal with climate change and increasing our energy diversity. Wind is part of the answer. Our approach is a cost-effective solution for consumers,” said John Hofmeister, president of Shell Oil Co.

This article first appeared in the July 27th edition of Wind Energy Weekly, the American Wind Energy Association’s weekly newsletter, and was reprinted with permission from AWEA.

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Carl is Editor & Publications Manager at the American Wind Energy Association, where has worked since 2006. At AWEA he oversees AWEA's online and print publications including the Wind Energy Weekly, Windpower Update, and other products. He has worked as a journalist in the energy industry as a staff writer for Public Utilities Fortnightly magazine and in the association sector as senior editor at Association Management magazine. He also has covered the home-building industry, where his areas of greatest interest were sustainable development and "smart growth," and has written articles for numerous other publications as a freelance writer. Carl received his B.A. from James Madison University and spent some time in New Orleans teaching as well as working with homeless youth.

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