The Wind Market in Texas, Pt. II – Georgetown International Environmental Law Review

JoshuaEbersoleTitleCardPt2

The Wind Market in Texas, Part II

By Joshua Ebersole, Staff Contributor

Texas, the largest producer of wind energy in the United States, has over 12,750 megawatts of total wind power capacity installed.[1] An additional 7,000 megawatts of capacity is expected to come online by the end of 2015, and approximately 26,000 megawatts of potential wind power capacity are under study.[2] In this two-part installment piece, GIELR Online explores the recent success and future viability of the Texas wind market. Part I described seven factors that have enabled Texas to become the largest producer of wind energy in the United States. Part II discusses long-term considerations for further expansion of Texas’ wind industry.

In contemplation of the seven factors discussed in Part I, short-term investment in the Texas wind market is a good opportunity and funding is recommended. The lack of a relevant RPS in Texas has not harmed the market because wind is a viable and economical energy source with current incentives in place.

“The lack of a relevant RPS in Texas has not harmed the market because wind is a viable and economical energy source with current incentives in place.”

The long-term outlook for the Texas wind market and the market at large is uncertain; subsidies to the industry are being questioned,[3] and the fossil fuel industry is fighting back.[4] A major variable is whether the federal wind generation tax credit will continue to be renewed.[5] The industry claims it needs the tax credit to compete with other forms of energy, while opponents view the tax credits as corporate welfare to an established sector.[6]

At present, the Public Utility Commission of Texas is studying whether the wind power generators should pay some of the $7 billion transmission cost that are currently being passed on to consumers in the State.[7] Many in the Texas wind industry claim that if they would be required to pickup the costs, Texas will recede to the back of the pack in wind energy.[8] Adding to the issue, more of the costly transmissions lines are likely to be needed if the industry is to continue to grow.[9] The Public Utility Commission says that the renewable energy transmission lines will soon need a $675 million upgrade to meet the new wind capacity coming on line.[10]

“Many in the Texas wind industry claim that if they would be required to pickup the costs, Texas will recede to the back of the pack in wind energy.”

Thus, unsurprisingly, money and the assignment of financial obligations will play important roles in shaping the future of the Texas wind market.

GIELR LOGO SMALL


[1] American Wind Energy Association, U.S. Wind Industry Second Quarter 2014 Market Report, at 5, Jul. 31, 2014, available at http://awea.files.cms-plus.com/FileDownloads/pdfs/2Q2014%20AWEA%20Market%20Report%20Public%20Version%20.pdf.
[2] Bobby Magill, Wind Power Production Record Broken in Texas, Scientific American, Jul. 26, 2014, http://www.scientificamerican.com/article/wind-power-production-record-broken-in-texas/.
[3] Loren Steffy, Is Texas Souring on Wind Power?, Forbes, Jul. 11, 2014, http://www.forbes.com/sites/lorensteffy/2014/07/11/is-texas-souring-on-wind-power/.
[4] Mose Buchele, As Renewables Grow in Texas, Battles Over Fees and Subsidies Emerge, State Impact, National Public Radio, Jun. 25, 2014, http://stateimpact.npr.org/texas/2014/06/25/as-renewables-grow-in-texas-battles-over-fees-and-subsidies-emerge/
[5] Id; see also Wind Collapses Without Federal Tax Credit, Real Clear Energy, Jul. 9, 2014, http://www.realclearenergy.org/charticles/2014/07/09/wind_collapses_without_tax_credit_107878.html.
[6] Id.
[7] Ryan Holeywell, Study Will Assess Shifting Transmission Costs to Wind Generators, Houston Chronicle, Jul. 8, 2014, http://www.houstonchronicle.com/business/energy/article/Study-will-assess-shifting-transmission-costs-to-5607745.php?cmpid=email-premium&t=0906f5d2df81750c0d.
[8] Id.
[9] Id.
[10] Id.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s