HOUSTON — The cost of new transmission lines built to carry wind power across Texas may come back to haunt ratepayers across the state, while their importance to the grid has diminished, an expert on Texas wind power said Thursday at a luncheon sponsored by the Gulf Coast Power Association.
These transmission lines, called the Competitive Renewable Energy Zone, are a network of new power lines being built to carry West Texas wind power to Austin and the Dallas-Forth Worth area.
“The amount of money going into CREZ lines is staggering,” said Kate Galbraith, a journalist and author of “The Great Texas Wind Rush”.
Galbraith said that the original $5 billion budget for the transmission lines has grown to more than $6 billion, because of land acquisition and other costs.
“That’s 300 dollars for every Texan,” Galbraith said. “It’s 30 percent more than the 5.4 billion in public education cuts that the legislature has been squabbling about since they introduced them in 2011.”
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When Gov. Rick Perry first authorized the construction of $5 billion of transmission lines to link West Texas wind farms to the grid in 2008, there was a remarkably different energy environment in Texas. Since then, dramatic growth in oil and gas drilling West Texas has both increased the demand for power in the area and — because of the new abundance of low-priced natural gas — has made the demand for wind power drop, Galbraith noted.
Further reductions in wind power could come from the possible end of the federal wind production tax credit, which the wind industry has relied on to help make wind energy financially viable, Galbraith said. The tax break, due to expire at the end of December, gives wind developers 2.2 cents for every kilowatt-hour of energy produced.
In Texas, the arrival of low-priced natural gas and Tea Party politics has lessened interest in subsidizing wind power.
“The conversation is that Texas is an ‘all of the above’ state with grave concerns about subsidies,” Galbraith said.
The end of the production tax credit could mean that there will not be enough wind power for the transmission capacity of the CREZ lines, leaving gird planners and generators looking for other options.
“If the production tax credits expire, will the CREZ lines be filled?” Galbraith asked. “Will they be filled with wind power, or with natural gas power, or will they become lines to nowhere? We will see.”
However, wind energy in West Texas may benefit from the effect that the drought has had on gas-fired plants, which require significant amounts of water for cooling.
“There is going to be a tough time in getting power plants gas built in parts of west Texas,” Galbraith said. “This will be much more of a talking point around wind going forward.”