Purchasing and Negotiation Training

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Since Spindletop  in 1901 Texas has been the greatest petroleum producer in the U.S.  According to a story in the Dallas Morning News  Texas now produces more than 3 million barrels of oil a day, double what it produced three years ago and more than all but seven countries in the world. 

But did you know it is a major player in the renewables world?  According to the American Wind Energy Association  (AWEA) as of 10 April 2014, “Texas is the national leader in wind energy – with more installed capacity, more wind turbines and more jobs than any other state. The wind energy industry in Texas has created thousands of jobs and provided billions of dollars in economic benefits.”  See the statistics below taken from the AWEA website. 

With wind as well as solar growing so rapidly in Texas, it would seem that the rodeo is on between the fossil fuel electricity producers and renewable producers. 

Setting the table 

Wind power began ramping up in the 1990s in west Texas.  T. Boone Pickens, of Mesa Petroleum  fame, was the prime mover behind the wind movement.  Boone chose west Texas because of its ample wind supply.  In fact, the wind blows more at night, which creates an oversupply of electricity, which in turn reducing prices by as much as half.  This should create problems for fossil generators. 

Enter the Texas Public Utility Commission.  It is considering a proposal to charge wind and solar higher fees because renewables are inherently variable and in need of greater backup.  Interestingly, two of the state’s largest utilities, Exelon and Luminant have taken the side of renewables in opposing shifting costs to the renewables.   

In a recent report, Texas State Comptroller, Susan Combs questioned a $7 billion project to connect renewable sources in west Texas to the big cities in central, north, and east Texas customers.  She was particularly critical of the federal tax credits benefitting wind farms.  She contends that “It is time for wind to stand on its own two feet.”  The odd imagery aside, the “billions of dollars of tax credits and property tax limitations… helped grow the (wind) industry.  But today, they give it an unfair advantage over other power sources.”

She is right!  

Wind and solar production has doubled in 2014 from 2008 levels, accounting now for 10% of the Texas grid.  Further, large scale solar generation projects are underway in the state which may exceed the capacity of California.  The cost of new transmission lines will ultimately be borne by customers.  Moreover, the competition between fossil and renewables should be market driven, not artificially influenced by government.  We need only look to the billions of losses foolishly wasted by federal forays of folly into solar energy over the past six years.  

Smart investors are much better equipped than bureaucrats to manage our energy future.

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Wind Projects in Texas

• Installed Wind Capacity: 12,755 MW. Ranks 1st for total MW installed.
• Number of Wind Turbines: 7,986 turbines. Ranks 2nd for number of utility-scale wind turbines.
• Wind Projects Online: 117: Texas is home to 6 of the 10 largest wind farms in the U.S.
• Wind Capacity Added in 2013: 141.1 MW
• Wind Capacity Added in 2012: 1825.9 MW  Ranks 1st for 2012 installations.
• Wind Capacity Under Construction at end of 2013: over 7,000 MW Current Wind Generation

• Percentage of Texas’ electricity provided by wind in 2013: 8.3 percent. On ERCOT, the main Texas grid, wind energy provided 9.9% of 2013 electricity.
• Equivalent number of homes Texas wind farms now power: over 3.3 million average American homes.
• On May 2, 2013 wind generation hit a record 9,674 MW or 28% of ERCOT’s load. Wind Generation Potential

• According to data from the National Renewable Energy Laboratory, Texas’ onshore wind potential at 80 meters hub height is 1,901,530 MW. Texas has the best wind resource in the U.S.
• This means that wind power is capable of meeting more than 18 times the state’s current electricity needs. Jobs & Economic Benefits

  An investment in wind power is an investment in jobs, including jobs in operations and maintenance, construction, manufacturing, and many other support sectors. In addition, wind power projects produce lease payments for landowners and increase the tax base of communities.

• Total direct and indirect jobs support in 2013: 8,001-9,000. State Rank: Texas ranks 1st for number of wind-related jobs.
• Capital investment: approximately $23.2 billion have been invested in Texas wind projects.
• Annual land lease payments: over $38 million. Wind-Related Manufacturing

  The wind industry has over 550 manufacturing facilities producing products for the wind industry that range from blade, tower and turbine nacelle assembly facilities to raw component suppliers including fiberglass and steel.

• Number of manufacturing facilities in Texas: 45 facilities.
• The state is home to turbine manufacturers DeWind and Alstom, blade manufacturer Molded Fiber Glass and several tower manufactures in addition to numerous component suppliers. Environmental Benefits of Wind Power

  Generating wind power creates no emissions and uses virtually no water.

• The water consumption savings from wind projects in Texas total more than 7.8 billion gallons of water a year
• The wind power installed in Texas will avoid 23,103,000 million metric tons of carbon dioxide emissions a year, the equivalent of taking 4,075,000 cars off the road. State Policy 

  Texas established a renewable portfolio standard (RPS) in 1999 and it was amended in 2005. The current RPS provisions require 5,880 MW of renewable energy by 2015. The state also has a target of reaching 10,000 MW of renewable capacity by 2025, a target that the wind energy industry met in 2010.

  SOURCE: AWEA website