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Power places - 6. Texas

WORLDWIDE: Each point of the star on Texas's flag represents a personal quality - broad-mindedness is one of them. Texas is traditionally connected with oil, an energy source that, for many on the greener fringes of the wind industry, is the antithesis of clean wind. Yet Texans kept an open mind, and today the state is number one in the US in terms of installed wind power. Indeed, based on the Power Places classification of a sub-national region, the Lone Star State is the number one region in the world in terms of installed capacity, boasting 9.4GW by the end of 2009.

The clean-energy revolution in the land of billionaire oilmen has not happened by accident. Texas was one of the first US states to implement a renewables portfolio standard (RPS) to support wind power. Through the RPS, which was first implemented in 1999, a quota is set for providing electricity from renewable sources, which has to be met by the utilities. The RPS in Texas has been very successful in triggering development. The standard of 5.88GW by 2015 has already been met, and it is expected that the standard will be raised to stimulate market growth further.

As in Iowa, simply being part of centre-left President Barack Obama's United States helps. US-wide measures from the 2009 stimulus package - the American Recovery and Reinvestment Act - had a positive impact on market development. The attractiveness of wind power in Texas is buoyed by the nature of its wider energy market. The expansion in the use of gas in the state has meant that wind power is relatively more competitive than in those states that have an abundance of cheap coal.

Although policy and energy economics help drive the industry here, geography and climate provide the raw materials. Texas has a truly world-class wind resource, particularly in the west of the state in the arid and mountainous Trans-Pecos lands of the Chihuahuan Desert, close to the border with Mexico. Strong and steady winds are also to be found in the extreme north of the state, in an area called the Texas Panhandle, which juts away from the main body of the state towards Oklahoma and New Mexico.

But while areas of vast wilderness are an asset of the state, they also represent a major challenge - mainly regarding transmission of electricity. The vast majority of wind development is taking place in the west of the state, yet electricity needs to be transported to centres of population in the centre-east, namely Houston, Dallas, Austin and San Antonio. Since west Texas's generation capacity exceeds its transmission capacity, reinforcement and expansion of the wires is urgently needed to accommodate the further growth of wind power.

The large installed capacity in Texas and an undersized transmission network have resulted in significant curtailment of wind energy from existing projects. This is a significant risk to development, as it will affect the revenue from new projects for a few years at least.
However, the state has designated five Competitive Renewable Energy Zones (Crez) to streamline future developments and incentivise new transmission. Utilities that build additional transmission capacity in a Crez are eligible to recover construction costs. About $5 billion was allocated to Crez transmission expansion in 2009. Another of the points on the Texan star represents fortitude - when the Lone Star State puts its mind to something, obstacles rarely stay obstacles for long.

Texas, United States

FOR

  • Tax breaks
  • Cost competitiveness
  • Regional government support
  • Excellent wind resource

AGAINST

  • Transmission shortage

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