United States

United States

Texas grid leads the way

UNITED STATES: Texas was the first in the US to break through the "chicken and egg" impasse of which comes first, the renewables-generating projects or transmission.

Home advantage… Texas is the only US state with its own grid (pic:Ercot)
Home advantage… Texas is the only US state with its own grid (pic:Ercot)

The country's second most-populous state began development of its wind-friendly transmission projects in 2009. This is one of the largest-ever programmes of its kind and, when finished by the end of this year, the 345kV lines should help deliver about 18GW of wind energy from five competitive renewable energy zones (CREZs) to load centres in the south and east of the state, all within the territory of the Electric Reliability Council of Texas (Ercot), the grid operator for most of Texas.

The projects circumvent the problem of who pays for transmission by allocating costs to consumers across Ercot's territory. Once development costs are verified by the Public Utilities Commission of Texas (PUCT), a process currently under way, they will be passed on to consumers over the next few years. "It's an innovative scheme," says Jim Greer, chief operating officer of Oncor, the main developer of CREZ lines, responsible for 1,600 of roughly 5,000 kilometres to be completed.

The new lines are already alleviating grid congestion and wind-power curtailment. Once complete, the programme is also expected to boost a large amount of wind development in west Texas, says Michael Goggin, transmission manager at the American Wind Energy Association. The exact impact is hard to gauge, but Texas is already the largest wind market in the US, with more than 12.5GW of projects.

In 2005, Texas lawmakers increased the state's renewable energy portfolio standard while also requiring the identification of CREZs where readily exploitable renewables assets had scant transmission availability. The PUCT established a tentative $4.9 billion budget, which has now risen to $6.8 billion.

Show commitment

Developers keen to connect to CREZ lines have had to post either a credit note or collateral, says Terry Hadley, PUCT spokesman. The amount is $15,350 per megawatt of planned project capacity, or $10,000 per megawatt if the developer has a 20-year land lease. Despite reports to the contrary, no cash changes hands, he says. Hadley believes that political opposition to CREZ has been minimal because the costs were seen as relatively fixed, nor was there any more opposition to these routes than to other transmission lines.

With the programme entirely in one state and one grid operating area - Texas is the only state with its own grid - the planning process was simplified. Before the exact routes of Oncor's $2 billion CREZ lines were established, 13,000 landowners were invited to 33 public meetings. Once the routes were established, about 1,500 "impacted" landowners were invited to another 30 meetings, says Oncor's Greer.

Supply chain pressure

Having so many large projects under way simultaneously - all with ambitious timetables - led to supply chain stress, notes Robbie Searcy, spokeswoman for grid operator Ercot. "There was competition for raw materials such as steel," she says.

Partly thanks to CREZ, wind curtailment in Ercot's territory has dropped from a high of 17.1% of potential wind generation in 2009 to 3.5% in 2012, according to the Lawrence Berkeley National Laboratory's Wind Technologies Market Report 2012. The next highest curtailment rate among the other transmission operating regions studied in 2009 was just 2%, for most of the territory of the Midcontinent Independent System Operator (Miso), which covers much of the upper Midwest.

CREZ has inspired other programmes that allocate the cost of wind-friendly transmission throughout a region, say analysts. By 2020, Miso projects could carry 14GW of wind. The CapX2020 projects - a smaller initiative in the upper Midwest - could connect an additional 5GW of wind by the end of 2013. And in the territory of the Southwest Power Pool, the "highway/byway" cost allocation is leading to priority transmission projects that could unlock 3.2GW of wind projects by 2017.

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