Wind Energy Deployment in Texas and Colorado

Wind Energy Deployment in Texas and Colorado via Transmission Line Development

The United States is heterogeneous in its renewable energy deployment, partially due to federalism, the jurisdictional split of federal and state government over land use. Texas, an energy production leader known for oil and gas production, is also recognized as the wind energy leader in the United States. Texas has over 20,000 MW of installed wind energy. A number of factors, including centralized decision-making, have led to Texas’s success in harnessing wind. But the Texas experiment does not easily translate to other states. Nevertheless, other states like Colorado have similarly increased wind energy deployment, which is approximately 3,000 MW.

In the recent past, wind energy comprised 17% of the energy mix in both states. Texas 2017 Wind Energy Generation Colorado 2016 Electricity Generation In December 2018, Public Services Company (“PSCo”), a wholly-owned subsidiary of Xcel Energy and investor-owned utility serving Colorado, announced that by 2050, its electricity generation is slated to be 100% clean energy, derived from renewables, nuclear, and fossil fuel plants with carbon capture and sequestration. PSCo had previously sought to achieve a 55% renewable energy generation by 2026. To that end, in October 2018, PSCo opened Rush Creek, Colorado’s largest wind farm comprised of 300 turbines, covering 100,000 acres in eastern Colorado and capable of serving 300,000 homes. PSCo built approximately 90 miles of transmission lines from the Rush Creek generation site to a transmission line tie-in, at a cost of $120M. Rush Creek’s wind energy costs $0.03kWh. In short, wind energy deployment in Colorado is proceeding at a frenetic pace, driven in part by the rapidly declining costs. This increased deployment is notwithstanding Colorado’s seemingly decentralized transmission policies which potentially hamper development of interconnections to wind energy development, in comparison to Texas, for example. This dissonance is the focus of this article which compares the success of Texas and Colorado using a socio-political framework, the SPEED framework for energy deployment.

Background of Transmission Lines

The places where the wind blows can be distant from the load, the population centers where energy is needed. Unlike coal or other sources of energy that can be transported to a central location outside a city, wind energy must be harnessed and transported via transmission lines. The wind maps for Texas and Colorado are provided below, illustrating that high wind zones are geographically far from the population centers. Texas Annual Average Wind Speed at 80 meters from ground Colorado Annual Average Wind Speed at 80 meters from ground Although not directly addressed herein, wind resources are unequally distributed throughout the United States, such that wind energy could be transported interstate from areas of high wind to high load. The inclusion of “dispatchable” wind may address the intermittent nature of wind diversifying and interconnecting various wind sources.

Legacy transmission systems cannot accommodate renewable energy. Seventy percent of electric transmission lines in the US are over 25 years old and were built to connect state load centers to major state generation, not to transport long-haul wind energy. New transmission lines need to be built and old ones refurbished. But it can be difficult to build transmission lines that take seven to ten years at a cost of approximately $1M/mile without some guarantee that a generation source (i.e. a wind farm) will support that transmission. This situation has been described as the “chicken and egg problem” of wind energy transmission: Wind generation can be built very quickly, but transmission lines take significantly longer to obtain permits and be built. Developers and project financiers are unwilling to build projects when there is not adequate transmission of the risk that the energy generated cannot be transported to places that need it. However, new transmission cannot be built unless there is a proven need, and that need does not arise until interconnection agreements are signed, security is posted, and wind farms are built.

Thus, we have a chicken and egg problem because the developers cannot build wind farms without transmission, and the utilities cannot build transmission without wind farms. The construction of new transmission capacity for wind power is complicated by jurisdictional overlap. Electric power sector regulation predominantly takes place at the state level, with little authority at the federal level to adopt a national transmission policy. States have authority to overrule any transmission line siting, leading to the lack of a coordinated central planning authority. State regulators historically have taken into account only state-specific costs and benefits of transmission lines in their permitting procedures, and have little capability to consider costs for high-voltage interstate transmission lines. The veto power of states in cross-state transmission planning and concerns over cost-allocation together hamper regional development.

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