CREZ: Bringing Wires to Wind

Texas, a treasure trove for wind energy, has installed by far more wind power capacity than any other state in the US. Texas currently boasts more than twice the capacity as its next-closest neighbor, California, on the wind rankings. However, a lack of transmission wires has bottlenecked this potential, preventing wind energy delivery from the remote areas in West Texas to the rest of Texas, particularly for big cities like Houston, Dallas, and Austin.


Figure 1. Texas Wind Map 

Presently, less than 1% of the high-capacity transmission lines in the US serve areas with the highest wind power capacity. Historically, when transmission lines were built, the high-capacity transmission wires were made to serve one large power plant in one densely populated region. This old model left smaller transmission lines to be constructed in less populated rural regions, exactly where the most robust wind resources are found. 


Figure 2. US Wind Capacity Statistics

So exactly how bad is the wind energy bottleneck in Texas?

Currently, only one major transmission line connects the wind-rich west Texas to the big cities. This one line has created a huge bottleneck because most wind turbines can’t pump power into the grid when the wind blows the hardest, which is usually at night. Many of these turbines receive a “negative price” on the market thanks to the controversial federal Production Tax Credit (PTC) which provides $.022/kWh subsidies to wind production (which received a one-year extension to the relief of wind developers everywhere). The PTC enables wind farms to pay the power companies to take their wind power, since they still receive a net profit through the federal tax credit. This leaves many of the other wind farms on hold, wasting wind energy, until more lines are built that can take their capacity. 

Texas is taking great strides towards relieving this bottleneck thanks to a new transmission line project, Competitive Renewable Energy Zones (CREZ), expected for completion by the end of this year, and thanks to the extension of the federal production tax credit (PTC) for renewable energy sources. CREZ is Texas’ four-year-old $5 billion plan for building an extensive transmission network to support the development and relieve the bottleneck of wind farms in West Texas. Renewable energy advocates in the US have hailed Texas as the new leader in wind energy thanks to the development of the CREZ model. Authorized by the Texas’ Public Utility Commission in 2008, CREZ is scheduled for completion by the end of 2013. 


Figure 3. CREZ Transmission Lines

Upon completion, an addition of 3,500 miles of new transmission lines that will carry up to 18,456 MW will be added to the Texas transmission network. It is rumored that once this project is complete, PUC is already looking to create even more wind power transmission lines but by collaborating with out-of-state party markets.

However, like all large-scale development projects, CREZ has received a considerable amount of opposition. A huge backlash against the power lines have emerged against CREZ from Texans that fear for their backyards and the Greenbelt. This opposition has spread from Hill Country, where it was ignited, to other parts of Texas, and has resulted in the applications of a number of other CREZ power line alternative routes that involves long hearings to determine where exactly the lines will be constructed.

The Texas CREZ system has become the inspiration for a number of similar transmission line projects around the country, including in New Mexico and California. But as is often told, Texas is different from all the other states and has an inherent advantage: it’s own separate power grid. While all the other states are tied to either the east of west electricity grid, Texas enjoys the independence from many regulatory constraints that allows it grow with more freedom. 




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3 responses to “CREZ: Bringing Wires to Wind

  1. jbeceiro

    Great overview on the Texas wind industry and the CREZ policies that have enabled large scale wind development in the state. With the current $5 billion, 18.5GW expansion of CREZ coming to a completion, I would be interested in learning if future CREZ expansion projects will focus instead on bringing Texas’ immense coastal wind resource into the ERCOT grid. An Austin-based company called Baryonyx recently was approved for a DOE grant to deploy the first offshore wind turbines in Texas [1]. Baryonyx will develop a 3-turbine, 18MW project off the Texas Gulf Coast to demonstrate the feasibility of offshore wind and to also evaluate how to drive down costs associated with offshore wind development. The primary benefits of developing offshore wind in Texas are that it aligns with peak energy demand, it’s closer to load centers than West Texas wind, and the offshore wind resource is more robust than West Texas wind. Higher construction costs are associated with offshore wind development. However, the ability to manufacture the turbines on the Texas Gulf Coast and barge the turbines out to the nearby offshore construction site is a major advantage. Also, offshore wind turbines can be scaled larger than onshore turbines up to 5MW-10MW, which further improves the overall economics of offshore wind. Offshore wind could be a major driver of new growth in the Texas wind economy and could also better assist ERCOT with addressing the state’s peak demand challenges.


    [1] Baryonyx Corporation invited to negotiate contract with U.S.
    Department of Energy for Gulf of Mexico Offshore Wind
    Demonstration Project;

  2. justindukealtman

    I am surprised to learn that with the surge in new wind power installation in Texas, we are experiencing a bottle necking of the transmission of electricity to the larger cities in the state. According to the American Wind Energy Association (AWEA), Texas currently has the capacity for 10,900 MW of power production. In 2012, Texas added an additional 535 MW of capacity to its wind power grid, with an additional 1,291 MW of capacity under construction, and an additional 22,239 MW of capacity with projects “in queue” (AWEA, 2012). It seems that there should be more infrastructure in place, or planned on being installed, for there to be new capacity added to the current wind power system. According to ReporterNews, the Texas wind industry recently set a record for generating the largest percentage of the state’s energy needs. On February 9th, 2012, 28% of the state’s electrical needs (9,481 MW) came from wind power generated in West Texas. According to the same article, ERCOT managed and matched the distribution of this power across “40,500 miles of transmission lines.” The current infrastructure can obviously manage the most extreme cases for electricity generation by wind farms. However, with the proposed expansion of the wind power industry in Texas, the capacity of the current transmission lines may not be sufficient to distribute electricity.


  3. With the addition of new transmission lines under CREZ, Texas will more than double its current capacity [1]. But how will the market absorb so much new generation that is, as you noted, generally produced at night when the wind is most active? Indeed, the doubling of capacity will also place more pressures on wind electricity prices causing them to go negative more often and potentially hurting the industry. It is surprising that there has been so little focus on how to store wind energy so that it can be deployed when there is demand. Compressed air energy storage (CAES) has the potential to store wind energy on a large scale at a low cost. It works by compressing air in underground storage structures such as salt caverns through mechanical compression using an energy source such as wind. CAES is a mature technology that has been in use since 1991 and a new CAES facility is currently in development in Tulia, TX (Northwest Texas) that could provide up to 100 hours of storage and 270 MW of power [2]. There are many benefits of CAES to both the electricity market and to wind producers. CAES provides a dispatchable energy storage system that allows utilities to store energy from baseload electricity at off-peak prices and to produce energy during peak demand at peak prices. In turn, this would produce a greater demand for off-peak wind energy, thereby increasing the price to wind generators.


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