Posted by
John Askins

Federal Tax Credit Gives Texas Aternative Energy Industry A Strong Tailwind

Last December, Congress, while stopping short of the fiscal cliff, also included a tax package that included the renewal of the tax credit that rewards developers of wind turbines.

The renewal of the federal production tax credit has now smoothed the way for further development.  And the State of Texas stands to be a big winner in that industry.

During the same week that legislation was passed, Texas contributed to a new wind power record, at one point providing about 26 percent of the electricity on the state’s grid.

The power registered from the turbines was 8,638 megawatts, or enough to power just over 4.3 million homes.

Presently, Austin Energy gets 851 megawatts of power from wind, bringing renewable energy to 27 percent of its overall supply. Its goal is to get 35 percent of its energy from renewable sources by 2020. Citing competitive concerns, the utility declined to say how much it currently pays for wind energy.

Companies are investing in wind, too. Google announced in January that it had invested $200 million in a Panhandle wind farm called Spinning Spur.

“We believe that government incentives like the production tax credit play an important role in fostering private investment in clean energy, in order to transform our economy over the long-term and achieve energy independence,” said Kojo Ako-Asare, a member of the Google corporate finance team that worked on the wind project.

The Electric Reliability Council of Texas, or ERCOT, the operator of the state electric grid, oversees more than 10,000 megawatts of wind power capacity, most of it in West Texas.

One megawatt is enough electricity to power about 500 homes during periods of typical consumption.

High-voltage power lines — unpopular among those living nearby — stretch across vast swathes of Texas to connect far-flung wind farms with cities where the electricity is consumed and should increase that capacity. Those lines
, which cost more than $5 billion, are designed to accommodate a total of 18,500 megawatts of wind generation.

A December report by ERCOT anticipates 1,472 megawatts of new wind power by the end of this year, 1,127 megawatts more by the end of 2014 and an additional 249 megawatts by the end of 2015.

During the height of wind power generation last December, more than 6,600 megawatts hailed from West Texas wind farms, and more than 1,600 megawatts came from turbines along the Texas coast. About 3 a.m. on Jan. 29, the Dec. 25 record was broken when wind power generated 32 percent of power on the grid.

But the wind doesn’t blow consistently.

That's why in January, Duke Energy and Kyle-based Xtreme Power announced a battery storage project near Odessa that’s meant to absorb power from an adjacent wind farm during times of low demand and release it when it is needed on the grid. If successful, the battery project could point the way to a more consistent supply of energy from wind turbines.

In 2012, wind provided 9 percent of the energy used in Texas. Forty-five percent came from natural gas, 34 percent from coal and 12 percent from nuclear. With the new turbines that are forecast, the percentage of wind power could creep up in 2013, as it has every year over the past decade.

“We’re seeing companies choosing projects to go ahead and seeing increased tempo,” said Jeff Clark, executive director for the Wind Coalition, which lobbies on behalf of developers. “People are definitely ramping up, continuing expanding.”

source:  Austin American-Statesman

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