Rick Perry and the “Texas Approach” to Renewable Energy and Infrastructure

January 17, 2017 | 2:41 pm
Wind blowing in Plains states, pre-dawn April. Courtesy: hint.fm/wind
Mike Jacobs
Senior Energy Analyst

Rick Perry—Trump’s pick for the Department of Energy—saw how infrastructure can impact energy development when he was governor of Texas.

Texas has a history of success producing energy. Two keys to this success have been infrastructure and markets, which served to make Texas the leading state for wind energy development.

Every energy supply needs infrastructure. Texas has always had a “pro-competition” approach to ensure adequate infrastructure so new electric energy supplies could compete in the market. The approach played out big for windpower, at the direction of the Texas legislature.  In 2005, the legislature set out a framework for “competitive renewable energy zones” designed to provide infrastructure for increased renewable energy expansion.

How does this work?

The process worked this way: First, estimates were made of energy production, costs and benefits. Then Texas required commitments of private development interest. At the time, renewable energy in Texas weighed in at 3,000 MW. (A single nuclear plant is about 1,000 MW.) Today, Texas has 18,000 MW of wind and 5,000 MW under construction. The infrastructure made all the difference.

How well does this work?

Texas has 3x more wind energy production than the next most successful state, Iowa. This is in large part thanks to transmission, which is as necessary for windfarms as a road to market is needed for any farm produce.

So, the “Texas approach” could be a great model for the United States more generally. In fact, a collaboration of utilities has described a transmission plan for the eastern United States.

And what about gas pipelines?

Gas fields don’t deliver gas to markets. Gas pipelines are needed for that, too. When the gas industry started to expand in the US with fractured shale developments, they put out a forecast of pipeline expenses that would be needed. The cost for the gas infrastructure in their plans was much more than what has been described as the transmission expansion cost needed for wind.

The numbers look like a 10-fold increase in renewable energy would require less money for transmission than the cost of pipelines for a doubling of natural gas use.

Energy development is something Texas understands. The electric companies are not required to keeping buying more windpower, but they do. The old power plants are not shielded from competition, so when the cost of electricity from wind can beat coal or natural gas, the electric companies buy what is less expensive. Now that solar panel prices have fallen so much, the grid operator in Texas is predicting that solar farms will be built much, much more quickly than new natural gas-burning power plants.

These are the lessons of Texas infrastructure during the Rick Perry years. Now, will Rick Perry bring this approach to the Department of Energy and make transmission a priority?