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Texas Profits From Boom in Wind Power

February 25, 2008

The wind turbines that recently went up on Louis Brooks’s ranch are twice as high as the Statue of Liberty, with blades that reach as wide as the wingspan of a jumbo jet. More important, from his point of view, he is paid $500 a month to permit 78 of them on his land, with 76 more on the way.

“That’s just money you’re hearing,” he said as they hummed in a brisk breeze.

Texas, once the oil capital of North America, is rapidly turning into the capital of wind power. After breakneck growth in the past three years, wind turbines contribute more than 3 percent of Texas electricity, sufficient to supply power to one million homes.

Texans are even turning tapped-out oil fields into wind farms, and no less an oilman than T. Boone Pickens is getting into alternative energy.

“I have the same feelings about wind,” Pickens said in an interview, “as I had about the best oil field I ever found.” He is planning to build the biggest wind farm in the world, a $10 billion behemoth that could power a small city by itself.

Wind turbines were once a marginal form of electrical generation. But amid rising concern about greenhouse gases from coal-burning power plants, wind power is booming. Installed wind capacity in the United States grew 45 percent last year, albeit from a small base, and a comparable increase is expected this year.

At growth rates like that, experts said, wind power could eventually make an important contribution to the U.S. electrical supply. It already supplies about 1 percent of American electricity, powering the equivalent of 4.5 million homes. Environmental advocates contend it could eventually reach 20 percent, as has already happened in Denmark. Energy consultants say that 5 percent to 7 percent is a more realistic goal.

The United States recently overtook Spain as the second-largest wind power market, after Germany, with $9 billion invested last year. A recent study by Emerging Energy Research, a consulting firm in Cambridge, Massachusetts, projected $65 billion in investment from 2007 to 2015.

Despite the attraction of wind as a nearly pollution-free power source, it does have limitations. Though the gap is closing, electricity from wind remains costlier than that generated from fossil fuels. Moreover, wind power is intermittent and unpredictable, and the hottest days, when electricity is needed most, are usually not windy. With ever more hulking turbines, the blades can kill birds and bats. Aesthetic and wildlife concerns have raised opposition around the country, particularly in coastal areas like Cape Cod, Massachusetts.

Some opposition in Texas has cropped up as well, including lawsuits to halt wind farms that were said to be eyesores or could harm wetlands. But the opposition has been limited, and has done little to slow the rapid growth of wind power in the state.

Some Texans see the sleek new turbines as a welcome change in the landscape.

“Texas has been looking at oil and gas rigs for 100 years, and frankly, wind turbines look a little nicer,” said Jerry Patterson, the Texas land commissioner, whose responsibilities include leasing state lands for wind energy development. “We’re No. 1 in wind in the United States and that will never change.”

Texas surpassed California as the top wind farm state in 2006. In January alone, new wind farms representing $700 million of investment went into operation in Texas, supplying power sufficient for 100,000 homes.

Supporters say Texas is ideal for wind-power development, not just because it is windy. It also has sparsely populated land on which to build wind farms, fast-growing cities and a friendly regulatory environment for developers.

“Texas could be a model for the entire nation,” said Patrick Woodson, a senior development executive with the German utility E.ON, which operates in the state.

At the end of 2007, Texas had installed wind power of 4,356 megawatts (with 1,238 under construction), far outdistancing the 2,439 megawatts (with 165 under construction) in California. Minnesota and Iowa came in third and fourth with almost 1,300 megawatts each (with 46 and 116 under construction, respectively).

Iowa, Minnesota, Colorado and Oregon, states with smaller populations than Texas, all get 5 percent to 8 percent of their power from wind farms, according to estimates by the American Wind Energy Association.

The quaint windmills of old have been replaced by turbines that stand as high as 20-story buildings. These more powerful turbines are able to capture power even when the wind is relatively weak, and they help to lower the cost per kilowatt hour.

Much of the boom in the United States is being driven by foreign power companies with experience developing wind projects, including Iberdrola of Spain, Energias de Portugal and Windkraft Nord of Germany. Foreign companies own two-thirds of the wind projects under construction in Texas.

A short-term threat to the growth of wind power is the looming expiration of U.S. federal clean-energy tax credits, which Congress has allowed to lapse several times over the years. Advocates have called for extending those credits and eventually enacting a national renewable-power standard that would oblige states to expand use of clean power sources.

A longer-term problem is potential bottlenecks in getting wind power from the places best equipped to produce it to the populous areas that need electricity. The part of the United States with the highest wind potential is a corridor stretching north from Texas through the middle of the country, including sparsely populated states like Montana and the Dakotas. Power is needed most in the dense cities of the coasts, but building new transmission lines over such long distances is certain to be expensive and controversial.

“We need a national vision for transmission like we have with the national highway system,” said Robert Gramlich, policy director for the American Wind Energy Association. “We have to get over the hump of having a patchwork of electric utility fiefdoms.”

Texas is better equipped to deal with the transmission problems that snarl wind energy in other states because a single agency operates the electrical grid and manages the deregulated utility market in most of the state.

The Texas Public Utility Commission in July approved transmission lines across the state capable of delivering as much as 25,000 megawatts of wind energy by 2012, presuming the boom continues. That would be five times more wind power than is now generated in the state.

Royal Dutch Shell and TXU are planning to build a 3,000-megawatt wind farm in the Texas Panhandle, leapfrogging two FPL Energy Texas wind farms to become the biggest in the world. Not to be outdone, Pickens is planning his Panhandle wind farm of 4,000 megawatts.

“I like wind because it’s renewable and it’s clean and you know you are not going to be dealing with a production decline curve,” Pickens said. “Decline curves finally wore me out in the oil business.”

It has dawned on many Texans in recent years that wind power, whatever its other pros and cons, represents a potent strategy for rural economic development.

Since the wind boom began a few years ago, the total value of property here in Nolan County has doubled, and the Nolan County judge Tim Fambrough estimated that it would increase 25 percent more this year. County property taxes are going down, home values are rising and the county has extra funds to remodel the courthouse and improve road maintenance.

“Wind reminds us of the old oil and gas booms,” Fambrough said.

Wind companies are remodeling abandoned buildings, and new stores, hotels and restaurants have opened around this old railroad town.

Dandy’s Western Wear, the local cowboy attire shop, cannot keep enough python skin and cowhide boots in stock because of all the Danes and Germans who have come to town to invest and work in the wind fields and then take home Texas souvenirs.

“Wind has invigorated our business like you wouldn’t believe,” said Marty Foust, owner of Dandy’s. “When you watch the news you can get depressed about the economy, but we don’t get depressed. We’re now in our own bubble.”