Center Of The Texas Wind Industry

Texas has a large wind energy capacity. If ranked among the nations of the world it would rank sixth. But without new advances to overcome some of the major limitations of wind energy the state may be nearing the limit on how far it can go with wind.

Wind has an annoying tendency to not blow when we really want it to. One can make long-term assessments about the amount of electricity a wind installation will produce over time. But, that doesn't help when it's 105° in Houston in August and the wind in West Texas isn't blowing.

Not surprisingly demand on the Texas electricity grid is highest during the summer months. Hot summer days in West Texas, the center of the Texas wind industry, tend to be windless. The wind does blow more at night. But by then the electricity isn't needed as much.

One company has plans to help solve this dilemma by using compressed air and underground caverns in the Texas Panhandle. Rather than allow the electricity generation capacity of wind farms to be wasted overnight, the company, Chamisa Energy, will use that electricity to power machines that will pump the airtight caverns full of compressed air.

Once the caverns are filled with compressed air the energy of the wind has effectively been transformed into a different form that can be used later. When electricity demand goes up this compressed air can be used to provide needed electricity to the grid. The compressed air mixed with small amounts of natural gas can then be released to power generators which create electricity. This electricity is then fed to the grid during times when demand is high.

Texas ratepayers should welcome this project which once online should be the largest energy storage project in the state. Look for more companies to invest in projects to take advantage of this arbitrage opportunity between nighttime and daytime electricity rates. This makes it possible to buy electricity cheap when demand is low and profit by reselling it to the grid when it's needed most.

The ultimate winner and all of this will be electricity consumers in Texas who could see cheap electricity rates as a result of a more efficient electricity grid. This allows the capacity of the grid to be expanded without need necessarily of building new power plants. This would also potentially lead to more short-term predictability in wholesale electricity rates by reducing the occurrence and severity of short term supply shortages.

For retail electricity providers in Texas lower wholesale price risk is a good thing. When they sell a fixed-rate electricity plan to consumers they are assuming the risk of wholesale price jumps. In other words retail consumers will ultimately benefit from lower wholesale price volatility just like they ultimately pay higher rates when wholesale price volatility is high.