Most Texans already know that the state’s fortunes were and are fueled by oil and natural gas. What many don’t realize, however, is just how much the future of the Lone Star State will be powered by renewable energy. With the Green Energy in Texas series, we will explore various aspects of the green energy industry and keep you informed on how those changes and innovations might affect your Texas electricity bill.
Why Transmission Effects Texas Renewables
Let’s start with two basic questions that most Texans already know:
Where does most of the population live? Answer: in the eastern part of the state.
Where is Texas wind energy most abundant? Answer: in the western part of the state.
So, how does all that wind-generated electricity in the western part of the state get sent to the folks in the eastern part that need it? Answer: Transmission lines.
While transmission lines may just look like big enough to carry huge amounts of electricity, they’re not able to carry an unlimited amount of electricity. Transmission lines are rated by voltage with high voltage lines capable of carrying 115,000 volts (115 kV) to 138 kV for hundreds of miles. While high voltage transmission lines do move a lot of power, they aren’t strong enough to carry the amount of electricity that comes from wind farms in west Texas. That’s because different transmission lines also have thermal limits, or how hot they can get.
Transmission lines get hot, especially during the summer. While metal is great at conducting electricity, it does have a certain amount of electrical resistance. The longer the metal cable line, the more the electrical resistance. So a percentage of power transmitted through a power line is lost due to resistance, producing heat, which is known as “line loss”. The higher the temperature, the higher the electrical resistance, and the higher the amount of line loss. The more electricity the line carries, coupled with hot weather, will cause the power line cable to stretch and sag. If a cable sags low enough and touches a tree, it can short out and cause a power outage over an entire region of a state. For this reason, transmission line temperatures are monitored and many have thermal constraints placed on them so power loads are limited to prevent failures.
For years, west Texas wind power could only make it east as long as the amount of electricity being sent through the low capacity transmission lines was low. When high demand called for more electricity that could be sent safely through the transmission line, that part of the Texas grid became congested. In the case of wind power, many wind farms had to shut down or “curtail” generation, others had to wait longer to send electricity. The problem is that congestion increases costs. First because congestion prevents the lowest-cost electricity from flowing freely to a specific area. Second, those companies who are unable to transmit power are paid a “congestion rent” to wait. For example, in 2013, demand for electricity in Houston required electricity to be transmitted into the city. Lines in the northern part of the city were routinely constrained, resulting in payments of $38.5 million in congestion rent through October that year. Those congestion rents get added to the price of electricity and that cost ends up as part of your electricity rate.
Completion of the the Competitive Renewable Energy Zone (CREZ) transmission projects in 2014 solved the problem of getting 18,456 megawatts (MW) of power generated by wind farms in western Texas to the cities in eastern Texas that consumed the electricity. The project built nearly 3,600 miles of new 345 kV transmission lines as well as switches, terminals, and substations from the Texas Panhandle to San Antonio. at a cost of $7 billion.
Why Are Transmission Projects So Expensive?
Apart from the physical costs of stringing cable from tower to tower, the main driver behind high transmission and distribution costs throughout the nation are governmental policies that have incentivized grid reliability investments by utility companies. This is a result of the Energy Policy Act of 2005 which empowered the Federal Energy Regulatory Commission (FERC) to incentivize investment to improve the capacity and reliability of the nation’s bulk electricity transmission and distribution network. This also included guaranteeing utilities “an attractive return on equity” and recover all incurred costs of a transmission project.
Do Transmission Projects Increase Your Bill?
In terms of immediate costs, the answer is yes. Costs from CREZ (as well as other transmission projects) are passed onto your monthly bill by your Transmission and Distribution Utility (TDU) so they can recover their investment. However, transmission improvements, like CREZ, offset potentially ongoing costs from expensive congestion rents. Over the long haul, transmission projects help reduce the price of electricity by bringing more clean energy cheaply to Texas energy consumers. Currently, wind power is selling between $20 and $30 per MWh — down from $70 per MWh just seven years ago. With no fluctuating fuel costs, this makes wind energy more likely to be dispatched before some fossil fuel-fire generators.
With more wind and solar generation anticipated to be built in the western part of the state, there are already plans circulating to expand CREZ and other projects further to handle over 21,000 MW of new renewable energy.