The Power Puzzle

When Texans turn on their lights, run their air conditioning or plug in their iPads, they are getting an increasing amount of power from the wind — and from coal plants. 

Figures released earlier this month show that last year, nearly 8 percent of the power on the state's electric grid was generated by wind. That's more than three times the national average. And because Texas recently added several coal-generating units, coal plants — for the first time in recent memory — produced more power than any other electricity source. Nuclear power's contribution held about steady, at 13 percent of generation.

The big loser was natural gas. While natural gas is abundant in Texas, less polluting than coal and substantially cheaper than it was jut a few years ago, it is also easily replaced by the wind. The percentage of power on the grid generated from natural gas dropped from 42 percent in 2009 to 38 percent in 2010; coal, at 39.5 percent, slightly edged it out. Since at least 1990, natural gas has generated more electricity than coal in Texas, according to the Energy Information Administration (whose figures differ slightly from those of the Texas grid, which covers most but not all of the state and whose numbers go back only to 2002).

Hot weather and the recovering economy caused Texans to use more power overall. The Electric Reliability Council of Texas, the operator of the state's grid, reported that electricity usage rose by 3.5 percent in 2010, slightly less than the 4 percent rise nationally.

Perhaps the most interesting aspect of the Texas figures centers on the relationship between natural gas and wind power.

Wind-generated power has been growing rapidly in the state; Texas has nearly three times as much wind capacity in place as the next-closest state, Iowa, and broke the 10,000 megawatt barrier for the first time last year, the American Wind Energy Association reported Monday. The recent growth (from 6.2 percent of the Texas grid's generation in 2009 to 7.8 percent last year) came despite well-documented transmission-line constraints in West Texas, home to the vast majority of the state's wind capacity. There, some wind turbines sometimes get shut down even when the wind is blowing, because there is not enough room on the wires to move the power to the big cities hundreds of miles away that need it.

Much of the new wind has come from a different part of Texas — along the Gulf coast in the south, especially Kenedy and San Patricio counties. Barry Smitherman, chairman of the Public Utility Commission, says there are now about 1,100 megawatts of wind in ERCOT's south zone. That translates to roughly one-ninth of the total wind capacity in Texas.

In addition, a transmission line built by NextEra Energy Resources, a Florida-based renewables company, connected an enormous wind farm in Kendall and Taylor counties to the grid. That line began operating in fall of 2009, so the wind farm's contribution showed up more fully last year. (The state has planned $5 billion worth of other transmission lines to remedy the congestion in West Texas; the NextEra line, however, is a "private" line not built as part of the state's process.)

"Obviously the wind is impacting gas," said John Fainter, the president of the Association of Electric Companies of Texas. Wind goes onto the grid before natural gas because the "fuel" of the wind is free, unlike that of natural gas plants — so it costs nothing to add more wind to the grid, when the wind is available. Gas units are also relatively easy to turn on and off — making it a good complement to the vagaries of wind power. In recent years, too, "A number of natural gas plants have been retired or mothballed," said Smitherman of the utility commission. For example NRG, a large energy-generation company that also owns Reliant Energy, said it had recently mothballed some of its natural gas units from the 1950s — meaning that they will stay turned off unless summertime demand spikes.

The long-term drop in the share of natural gas on the Texas grid — as recently as 2002, gas accounted for 46 percent — contrasts to the rest of the country. Nationally, reliance on gas has increased (from 18 percent in 2002 to 23 percent in 2009), while the share of coal generation has dropped, from 50 percent in 2002 to 45 percent in 2009. The reasons for this difference are rooted in history: Decades ago, Texas depended nearly entirely on natural gas for its electricity while many other states built coal plants in the 1950s, 1960s and 1970s and are now starting to retire them, said John Ragan, the president of the Texas region for NRG.

Texas did not begin building coal plants until the 1970s and 1980s, Ragan said — so while some of natural gas plants here may be older and closer to retirement, Texas' coal generators are newer and sturdier compared with the rest of the nation. A few existing coal plants in Bexar County and Milam County recently added capacity, and the Texas power-generation giant Luminant began operating units at a major new coal plant called Oak Grove in Robertson County in 2009 and 2010. The operators say the new coal plants have state-of-the-art technology to reduce conventional emissions (like mercury), although none of the plants will capture carbon dioxide and store it underground, something environmentalists would like coal plants to do in the future.

Natural gas could regain some of its share in the future, however. Texas will need more new plants, because its overall electric use will continue to rise as the population grows and gadgets continue to proliferate. Electricity use on the Texas grid at peak hours — meaning hot summer afternoons — is projected to increase by 37 percent by 2030.

"Any new construction is probably going to be more likely to be gas," said Fainter, citing the speed at which gas plants can be built and the low cost of natural gas relative to a few years ago.

Coal plants, which are under fire from environmentalists unless they put in expensive new technologies to capture and bury carbon dioxide, may be tough to build in the future, even though some proposed ones have recently gotten permits. 

The gas industry has talked of trying to shift more costs to wind to make up for the wind's intermittency, arguing that other types of power plants pay penalties if they go offline unexpectedly, but wind is allowed to come and go in accordance with the whims of nature. However, Fainter said, "our guys are not talking about any particular legislation right now on changing the dynamics."

Lt. Gov. David Dewhurst recently offered support for gas. Citing environmental concerns as well as the need to take full advantage of Texas' abundant natural-gas supplies, he has proposed phasing out old coal plants and replacing them with gas-fired generation. Tom "Smitty" Smith, the Texas head of the environmental advocacy group Public Citizen, said he endorsed this idea.

Meanwhile, wind will continue to grow. Smitherman noted that the state-planned $5 billion transmission line build-out, which is proceeding, should nearly double the wind-energy capacity that's currently on the Texas grid.