This article comes from Baker & Hostetler LLP and is authored by Cody T. Vasut.
On Oct. 26, the U.S. Energy Information Administration released a report challenging the view that Texas is a leader in wind power production. According to the report, Texas lagged far behind Midwest and Plains states in 2015 in utilizing wind energy as a percentage of total net electricity generation. Iowa, South Dakota and Kansas led the survey, with a 31%, 25% and 24% share of wind energy as a percentage of total net generation, respectively. Texas came in 12th nationally, with a share of 9.9%. Such a ranking, however, is misleading.
First, notwithstanding its ranking, Texas is still the highest wind electricity-producing state in the nation, making up 24% of the national total wind generation. Texas’s total wind electricity production – and share as a%age of total net generation – is also expected to continue to rise in the coming years. Indeed, on Nov. 29, Spanish wind energy giant Gamesa announced that it was awarded a contract to supply 75 additional 2.1 MW turbines to Terna Energy, a Greek renewable energy company, for the development of another wind farm in Texas (for a total of 155 MW additional capacity). Delivery and commissioning are anticipated to be completed by the end of 2017.
Second, the U.S. Energy Information Administration’s report is based on annual wind energy production, which does not take into account changing wind energy production levels on a daily basis. For example, on Nov. 27, Texas set a new record for wind power generation. According to the Electric Reliability Council of Texas (ERCOT), the electric grid operator for the state of Texas, wind farms were providing about 15,000 MW of electricity, which accounted for about 45% of the total demand for electric power at the time, far exceeding the 9.9% annual figure for Texas in 2015. This new record comes on the heels of the previous record set on Nov. 17 for wind generation of 14,122 MW (34.88% penetration) and the record for wind penetration set on March 23 of 48.28%. These records exceed production records in the Midwest and Plains states in 2016, including the 11,305 MW record set on Nov. 17 for the Southwest Power Pool (SPP) covering Kansas and portions of neighboring states, and the 13,084 MW record set on Feb. 19 for the Midwest ISO (MISO) covering Iowa, South Dakota, Minnesota, Wisconsin and large swaths of neighboring states.
Finally, smaller-population Plains states, such as Iowa and Kansas, have far lower total net generation of electricity than does Texas, inflating their percentage of total net generation attributed to wind energy. Thus, the adage holds true that statistics can be misleading if not read in context. Texas remains a powerhouse of wind energy production and is likely to continue to be so as its investment in wind energy continues in the state.