HOUSTON (Reuters) - West Texas wind power could reach Atlanta if Pattern Energy Group is successful at building a 400-mile transmission line to create an export path for electricity from the nation’s No. 1 wind state.
Wind farms operating in wide open areas of West Texas total 9,300 megawatts of capacity, but the carbon-free electricity is trapped in Texas due to the state’s grid configuration.
Pattern’s proposed Southern Cross transmission line would maintain Texas’ grid independence while opening a route by 2016 for wind power to be sold into the U.S. Southeast, a region that lacks large-scale wind and solar potential.
Texas is spending $5 billion to expand its grid to allow Texas wind output to double to 18,000 MW by 2013 and to tap into powerful wind resources from the Texas Panhandle.
In Texas and across the nation, new wind-farm development slowed dramatically this year due to tight financial markets, lack of a strong national mandate to cut greenhouse gas emissions and a drop in wholesale power prices linked to cheaper natural gas, according to wind industry sources.
Pattern Transmission Director David Parquet said the Southern Cross project could keep Texas wind development on track to 18,000 MW despite current market obstacles.
“People tell us, ‘This will allow us to do what we originally planned,’ as opposed to what the economy and gas prices are presently doing to the wind build-out,” he said.
At a price tag of more than $1 billion, the Southern Cross line would be a high-voltage, direct-current line stretching from east Texas to northeastern Mississippi, where up to three 500-kilovolt alternating-current lines could deliver power to utilities serving 10 states in the South.
Pattern officials have discussed the project with the Tennessee Valley Authority, Southern Co and Entergy Corp, said project manager Chris Shugart.
Pattern Energy is an independent wind and transmission developer formed in 2009 by former executives of Babcock & Brown and backed by an investment fund managed by Riverstone Holdings LLC.
While Texas has exceeded its renewable power target, Southeastern states have yet to set targets to boost use of renewable power to reduce greenhouse gas emissions from fossil-fueled power plants.
Some utilities, however, expect federal mandates in the future. TVA, for example, built the first wind farm in the Southeast and seeks to buy 2,000 MW of wind generation over the next few years. Its 1,300 MW of wind power under contract so far will come from Illinois, Kansas, Iowa and the Dakotas where wind power is abundant.
“Weather conditions for wind power are far more favorable in the Midwest, but securing transmission paths to move electricity to the TVA system in the Southeast is a challenge,” TVA said.
Recently, Louisiana utility regulators announced a pilot program to encourage renewable power development.
While Parquet said he expects a federal renewable portfolio standard, or RPS, down the road, he said the Southern Cross project can succeed without one.
“We will have a delivered price that is right around the avoided cost of power within the Southeast,” Parquet said. “If there were an RPS, this would probably go quicker, but on a fundamental, economic basis, we think we can make this work.”
Pattern will offer more project details in a filing with the Federal Energy Regulatory Commission before year end.
The project will not go forward unless FERC rules that it does not raise jurisdictional issues for Texas, Parquet said.
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