Show Navigation

Advanced Power Alliance Recognizes Texas State Representative Jim Murphy as “Texas Energy Champion”

June 25, 2019 – Advanced Power Alliance President Jeff Clark and American Wind Energy Association (AWEA) Vice President Susan Sloan presented the “Texas Energy Champion” award to Texas State Representative Jim Murphy (District 133 – West Houston) at a meeting in Houston this morning.

The award was presented by the APA and AWEA in recognition of Murphy’s policy work to support economic development in the state, and for his commitment to promoting all of Texas’ diverse energy industries. Representative Murphy is serving his sixth term in the Texas House where he chairs the Committee on Pensions, Investments, and Financial Services and serves as a member of the Committee on Ways and Means.

In presenting the award to Chairman Murphy, Clark cited the Chairman’s willingness to make economic development a priority for the state:

“Because of his expertise in important business and economic development issues, his commitment to growing our state’s economy, and his willingness to work with all stakeholders, Chairman Murphy is a respected and effective member of the Texas House of Representatives.

“He is a lawmaker who wants to see Texas to achieve its incredible economic potential and he is working to enact free market policies to promote prosperity and ensure that our state remains internationally competitive.

“His work to promote all of Texas’ diverse energy industries is paying dividends by creating a business climate that attracts capital investment and creates job opportunities for workers across the state. That translates into a better quality of life for all Texans.

“This Texas Energy Champion award represents the appreciation of our many energy industries and their employees, from the Panhandle to the Rio Grande and from the Rockies to the Piney Woods. Chairman Murphy’s visionary work is helping to create jobs and keep Texas in the forefront as America’s energy leader.”

Jeff Clark, President
Advanced Power Alliance

Google Powers Up with Iowa, Oklahoma, and South Dakota Wind Energy

by Hanna Hunt – AWEABlog

Never one for small acts, Google recently announced that it will be buying a massive combined 536 megawatts (MW) of new wind capacity from four U.S. wind farms. Here are the details on Google’s latest deals:

  • One 200 MW power purchase agreement (PPA) signed with EDF Renewable Energy for the entire output of the planned Glaciers Edge wind farm in Iowa
  • Two 98 MW PPAs signed with Avangrid Renewables for the entire output of the planned Coyote Ridge and Tatanka Ridge wind farms in South Dakota
  • One 140 MW PPA signed with Grand River Dam Authority (GRDA) for output from Enel Green Power North America’s 300 MW planned Red Dirt wind farm in Oklahoma

Google is a global leader in renewable energy procurement, announcing last yearthat it would be powered by 100 percent renewables by the end of 2017. What’s most impressive about this news? Ninety-five percent of that will come from wind. And prior to yesterday’s announcements, Google had already signed agreements to purchase a total of 1,800 MW of U.S. wind energy.

Gary Demasi, Google’s director of global infrastructure, explained why wind energy represents a low-risk, high-value investment for Google: “Renewables from projects like [these] bring value to our business as we scale and accelerate investment in the communities where we operate … with solar and wind declining dramatically in cost and propelling significant employment growth, the transition to clean energy is driving unprecedented economic opportunity and doing so faster than we ever anticipated.”

And Google’s not alone. In total, corporate and other non-utility customers have signed approximately 7,000 MW of PPAs for U.S. wind power to date. Early leaders, which included Google and other high tech companies, are now being joined by a diverse range of retailers and household brands. For example, four companies, including Anheuser-Busch, Cummins, JPMorgan Chase, and Kimberly Clark, all signing PPAs for the first time last quarter.

Interested in learning more about the Fortune 500 companies and other non-utility customers investing in wind? Dive into our new interactive map below. The map includes all publicly announced non-utility wind PPAs at least 20 MW in size.

M&M’S® Shares Commitment to Making Clean, Renewable Energy Even Sweeter

M&M’S Launches Fans of Wind Energy Campaign to Engage Consumers on How Renewable Energy Can Counteract Climate Change

M&M’S, one of Mars, Incorporated’s most iconic and beloved brands, is addressing the importance of tackling climate change and how everyone – even colorful chocolate treats and their spokescandies – can make a difference. Today, M&M’S is launching its Fans of Wind energy campaign, using “Red” and “Yellow” as enthusiastic advocates for renewable wind-powered energy.

The campaign is part of Mars’ Sustainable in a Generation Plan which includes $1 billion of investment over the next few years to tackle urgent threats including climate change, poverty in the supply chain and scarcity of resources. This effort holds special meaning for M&M’S, since Mars sources wind power equivalent to the energy needed to produce all the M&M’S sold in the world.

https://youtu.be/LHkZz2nay04

Fans of Wind Energy
To inspire consumer action in preventing further climate change, M&M’S has tasked its brand personalities with sharing the message about renewable energy. Fans of Wind energy helps shine a light on one reason why everyone should care about wind energy: because climate change is real and businesses need to be a part of the solution.

Mars and M&M’S believe the science on climate change is clear. Fans of Wind energy is launching to increase awareness of the urgency of climate change, as well as the importance of everyone doing their part in combatting climate change, companies and brands included. In fact, Mars’ partnership with the 200-megawatt Mesquite Creek Wind Farm in Texasmarks the biggest long-term commitment to using renewable energy of any food manufacturing business in the United States. At this 25,000-acre wind farm, Mars purchases enough energy to power all of its sites in the United States.

“We have the power to act now to prevent further climate change,” said Berta de Pablos-Barbier, President of Mars Wrigley Confectionery U.S. “None of us will thrive without a healthy planet. Through the new Sustainable in a Generation Plan and our M&M’S campaign we are committed to doing our part. We are using our unique position as one of the world’s largest privately held, family-owned businesses, plus the power of our iconic brands like M&M’S, to do good for our consumers and for the planet.”

Addressing Climate Change
M&M’S and Mars believe the more consumers engage in dialogue about addressing climate change, renewable energy and a healthy planet, the more the world will change. There is no option not to become fully sustainable, both for the planet as well as for the business.

“One M&M’S candy on its own can seem small, but we know our brand can have a big impact on the world by doing what’s right to combat climate change,” said de Pablos-Barbier. “Thanks to the love consumers have for the brand, we’re hoping to make a bigger impact. Each of our consumers has the power to take small steps to increase their use of renewable energy to make big strides in ensuring the future health of our planet.”

Investing in a Healthy Planet
Thanks to wind energy, Mars is one step closer to decreasing its dependency on fossil fuels and reducing harmful greenhouse gas emissions that contribute to climate change. Mars partners with two wind farms – one in Texas and one in Scotland. And most importantly, Mars will continue to increase renewable energy usage to meet its goal of eliminating greenhouse gas emissions from its direct operations by 2040 and reduce greenhouse gas emissions across its value chain by 67 percent by 2050.

“It’s rare to see product personalities become the voice of a cause – but we believe the campaign will help Mars and M&M’S explain our commitment to sustainable business efforts in a fun, relatable way,” said Tanya Berman, Vice President, Chocolate, Mars Wrigley Confectionery U.S. “Consumers are increasingly aware of the big issues our planet faces and expect the brands they care about to take action. This is one way we can raise awareness and bring color to the conversation around how renewable energy can counteract climate change.”

Consumers are invited to join M&M’S spokescandies Red and Yellow and pledge their support as Fans of Wind energy. Consumers can visit M&M’S World stores to purchase limited edition Fans of Wind energy inspired treats and enjoy a special photo moment. Alternatively, visit www.mms.com/fansofwind to learn more about climate change and renewable energy, and how they can support a healthy planet for all.

To find out more about the Mars Sustainable in a Generation Plan, visit: www.SustainableInAGeneration.com

About Mars, Incorporated
Mars is a family-owned business with more than a century of history making diverse products and offering services for people and the pets people love. With almost $35 billion in sales, the company is a global business that produces some of the world’s best-loved brands: M&M’s®, SNICKERS®, TWIX®, MILKY WAY®, DOVE®, PEDIGREE®, ROYAL CANIN®, WHISKAS®, EXTRA®, ORBIT®, 5™, SKITTLES®, UNCLE BEN’S®, MARS DRINKS and COCOAVIA®. Mars also provides veterinary health services that include BANFIELD® Pet Hospitals. Headquartered in McLean, VA, Mars operates in more than 80 countries. The Mars Five Principles – Quality, Responsibility, Mutuality, Efficiency and Freedom – inspire its more than 85,000 Associates to create value for all its partners and deliver growth they are proud of every day.

For more information about Mars, please visit www.mars.com. Join us on Facebook, Twitter, LinkedIn, Instagram and YouTube.

Contact:
Alicia Buksar
Senior External Affairs Manager
1-908-798-2970
alicia.buksar@effem.com

When Wind Turbines Move to Town – How Do Rural Communities Benefit?

By Anna Luke, American Wind Energy Association
Originally published on Into the Wind

It wasn’t always the case, but nowadays rural places are often among those in greatest need of new economic development. Sadly, the farm belt and Rust Belt have been losing jobs and investment for decades. It will take significant change to raise up rural communities, including welcoming new opportunities like wind. Rural areas already are home to 99 percent of the country’s wind turbines, with more on the way.

Building a wind farm can be a big change for a small town, but a number of benefits come along with those changes, including:

1. Job Creation

Hundreds of construction workers come to town during the build-out, bringing new regulars to the local diner. And full-time employees will have jobs at the wind farm, often a major new town employer. There are now more than 100,000 people working in the wind industry, and wind turbine technician is the fastest growing job in America. This is a huge opportunity for young men and women who are looking for good-paying jobs in rural towns.


2. Economic Development

It’s typically pretty rare when a multi-million dollar economic investment comes knocking at the door of a small town. When else does that happen? Maybe when a new superstore wants to open a location near you or a sports team relocates to your area.

3. Increased tax revenue and/or lower taxes for individuals

When April 15 rolls around, how would you like to pay no local taxes? For the town of Sheldon, N.Y., the project generated so much tax revenue that local residents paid no taxes for eight years. Payments went to improving roads, building a basketball court at the town park, and erecting new walls at the town’s cemeteries.


4. Landowner Lease Payments

Rural landowners receive nearly a quarter of a billion dollars in lease payments every year for hosting wind turbines, acting as their new “drought-resistant cash crop.” Many project developers also provide payments to other residents living nearby as a goodwill gesture as well. These payments are significant income streams and can help keep the farm in the family.


5. Funding for Community Projects

The companies that own wind projects want to be good corporate citizens, and often donate to local charities and community projects like parades, restoration efforts, and youth clubs. For example, Enel Green Power North America and TradeWind donated $50,000 to renovate Leonardo Children’s Museum in Enid, Oklahoma, which included improvements like an interactive Power Tower exhibit on oil, natural gas, wind and solar power.

Utility-scale wind projects are a big adjustment for small communities, but they bring significant benefits to town. To hear about some on-the-ground experiences with wind, check out some more YouTube testimonials.

Fort Hood Renewable Energy Facilities Enter Commercial Operations

Killeen, Texas – The U.S. Army’s largest single renewable energy project began officially generating clean electricity on April 27.Apex Clean Energy (Apex) developed, managed construction of, and currently operates the groundbreaking hybrid wind and solar complex, which will provide more than 50 percent of the annual load at U.S. Army Garrison Fort Hood in Killeen, Texas.

Apex and Northleaf Capital Partners (Northleaf) own the renewable energy portfolio of which the complex is a part: the 50.4 MW Cotton Plains Wind and 151.2 MW Old Settler Wind facilities in Floyd County, Texas; and the 15.4 MWac Phantom Solar on-site at Fort Hood.

The Defense Logistics Agency–Energy, on behalf of the Army, is purchasing the power from Cotton Plains Wind and Phantom Solar to supply energy to Fort Hood. The two facilities will save the Army—and taxpayers—an estimated $168 million in direct energy costs over the life of the project. Old Settler Wind, meanwhile, is generating enough clean electricity to power 51,000 average U.S. homes. Apex is providing asset management services for all three facilities.

“With our deep corporate ties to the military, Apex is honored to partner with the Army on its goals to increase our country’s energy independence and protect our national security,” said Mark Goodwin, president and CEO of Apex. “We are all proud to help Fort Hood ensure decades of consistent, affordable, and secure clean energy.”

“We are pleased to partner with Apex, given the company’s reputation as a leading renewable energy company,” said Jared Waldron, a director at Northleaf. “Direct investments in fully contracted wind and solar assets are consistent with Northleaf’s investment strategy and offer stable cash flows and attractive long-term returns for our investors.”

Apex and Northleaf arranged debt financing and tax equity commitments for the renewable portfolio. CohnReznick Capital served as financial adviser to Apex.

The U.S. Army and Apex Clean Energy will host a ribbon-cutting ceremony at Fort Hood on June 2 to commemorate the start of operations. More information will be provided as the date approaches.

###

About Apex
Apex Clean Energy builds, owns, and operates utility-scale wind and solar power facilities. Apex was the U.S. market leader in 2015 and has brought nearly 1,700 MW online over the past two years.

With a team of over 200 professionals and the nation’s largest wind energy project pipeline, Apex is a leader in the transition to a clean energy future. For more information, visitwww.apexcleanenergy.com.

About Northleaf Capital Partners
Northleaf Capital Partners is a leading independent global private equity, infrastructure and private credit manager, with more than $9 billion in commitments under management on behalf of public, corporate and multi-employer pension plans, university endowments, foundations, financial institutions and family offices. Northleaf’s global infrastructure program pursues direct investments in mature, conservatively-positioned infrastructure assets in developed markets.

Northleaf’s 85-person team, located in Toronto, London, Chicago, and Menlo Park, is focused exclusively on sourcing, evaluating and managing private markets investments globally. Northleaf currently manages seven global private equity funds, two specialist private equity secondary funds, two infrastructure funds, a private credit fund and a series of customized investment mandates tailored to meet the specific needs of institutional investors and family offices. For more information on Northleaf, please visitwww.northleafcapital.com.

Clearing the Air: Lamar Alexander, You’re Wrong About Wind Power

by Dr. Stephen A. Smith, Executive Director, Southern Alliance for Clean Energy

The Plains and Eastern Clean Line project could inject large quantities of high-value, low-cost wind power directly into the Tennessee Valley region from western Oklahoma. Recently Senator Lamar Alexander (R-TN) spoke on the senate floor in opposition to the project, and wind energy. We are disappointed that Sen. Alexander continues to use outdated information regarding wind energy. He has a responsibility to support the best interests of his constituents; however, his personal opposition to wind power is clouding the interests of Tennesseans.

Sen. Alexander says that wind power is unreliable. However, Oklahoma’s regional grid operator (the Southwest Power Pool, or SPP) recently reached a record wind power penetration level: at one point, the entire region generated 52% of its electricity from wind power. SPP is eyeing perhaps 75% wind energy penetration levels in the long-term. As shown by Oklahoma’s example, wind power can provide low-cost, reliable energy.

Sen. Alexander says that wind power is expensive. However, his information is outdated. With its considerable wind energy resources, Oklahoma had the lowest electricity prices in the country last year. Tennessee ranked #28.

Sen. Alexander would have Tennessee turn its back on the single energy resource that is arguably doing the most to drive energy prices down all across the country.

Clean Line will have a small but beneficial impact on TVA rates. TVA’s fuel costs could be reduced by $136 million per year, reducing rates by about 0.05 – 0.1 cents per kWh. High natural gas prices would increase the savings. Click the graph above to download the full analysis by SACE.

Sen. Alexander says that a long-term contract would put TVA’s low cost power at risk. In the US Department of Energy’s Environmental Impact Statement for the Clean Line project, Leidos Electrical estimated that the Plains and Eastern Clean Line project is likely to drive down electric prices in Tennessee, Arkansas, and beyond. Our team has studied the impacts on the actual rates TVA charges its customers, and concluded that the project would drive down TVA’s costs and electric rates. This benefit increases when the revenue TVA would earn from its fees for use of the existing TVA transmission system to “wheel” low-cost wind power to power-hungry neighbors.

Sen. Alexander criticizes wind energy, based on historical information from the Buffalo Mountain wind farm in Tennessee. That project became operational 13 years ago (in 2004), and wind turbine technology has advanced significantly since then. While the Buffalo Mountain project achieves capacity factors of approximately 20% per year, as expected, the LBNL study also shows new turbine capacity factors already exceeding 50%+ in high wind speed areas. Western Oklahoma wind farms could achieve 55%+ capacity factors. With oversubscription on an HVDC transmission line, capacity factors could go even higher.

Sen. Alexander says that the Tennessee Valley Authority’s integrated resource plan shows it does not need new baseload power plant capacity. On this point, we agree. We participated heavily in TVA’s most recent integrated resource planning process. TVA found that new baseload power plants, such as new coal and nuclear units, are not needed.

Raising this point is a red herring because wind power is not a baseload capacity resource. The Clean Line project delivers most of its potential value as an energy resource. Low-cost wind energy, when available, reduces costs by helping TVA further minimize its highest cost power plants. This is exactly how the high levels of wind power in Oklahoma have pushed its electric rates to the lowest levels in the country.

What Sen. Alexander did not mention in his floor speech is that he advocates for massive subsidies for untested, unproven and costly small-modular nuclear reactors – a baseload power resource, which Sen. Alexander says (with respect to wind) that TVA doesn’t need.

Sen. Alexander claims that the federal production tax credit for wind energy is a “wasteful” incentive. However, the PTC is phasing out, despite the fact that fossil fuel and nuclear industries still receive massive federal subsidies. The PTC has broad bipartisan support; even Sen. Alexander has voted for legislative packages that contained PTC extensions. Wind farm development companies need to sign contracts soon to qualify for the highest level of this important tax credit. Wind energy projects may up to four years to finish construction, after qualifying for the PTC. Projects that qualified in 2016 would have until December 31, 2020 to deliver power and retain their qualifying status. Project development firms need some level of assurance that projects have buyers. As the PTC begins to phase out, TVA – and its customers – will lose the opportunity to save tens of millions of dollars in savings if nothing is done.

Senator Lamar Alexander’s bluster against wind energy relies on outdated misinformation, that ignores current realities. TVA, and other electric companies throughout the region, should contract for wind energy on the Plains and Eastern Clean Line project, soon.

The Home Depot Taps Texas Wind Farm for Renewable Energy

(Atlanta, Georgia)  The Home Depot® today announced its first major investment in a wind-powered renewable energy project.

The energy purchased from the wind farm is enough to power 100 Home Depot stores for a year while also providing $150,000 in local community benefits.The Los Mirasoles Wind Farm, owned and operated by EDP Renewables North America, is located in Hidalgo and Starr Counties, northeast of McAllen, Texas. Through a 20-year power purchase agreement (PPA), The Home Depot’s annual purchase of 50 megawatts (MW) is a fifth of the wind farm’s 250 MW capacity. The farm utilizes Vestas V110 2.0 MW wind turbines and produces enough power to provide more than 70,000 average U.S. homes with clean electricity each year.

The Home Depot partnered with EDP Renewables for the Texas development in 2016. EDP Renewables operates globally with 41 wind farms across North America.  As a part of its renewable energy initiative, The Home Depot’s goal is to procure 135 megawatts of various renewable energy sources, including solar and wind, by the end of 2020.

In addition to the wind farm, the company also procures energy from solar farms in Delaware and Massachusetts with a combined annual output of 14.5 million kilowatt hours (kWh). More than 150 stores and distribution centers utilize on-site fuel cells that produce roughly 85 percent of the electricity each store needs to operate.

For more on The Home Depot’s wind energy project, visit: https://corporate.homedepot.com/newsroom/texas-wind-farm-renewable-energy

The Home Depot is the world’s largest home improvement specialty retailer, with 2,278 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2015, The Home Depot had sales of $88.5 billion and earnings of $7.0 billion. The Company employs more than 385,000 associates. The Home Depot’s stock is traded on the New York Stock Exchange (NYSE: HD) and is included in the Dow Jones industrial average and Standard & Poor’s 500 index.

SOURCE: The Home Depot

 

Negative Prices Still Rare, Mostly Caused by Other Energy Sources

Concerned about negative pricing in electricity markets?  This insightful commentary from AWEA’s Into The Wind Blog provides insight into negative pricing, its cause, and its impacts on ratepayers in ERCOT and other markets.


Original content located here:  https://www.aweablog.org/negative-prices-still-rare-mostly-caused-by-other-energy-sources/ 
Celeste Wanner and Walter Reid contributed to this analysis.

Some recent press articles have again fallen into confusion over wind’s impact on electricity markets. Recent occurrences of negative prices during a few hours in some markets are actually a different phenomenon from the localized negative price events we discussed two years ago. However, two similarities to those prior events are that the new events are also largely caused by energy sources other than wind, and that both types of occurrences have a minimal impact on markets.

As background, renewable resources do tend to reduce electricity prices by displacing more expensive sources of energy, benefiting consumers. The cost and emissions savings of using wind energy to displace fossil fuel generation are precisely why wind energy has become electric utilities’ number one choice for new generating capacity. As we explained previously, wind’s impact on electricity prices is an entirely market-based outcome that also occurs for other low-fuel cost sources of energy, such as nuclear, coal, and hydropower.

Negative prices are rare, have minimal impact on average market prices

Much of the focus of recent press articles has been on the main electricity market in Texas, known as the Electric Reliability Council of Texas, or ERCOT. A close examination of wholesale electricity price data shows that negative prices accounted for only 0.64% of ERCOT-wide average market prices in 2015. These events have an even smaller impact on demand-weighted average market prices because they tend to occur during hours of lower electricity demand, and because prices go negative by only a dollar or two in almost all cases. As a result, in 2015 negative prices reduced demand-weighted average ERCOT power prices from $26.38/megawatt hour (MWh) to $26.26/MWh, a decrease of only $0.12/MWh, or less than one half of one percent.

In contrast, volatility in the price of natural gas has a profound impact on ERCOT market prices. In 2014, prices for the delivery of natural gas to power plants in Texas averaged $4.62/MCF (thousand cubic feet), yet that fell to an average of $2.88/MCF in 2015. Because natural gas power plants set the electricity market price in nearly all hours in ERCOT, average electricity prices fell from $36.41/MWh in 2014 to $26.26/MWh in 2015, a decline of 28%. This impact is nearly 100 times larger than the impact of all negative price events in 2015. As numerous sources previously explained, occurrences of negative prices have a minimal impact on generators compared to the effect of fuel price fluctuations.

Other energy sources are a leading cause of negative prices

Low natural gas prices also appear to have indirectly caused many of the negative price occurrences in ERCOT in 2015. Low natural gas prices caused many gas power plants to become cheaper to run than coal power plants in 2015, causing coal’s share of the total ERCOT generation mix to plummet from 36 percent in 2014 to 28 percent in 2015, while gas’s spiked from 41 percent to 48 percent.

However, many coal power plants have inflexible contracts with coal mines for the purchase of coal and with railroads for the delivery of that coal. As a result, while Texas coal consumption fell by 15 million tons in 2015, Texas coal deliveries only fell by 10 million tons. The extra 5 million tons were added to coal piles at power plants across Texas, leading to a 37 percent increase in coal stockpiles at Texas power plants over the course of 2015. For reference, the 19.5 million tons of coal stockpiled at Texas power plants as of the start of 2016 would fill a coal train stretching from coast to coast across the United States. The 197 million tons stockpiled at coal power plants nationwide could fill a coal train stretching nearly around the world.

Many coal power plants have limited space to stockpile coal. However, as mentioned above, coal purchase and delivery contracts often have minimum delivery requirements, which are used by the mine and railroad to guarantee revenue so they can finance capital upgrades necessary to deliver the coal. As a result of these contract provisions, the power plants must continue to take deliveries of coal even if they don’t need it, or else the power plant owner would face contract penalties or a lawsuit for breach of contract from the mine or railroad.

As a result, it appears that many power plants have decided to continue operating at a loss simply so that they can continue to burn coal to avoid those large contract penalties. In some cases it appears that these coal power plants continue producing electricity as power prices fall well below the cost of operating the plant, even as power prices go negative. The inflexibility of the coal contract provisions thus acts as an out-of-market incentive to continue operating coal power plants despite power prices going negative and sending a signal that generation should be reduced. Different policies have led to a similar outcome in China, with coal generation inefficiently displacing wind generation in some hours.

Indications of out-of-market coal generation can be seen in market data provided by ERCOT. As an example, the following chart from April 8, 2016, shows electricity demand in green and online generating capacity in red. This chart shows that many power plants are available to come online quickly (see the steep increase in the red line at around 6 AM) and increase their output in the morning and as demand increases over the course of the day. Despite the availability of those quick-starting resources, many power plants continued to operate unnecessarily through the night, even as electricity demand fell more than 10,000 MW below the level of online capacity.

negative-price-chart

With around 5,000 MW of nuclear generation and around 7,000 MW of wind generation running at essentially 100 percent of their available output that night, one can calculate that around 25,000 MW of fossil generating capacity remained online to meet an incremental need for 15,000 MW or less of generation. This indicates these fossil plants were operating at around 60 percent of their nameplate capacity on average, with many fossil power plants likely approaching the minimum level of generation they can provide while remaining online. Even though power prices fell below $7/MWh early that morning, these power plants remained online and continued generating.

Some of this behavior was likely motivated in part by the inability of coal power plants to rapidly change their output, and the fact that it is often costly and takes days to turn coal power plants on and off. For example, in some cases power plants remain online based on the expectation that power prices will go high enough to earn a profit later that day or the next day. However, the fact that power prices averaged less than $15/MWh for all of April 8, and the fact that April 8 was a Friday leading into a weekend period of low demand and low power prices, provides strong evidence that at least some coal power plants are operating at a loss to avoid coal contract penalties.

Some of the most definitive proof that the recent negative prices in ERCOT were not primarily caused by wind is that the market prices are not consistent with the prices typically offered by wind generators. In 2015, 50 of the 56 instances of negative prices were between -$1/MWh and $0/MWh, while the other 5 were between $-1 and $-2.21/MWh. In contrast, wind generators receiving the renewable Production Tax Credit (PTC) tend to offer their generation at prices in the $-20/MWh to -$35/MWh range. Texas has less than 1,000 MW of wind capacity that received a Section 1603 cash grant in lieu of the PTC, only around 1,000 to 2,000 MW of projects built prior to 2006 that are reaching the end of the 10-year PTC, and an unknown but likely small number of projects that received an Investment Tax Credit in lieu of the PTC.

As a bit more background, recent events of ERCOT-wide negative prices are different from previous occurrences of negative prices in Texas. As mentioned in our previous report, earlier this decade wind plants in West Texas were harmed by a lack of transmission capacity that led to negative prices and wind curtailment in the West region. While recent events have seen mildly negative prices across all regions of ERCOT, earlier events typically included negative prices in the -$20 to -$35/MWh range and were confined to the West region. That occurred because transmission constraints prevented wind energy from reaching consumers in large demand centers in East Texas, causing power prices to drop in West Texas while they remained high in the rest of the ERCOT. Because almost no conventional generators are located in the West region, those earlier occurrences almost exclusively affected wind generators and had little to no impact on other generators. Fortunately, building transmission largely eliminated those localized instances of negative prices and greatly reduced wind curtailment in ERCOT, and other parts of the country are seeing similar success in eliminating localized negative prices by building transmission.

Not just coal

In addition to coal, other types of generation also contribute to negative prices. In the U.S., nuclear plants almost never change their output in response to changes in demand or power prices, and hydroelectric plants sometimes continue operating despite negative power prices. For example, April is typically a period of low electricity demand and negative prices in many markets, yet April was one of only two months in 2015 when there were no ERCOT-wide negative prices; the likely cause is that one of the state’s large nuclear units was down for a refueling outage for the entire month. Natural gas power plants often sign contracts with gas pipelines that include “take or pay” provisions with inflexibility similar to that of coal contracts, with the gas power plant owner facing penalties if they do not use gas they have purchased. While coal contracts typically cover periods of several years versus several days for natural gas contracts, these inflexible fuel contracts can still cause negative prices if electricity demand falls unexpectedly but generators must still run to avoid contract penalties.

Fortunately, it is likely that over the long-term, coal supply contracts will be re-negotiated and the market will catch up to the current reality of low electricity prices caused by low natural gas prices. This should eliminate the negative electricity prices that appear to be driven by the market upheaval caused by low natural gas prices.

Transmission can also play a role in alleviating these negative prices, just as it was the solution to the earlier, more localized occurrences of negative prices. In the case of Texas, there are pending proposals to increase power transfer capacity across the asynchronous ties between ERCOT and neighboring regions. This would provide numerous benefits to generators and consumers in both ERCOT and the neighboring regions. For example, when power prices are low in ERCOT they are often high elsewhere, so consumers in those other regions can buy cheaper electricity from ERCOT generators to the benefit of both regions, and the opposite occurs during the hours when power prices are high in ERCOT and low elsewhere. Much like the interstate highway system enables trade that provides billions of dollars in benefits, a stronger electric grid also saves consumers billions.

National Farmers Union: Windmills Have Direct Benefits for Farmers

In response to misleading anti-transmission editorial, Roger Johnson, President of the National Farmers Union to the pages of the Wall Street Journal to voice his support for wind energy development, and the great benefits it brings to American farmers and ranchers:

With 98%-99% of wind-farm land free for other uses, wind has little impact on farmers and ranchers.  [Critics ignore] the benefits of low-cost wind energy and the necessity of transmission projects to deliver wind’s consumer savings to ratepayers across the country.  Because wind power’s costs have fallen 66% in six years, wind energy is now one of the best ways to help American homeowners and businesses save money.  

In the long-held precedent of our country, eminent-domain capability has been granted to a variety of infrastructure projects for the public good—pipelines, rail lines and electricity transmission lines are all cases in point.

Wind power acts as a drought-resistant cash crop for family farmers and ranchers, returning nearly $200 million every year in land lease payments. In Missouri alone, rural landowners receive $1.4 million annually from these payments. Across the country land lease payments from wind total $195 million each year. Added to that are property tax revenues paid to local counties by wind-power farm developers, which rural communities use to build new schools, roads and health-care facilities.

With 98%-99% of wind-farm land free for other uses, wind has little impact on farmers and ranchers. In fact, it protects a critical resource for them during times of drought, saving 36.5 billion gallons of water, the equivalent of 275 million water bottles, every year.  The benefits in this case largely outweigh the costs.

Farmers and ranchers know well the tremendous benefit that wind development can bring to their operations and leaders like Mr. Johnson are helping spread the facts.

In the News: Rural Nebraska Lawmaker Sees Wind Energy as an Urgent Lifeline

By Karen Uhlenhuth; From Nebraska Energy News

Read the story online at:  http://midwestenergynews.com/2015/12/16/rural-nebraska-lawmaker-sees-wind-energy-as-an-urgent-lifeline/ 

Nebraska state Sen. Al Davis is a rancher, a longtime resident of rural Nebraska, a proponent of renewable energy, and a Republican. Now going into his fourth year as a state legislator, Davis views this as a propitious moment for his home state to convert much more its abundant wind into exportable energy.

Living in the Sandhills community of Hyannis, with a population of just under 200, he has witnessed the challenges that threaten sparsely populated rural America. His district, which is roughly twice the size of New Jersey in area, has fewer than 40,000 people, and that population is declining.

One way to reverse that trend, he believes, lies in the development of wind energy.

Midwest Energy News asked him to elaborate on his observations and his vision for Nebraska’s future.

Midwest Energy News: You’re a member of a rather small club – Republican supporters of clean energy. How did that happen?

Davis: I look at a lot of what I do in terms of what will benefit my district. I have a wind energy association – the Cherry County Wind Association – in my district. I’m very eager to see that develop.

What is the Cherry County Wind Association?

It’s a group of landowners who have gotten together their 400,000 acres, and their goal is to get wind energy developed in Cherry County. My district is very rural, and we are constantly fighting depopulation. We have this tremendous natural resource out there that should be developed. If it is, it might help to repopulate rural Nebraska.

If wind is going to be developed, we can do it in Nebraska, or we can let it happen somewhere else. There are really pretty significant property tax benefits to wind energy, and that is something we grapple with in Nebraska. We have extremely high property tax rates. Statewide, they average maybe second highest in the country.

Public education is the big driver of property taxes. As far as state government, we are 49th in terms of state funding of public education. So that means the vast majority of funding has to come from property taxes.

So you’re interested in wind energy primarily as an economic development tool, to bring in people?

Yes, western Nebraska is depopulating so quickly, and services are very hard to bring together. [Some] students drive 50 miles one way to to go to school. Wind energy could bring jobs and some stability to some of these areas of Nebraska.

Are you interested in solar energy as well?

Definitely. Amazingly enough, you wouldn’t think of western Nebraska as good solar territory. But because we have sunny days and dry air, there’s more potential there than you might think. I think solar really has a future.

Are you pursuing solar at all in the legislature?

Yes. When wind was developed in the state, everything with the turbine was classified as personal property, which depreciates very quickly. The worry was that we’d have an abundance (of tax revenue) the first few years, then it would be depreciated and there would be nothing left.

The legislature passed the nameplate capacity tax. That changed the way it’s taxed. (The property tax) is lower at first for the development company, but it stabilizes income for the taxing entities….over the life of the turbine.

Solar was not a part of that…..I introduced a bill last year…..We put that in place last year so solar now is treated the same as a wind turbine….It’s never good for a taxing entity to have a huge influx of taxes one year, and then have that depreciate out. Now, they always know what the tax will be.

What sort of clean-energy debate do you expect in the upcoming session?

I think there will be a bill to strip protections from public power. In Nebraska, if a project is built by anyone, public power has the right to say, “We want that project; we want to own that project.” That dampens the ability of developers to come in. There may be some discussion to eliminate that.

What is discouraged by that prerogative for public power?

I think it discourages development. If you want to build a project, you’re going to go to a state where there isn’t that regulation.

Is there much support in the Nebraska legislature for clean energy?

I think we’ve got a lot interest in it in Nebraska. We have had low power rates in Nebraska, and everybody was satisfied with the current arrangement. But rates have been climbing, and Nebraska is losing its distinction as low-rate state.

Iowa has a big wind industry even though its resource isn’t as good as ours. Kansas and Oklahoma have done a lot, and Colorado has a big wind industry. My colleagues are saying that if we don’t do something quickly, our opportunity will be gone. We’ll buy wind from other states.

One problem in Nebraska is we generate more energy than can consume much of the year, so it’s hard to prove a need for more energy. If we’re going to do anything, we have to look to the export market. That means we have to come up with a way to encourage transmission and remove barriers to transmission construction.

What barriers to you see out there?

The biggest barrier we have is that Nebraska is not a very populated state. We need to look to market that power elsewhere, whether it’s to the front range in Colorado or Kansas City or Chicago. Because of our location, transmission is going to be very costly. And turbines are getting more and more efficient all the time, so you can build in less-windy areas and get more energy.

If you were going to serve Chicago, you could build a turbine in rural Illinois and create as much energy (as in a windier place like Nebraska.) That’s a big problem for us. We have to think outside the box as far as how we’re going to get the transmission built.

Are you feeling the clock ticking?

I definitely think it’s a once-in-a-lifetime opportunity.

How hopeful are you that leaders in the state will do something about wind in time?

I am optimistic, but I’m a realist. We’re going to need a production tax credit, and….the rules and regulations that have inhibited development, those will have to go away.

And then I’d love to see – Berkshire Hathaway, I’m going to throw out a name – that’s the owner of most Nebraska wind energy – an entity like that has the resources to do transmission. If we could remove the restrictions, I think that would be viable. If we can get the transmission done, we can compete with anyone. It we wait, it’ll be too late. We’ll be the only state in the Great Plains that doesn’t have a significant portfolio of renewable resources.

I think the thing that would most quickly move Nebraska to a more renewable-friendly status is if we were to lose out on a high-tech industry that wants to go to a state with more green energy. Facebook was looking at Kearney (a city in central Nebraska) and someplace in Iowa (to develop a data center). They went to Iowa because Iowa had more green energy. That seemed to mobilize interest here that I didn’t see before.

Nothing drives economic change like a corporation saying, “We want something different.”