Renewable Energy: Chapter | 19 Wind and Solar ❖ Can Texans harness the wind and sun and even the jobs that go with these energy sources? 600-turbine development across 336,000 Introduction acres of West Texas. Financed by Chinese In late 2009, German utility giant E.ON banks, the development will feature new constructed the world’s largest wind farm in turbines made in China and will bring the tiny West Texas town of Roscoe. The 300 temporary construction jobs and 30 Roscoe wind farm has the capacity to produce permanent jobs to the area. Renewable 781.5 megawatts — enough electricity for energy in Texas is new — and it has already every home in Plano, McKinney and the been globalized. rest of the 265,000 households in Collin These giant wind projects illustrate County. The $1 billion project in Roscoe two key trends: Texas is emerging as took 21 months to complete and employed the capital of renewable energy, and 500 construction workers, who built 627 wind foreign companies are moving fast to take turbines on the fields of 300 property owners advantage. “People in Texas think it has — land that once pumped oil. got to be conventional energy or renewable The wind turbines of West Texas spin at energy. It’s not. It’s both,” said Michael 7 miles per hour. And one turbine produces Webber, an engineering professor at the about as much electricity as 350 households University of Texas at Austin and associate consume in a year. These economics are director of the Center for International attracting more wind turbines to the state, Energy and Environmental Policy. as Asian and European manufacturers of Webber is one of a growing number wind and solar technology push to sell of Texas energy industry observers and their products in the growing Texas energy insiders who think the Lone Star State market. For example, Lubbock will soon be is now poised to dominate a new energy home to giant 2.5-megawatt wind turbines economy, as renewable energy sources made by Samsung Heavy Industries of become more evenly distributed alongside South Korea. These new wind turbines traditional sources, such as oil, coal and are more powerful than the 1.5-megawatt natural gas. turbines that line the landscape of much of “We’re poised better than any other West Texas. Similar Asian-manufactured, state in a carbon-constrained world. Texas high-powered wind turbines are part of a can have more wind, solar and natural new wind farm in West Texas, which is gas than anywhere else. And we can make being developed by Austin-based Cielo money from that the same way we made Wind Power, one of the first companies to money from oil,” Webber said. “Change join the Texas wind industry a decade ago. freaks people out. Change doesn’t have to Cielo’s projects include a new $1.5 billion, freak us out.”

“We’re poised better than any other state in a carbon-constrained world. Texas can have more wind, solar and natural gas than anywhere else. And we can make money from that the same way we made money from oil. Change freaks people out. Change doesn’t have to freak us out.”

— Michael Webber, University of Texas at Austin CHAPTER 1519 | 129 engineers, electricians, marketers and | What’s Happening specially trained wind-energy workers. The Texas renewable energy industries Wind energy is also popular because are growing as they work to leverage the it doesn’t displace existing industry. benefits and limit the challenges presented Community leaders describe it as a value- by their energy sources. For instance, added business. The turbines take up only wind is a free fuel, it doesn’t pollute and it 100 square feet of land — about the size of doesn’t consume water. The West Texas a living room. Cattle usually graze around windy season is long, lasting from fall the giant turbines. And natural gas and oil to spring. Two of the best locations for wells are often spotted pumping out the producing wind energy in America are remaining fossil fuels near the turbines. As the Texas panhandle and West Texas. electricity transmission lines are developed, Still, neither wind nor solar energy is a West Texas community leaders expect the consistent energy source. The wind doesn’t number of wind turbines on the landscape blow all the time. The sun doesn’t shine all to increase. the time. And unlike portable and storable Solar energy also has benefits: it’s fuels, such as gasoline and coal, electricity plentiful, it’s free and it doesn’t cause is an instant fuel that is difficult to store. pollution. Some Texas companies are Despite its challenges, the renewable trying to capitalize on solar energy by energy sector is growing in Texas. Located changing the economics of the industry. about 200 miles west of Fort Worth, Nolan HelioVolt Corp. in Austin is trying to County is referred to as the wind industry eliminate the long-distance transmission capital of North America. The county constraints by placing solar panels directly not only has hundreds of wind turbines on consumers’ homes, factories and offices. across its pastoral landscape, but it also B. J. Stanbery, cofounder and chief has expertise in many facets of renewable strategy officer of HelioVolt, readily energy: Nolan County boasts a critical acknowledges that current solar energy mass of attorneys, technicians, title agents, technology generates electricity only when

130 | CHAPTER 19 the sun is shining and that battery storage Having supplemental energy during is expensive. To address this, HelioVolt working hours is attracting attention. In is working to develop small solar panels late 2009, the city of Austin and its utility that can be placed on any building to company, Austin Power, contracted to supplement other electricity sources. If the build a private solar farm outside the city. company’s products become popular with Gemini Solar Development will build a the mainstream public, then the company 30-megawatt solar farm on 320 acres by the can alter the business model of renewable end of 2011. The farm will supply enough energy and help make solar energy easy and electricity to the city to power about 5,000 affordable for consumers, he said. homes. HelioVolt recently opened an 85-worker factory in Austin to make thin glass panels | The Data filled with semiconductors that help convert rays of sun to electricity. The Texas, with its vast vistas of land over panels are about the size of a standard which wind blows under sunny skies, is roof shingle and can attach to the outside attracting companies from the solar and surface of a building. “Ultimately, the wind energy industries. In 2009, Texas supply chain for solar is going to change generated about 7,100 megawatts of dramatically,” Stanbery said. “Right now electricity via wind — or about 30% of all solar panels are installed by specialized wind energy in the nation. For Texans, technicians. In 5 to 10 years, solar panels about 5% of their electricity is coming will be part of the normal construction from wind. All of this makes Texas the process. It will be plug and play.” leading state for wind energy production, according to the American Wind Energy Currently, HelioVolt is shopping Association. for incentives to open its next factory, which will employ 200 workers. While In solar energy production, Texas ranks HelioVolt’s growth up to this point has sixth in the nation, generating about 1.7 been financed primarily through venture megawatts of solar energy — less than 1% capital and equity investments, the national of the solar energy in the nation as of 2007. credit crunch has limited those resources. Though small, this amount has more than To continue expanding, HelioVolt is doubled each year since 1998, according to looking to the U.S. Department of Energy the Energy Information Administration. for loan guarantees to help the company borrow money at 4.75% interest to fund | So What? upcoming expansion. “Here in Texas, we are still the central Stanbery is confident about the growth nervous system of the energy industry. prospects for the solar industry and Houston is still the energy capital of the companies such as HelioVolt as more world,” said Skip York, lead consultant at consumers discover the advantage of a Wood MacKenzie in Houston, a global supplemental yet direct energy source energy industry company. “Texans know during daylight hours. “Solar gives you more about energy than anybody. If Texas energy during the peak demand hours,” he does not become a major cog in the solar said. and wind industry, it’s because Texas

“Texans know more about energy than anybody. If Texas does not become a major cog in the solar and wind industry, it’s because Texas screwed up.”

— Skip York, Wood MacKenzie

CHAPTER 19 | 131 screwed up. Nobody is going to beat us to natural gas–fired power plant starts at $3 dominating the wind and solar industry; if billion, whereas the price for a wind or we don’t take advantage of it, then it’s our solar farm starts in the tens of millions, fault.” according to the U.S. Energy Information While the business case for renewable Administration. energy is still being defined, the renewable The low costs are thanks to newer energy industry is growing in Texas. technology, which has made wind turbines Though California pioneered wind more durable, easier to erect, cheaper to energy in the United States, Texas has maintain and less expensive than traditional used a “second mover advantage” to take power plants. Wind power now costs advantage of technological improvements about $2 million per megawatt to produce, and now take a dominant position. according to studies by the American Wind Much of the growth has been fueled Energy Association. For investors to see by federal stimulus money and tax financial viability, a modern wind farm credits, as well as by curious investors and needs to generate at least 20 megawatts. consumers, according to both supporters The average single wind turbine can and detractors of renewable energy. The generate about 1.5 megawatts. So, to start American Recovery and Reinvestment a farm and achieve financial viability, Act of 2009 (the stimulus plan) extended investors need to fund at least 13 turbines federal tax credits for alternative energy at an initial cost of about $40 million. With sources through 2012. The stimulus plan’s these lower barriers to entry, European and 30% tax credit for wind investments built Asian companies are entering the Lone Star on the alternative energy tax incentives State’s renewable energy market. of the Bill Clinton and George W. Bush Among the nation’s biggest buyers of administrations, which helped continue wind-generated power are Texas utilities, the momentum in the renewable energy including Luminant in Dallas, CPS industries. Energy in San Antonio, Reliant Energy in In February 2009, President Barack Houston, Austin Energy and the Lower Obama said that renewable energy Colorado River Authority in Austin. More entrepreneurs need to play a significant than 2,000 wind turbines are spinning in role in leading the United States away 40 communities across Texas to supply from its dependency on oil imports. “We electricity to those utilities — with many can remain the world’s leading importer of more on the way. This number doesn’t foreign oil, or we can become the world’s include the West Texas wind farms leading exporter of renewable energy,” discussed earlier. Obama said. “We can allow climate change Texas has also been stepping up to wreak unnatural havoc, or we can create its incentives for utilities to use solar- jobs preventing its worse effects.” generated power, including incentives for The cost of entering the renewable consumers who set up solar projects on energy field is lower than the cost of their property. These incentives became entering traditional energy industries. available to most Texans in 2010. The price tag to build a modern coal- or

Much of the growth has been fueled by federal stimulus money and tax credits, as well as by curious investors and consumers, according to both supporters and detractors of renewable energy.

132 | CHAPTER 19 Chapter 19 | Suggested Strategies

 Think Globally, Plan Regionally Abilene, Dallas and many small towns around Sweetwater, as well as in Europe and Asia. “As the rest of the nation drags its feet on renewable energy, Texas is moving forward,” Creating sustainable jobs in the renewable said Webber at the University of Texas. “And energy field, particularly in Texas, remains Texas could sell renewable energy outside the a critical and unresolved issue. Executives at state, but our electric grid is not hooked up Applied Materials publicly lamented that the outside the state. Texas is going to do for solar high-tech equipment the company designs what we’re already doing for wind. Solar has in Texas is used inside solar panels that are been held back by high prices for its technology, manufactured in China — and later sold in the but those prices are coming down really fast.” United States. As a result, American workers are not fully benefiting from rising American Market forces, along with select state and local demand for renewable energy. To address this, government policies, will certainly play a big role Applied Materials has a plan called fab2farm, in determining which renewable energy sources, which calls for a city or an existing high-tech if any, will flourish. manufacturing company to set up a factory A major focus of the alternative energy to build solar panels using components from industry is expanding the infrastructure. Applied Materials. The solar panels, which can Recently, construction began on electric be installed in local solar farms, would provide transmission lines to link rural West Texas to power to nearby cities, or they could be sold in San Antonio. The $5 billion cost of this project North America. — more than $1 million a mile — will be passed “We’ve lamented the loss of manufacturing along to Texas consumers for years. These new jobs in this country,” said Steve Taylor, director transmission lines will have a big impact on the of government affairs for Applied Materials. Texas wind industry because they can transmit “But this concept is about creating large-scale a whopping 18,500 megawatts of power, almost solar panel manufacturing and solar power for doubling the amount of wind-generated energy communities in this country. This could be in the nation, according to the American Wind localized manufacturing. We’d like to see the Energy Association. ‘Made in Texas’ brand on solar panels.” This is a significant increase in the state’s wind Federal and state incentives for wind and solar power capacity, and even more dramatic growth energy will expire in a few years. Executives in is possible. The Texas Panhandle offers even these industries say such incentives are vital to better winds than West Texas. Yet the Panhandle continued expansion in this country as well as still needs transmission line connections, as wind in Texas. The Texas renewable energy market proponent T. Boone Pickens pointed out. Such has been growing, thanks to sunny days, blowing infrastructure expansion is necessary for Texas winds and the creation of expertise in wind and utilities to diversify their electricity sources with solar energy. Continued growth of this industry more wind and solar energy in major metro depends on expansion of electric distribution, areas. adoption of more renewable energy by more A thriving wind and solar energy sector utility companies, expanded energy engineering also can attract new investment in Texas. programs in Texas universities and community Components for the wind turbines in West colleges, creative economic development Texas were built in factories in Round Rock, strategies and stepped-up talent development.

CHAPTER 19 | 133