Wind Power Surge in Texas Curbing Utility Profits

[kristopher]

Wind Power Surge in Texas Curbing Utility Profits

Mark Chediak, Bloomberg
September 02, 2013

SAN FRANCISCO -- For the first time, Texas is connecting most of its wind farms to its largest cities. That’s bringing cheap electricity into the service area of Energy Future Holdings Corp., bad news to holders of $32 billion of the power company’s debt from the biggest-ever leveraged buyout.

What began as a trickle of power to Dallas and Austin from competitors’ windmills in West Texas has started flooding the market. The supply uses new transmission cables being stretched about 3,600 miles (5,800 kilometers) across the state in a $6.8 billion project set to be fully built by December.
Subsidized wind power together with natural gas that’s plentiful from shale drilling are curbing profit at Energy Future’s atomic and coal-fed power plants. That’s eroding value to banks and investors in the event of a bankruptcy. Creditors may have to fight over a shrinking pie of profit at the company formerly known as TXU, which was taken private for $48 billion.

“The transmission is finally there in Texas to bring all the wind power to the population centers and it’s a disaster for the generation companies,” Andy DeVries, an analyst at CreditSights Inc., said in a telephone interview.

Traditional power companies across the U.S. and Europe are struggling to compete in wholesale markets with newer generators supplying subsidized wind and solar energy. ...

http://www.renewableenergyworld.com/rea/news/article/2013/09/wind-power-surge-in-texas-curbing-utility-profits?cmpid=SolarNL-Tuesday-September3-2013

[gtar100]

1. Maybe traditional power companies should invest in alternative, non-polluting forms of energy

production instead of trying to destroy the new methods. But that would mean breaking with their conservative value system. I suspect it's going to be a fight with them to the bitter end since they can't seem to see beyond their quarterly reports. If they were innovative, they'd be investing their profits in new, cleaner alternatives instead of just pocketing it and using it to manipulate the market to their own selfish benefit. But fighting the change will lead to their own demise either way. Either these high pollution energy producers will kill us all or they will go out of business because they failed to read the writing on the wall that just so happens to be outside their quarterly peep view into the future.

[CRH]

2. I've been waiting for this to happen, ...

The 'privatized public utilities' of the 80's and 90's, will now struggle with their business models. Sometime in the future you will see through necessity, I.E. diminishing profit, power generation, transmission and rate structures will again return to public oversight, regulated by a PUC.

[ConcernedCanuk]

3. aaaaaaaawwwwwwwww

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CC

[Not Sure]

4. I have seen the construction and hope to see the results in my bill

I run trains between Fort Worth and the panhandle where many of these windmill farms are, so I've been able to see the construction progress. It's really something to see the turbines twist in the still night lit only by the moon and stars.

[GliderGuider]

5. Hang on a second there, lad!

When I did an off-the-cuff calculation and said it would take 2750 miles of new transmission lines to feed 5.6 GW of new capacity to a city of 1 million, you called it garbage.

Now these guys have built 3600 miles of line to feed 18.5 GW into a variety of pre-existing grids, at the same $2M/mile I estimated, and you're being all bobble-headed. What gives? I'm beginning to think it's not just my numbers you don't love any more, kristopher. :sniff:

[kristopher]

6. When someone can't tell the difference between the State of Texas and 1 small city...

...what else do you call their efforts but Garbage In Garbage Out?

[GliderGuider]

7. When someone doesn't understand the term "thought experiment"...

I thought that given the utterly dissimilar starting assumptions, the similarity in end results was rather striking.

[kristopher]

8. No, that *proves* how poor your effort was

[GliderGuider]

9. Ah. A close result proves poverty of effort. Got it.

nt

[kristopher]

10. As close as all of Texas. Right.

[GliderGuider]

11. What an unpleasant little homunculus

that is rolling around in your otherwise kind and generous post.

[CreekDog]

12. are you saying 2750 miles for 1 million people is the same as 3600 miles for 26 million?

obviously your point is to say these two are equivalent.

nonsense, but it is what you're saying.

[GliderGuider]

13. Nope. I used a completely different scenario.

One that involved putting a lot more new transmission line infrastructure. I postulated 250 miles of high-capacity lines for a million people, for an power installation that was essentially local. If we did a brain-dead prorating by population, that would result in 6700 miles for 26 million. Texas obviously has the opportunity to increase their transmission-line and wind-farm consolidation, so a 50% reduction in the pure long-haul distance seems reasonable.

Something tells me that there are more transmission lines than that involved, though, even just within the wind farm boundaries. 18.5 GW of wind power doesn't aggregate itself, after all.

My thought experiment was based more on the "power 100% of the USA with renewables by 2050" kind of approach favoured by some of the favourites. That would entail putting in more of the kinds of infrastructure I was speculating about, and less of the Tejas variety - IMO. The current "tape-a-bag-on-the-side" approach of adding more renewable power to existing grids doesn't give a good picture of where and how we want to end up, does it? Smart grid and all?