Shell, Luminant to Develop 3,000 MW Wind Farm
Suzanne McElligott
The Netherlands-based Shell WindEnergy, a subsidiary of Shell Oil Company and Luminant, a subsidiary of TXU Corp., in late July announced a joint development agreement for a 3,000 MW wind project in the Texas Panhandle and to work together on other renewable energy developments in Texas. Shell and Luminant will also explore the use of compressed air storage, in which excess power could be used to pump air underground for later use in generating electricity. This technology will further improve reliability and grid usage and becomes more economical with large-scale projects, such as proposed for Briscoe County.
Recent testimony by Shell before the Public Utility Commission of Texas demonstrated the Briscoe County project could deliver the lowest-cost wind energy for consumers. This low cost is driven by excellent wind resources and the comparatively lower cost to bring that energy to market from the Texas Panhandle region.
"Shell is constantly looking for solutions to deal with climate change and increasing our energy diversity. Wind is part of the answer. Our approach is a cost-effective solution for consumers," said John Hofmeister, president of Shell Oil Company.
"Luminant is committed to providing Texans with clean sources of energy, and this agreement with Shell is a real next step in delivering on that commitment" said Mike Childers, CEO of Luminant Development. "Luminant is already the state leader in wind-energy purchases, and co-developing this project would take us a long way toward our goal of doubling our portfolio."
Luminant is a competitive power generation business, including mining, wholesale marketing and trading, construction and development operations. Luminant has over 18,300 MW of generation in Texas, including 2,300 MW of nuclear and 5,800 MW of coal-fueled generation capacity. Luminant is also the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States.
Wind Energy in Public Power the U.S.
A new report by Standard & Poor's Rating Services entitled "The Forces Behind Growing U.S. Public Utility Interest in Wind Power" shows that although public power comprises a significant part of the industry (15.2% of total U.S. electricity sales in 2005), and is focused on renewable energy as part of their power portfolios, they currently own a very small share of U.S. wind projects (2% in 2006).
"Still, they often set portfolio standards for renewable energy initiatives, despite the fact that, unlike investor-owned utilities in many states, state laws don't require public power utilities to do so," Standard & Poor's credit analyst Peter Murphy said.
Wind energy has emerged as the leading option among renewable technologies due to its vast untapped potential, with widespread range of suitable sites; stable and increasingly competitive cost structure; the relatively short project construction timeframe; and the absence of carbon or other harmful emissions, S&P said in the report.
"However, while support for wind energy is strong, and we expect the development of capacity to continue at a rapid rate, numerous hurdles hinder the completion of energy producing wind projects," Murphy added.
--Suzanne McElligott