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<strong>Texas</strong> <strong>Renewable</strong> <strong>Energy</strong><br />
Industry Report<br />
JULY 2012<br />
www.<strong>Texas</strong>WideOpenForBusiness.com<br />
<strong>Office</strong> <strong>of</strong> <strong>the</strong> Governor | Economic Development & Tourism
Contents<br />
Overview…………………………………………………………………. 1<br />
Wind <strong>Energy</strong>………………………………………………..………….. 10<br />
Solar <strong>Energy</strong>...….……………………………….……………………… 17<br />
Bi<strong>of</strong>uels & Biomass.………………………………………….…….. 24<br />
Key Terms<br />
This report references a few technical terms to describe energy and power.<br />
Power is <strong>the</strong> rate at which electricity flows, <strong>of</strong>ten measured in megawatts<br />
(MW), which is equal to 1,000 kilowatts (kW).<br />
1 MW <strong>of</strong> electricity is enough to power roughly 300 homes at a typical rate<br />
<strong>of</strong> usage.<br />
<strong>Energy</strong> is <strong>the</strong> total amount <strong>of</strong> electricity consumed over a period <strong>of</strong> time,<br />
<strong>of</strong>ten measured in megawatt-hours (MWh). British <strong>the</strong>rmal units (Btu) are<br />
also used to measure energy. 1 MWh is equal to 3.4 million Btu.<br />
The U.S. <strong>Energy</strong> Information Administration estimates <strong>the</strong> average <strong>Texas</strong><br />
home consumed 77 million Btu <strong>of</strong> energy in 2009, or 22.56 MWh.
Overview<br />
F<br />
or over a century, <strong>Texas</strong> has been an international<br />
leader in <strong>the</strong> oil and gas industry. In recent<br />
years, <strong>the</strong> state has built upon its energy<br />
experience and trained workforce to take <strong>the</strong> lead in<br />
renewable energy production and services. As a result,<br />
<strong>Texas</strong> is by far <strong>the</strong> top state in wind generation capacity<br />
and biodiesel production.<br />
The Lone Star State’s energy potential is among <strong>the</strong><br />
largest in <strong>the</strong> nation, with abundant wind, solar, and<br />
biomass resources found across <strong>the</strong> state’s geographically<br />
diverse regions.<br />
<strong>Texas</strong> ranks No. 1 in <strong>the</strong> nation<br />
for wind energy capacity<br />
and biodiesel production<br />
Ernst & Young ranked <strong>Texas</strong> No. 5 in <strong>the</strong> nation in its<br />
All <strong>Renewable</strong>s Index in February 2012. The Index<br />
accounts for a variety <strong>of</strong> factors to determine a state’s<br />
outlook for renewable production in terms <strong>of</strong> infrastructure,<br />
political climate, and technology factors,<br />
with particular emphasis on solar and wind energy.<br />
The state has developed a strong foundation in <strong>the</strong><br />
growing renewable energy industry. According to a<br />
report by The Pew Charitable Trusts, over 55,000<br />
Texans are employed in renewable energy sectors, and<br />
thousands more work in industries closely tied to <strong>the</strong><br />
renewable energy industry. <strong>Texas</strong>’ business climate<br />
encourages renewable technology innovation and<br />
commercialization, and <strong>the</strong> state is home to leading<br />
renewable energy research institutions.<br />
The <strong>Texas</strong> <strong>Energy</strong> Industry<br />
According to <strong>the</strong> U.S. <strong>Energy</strong> Information Administration<br />
(EIA), <strong>Texas</strong> is <strong>the</strong> leading state for overall<br />
energy production and consumption. The state is also<br />
<strong>the</strong> leading producer, importer, and refiner <strong>of</strong> oil and<br />
gas products. Innovation in <strong>the</strong> natural gas industry<br />
has fur<strong>the</strong>r solidified <strong>Texas</strong>’ role as <strong>the</strong> nation’s energy<br />
leader over <strong>the</strong> past few years. Oil and gas will<br />
always be an important foundation <strong>of</strong> <strong>the</strong> energy industry<br />
and <strong>the</strong> <strong>Texas</strong> economy as a whole.<br />
<strong>Renewable</strong> energy is a vital component <strong>of</strong> <strong>Texas</strong>’ all<strong>of</strong>-<strong>the</strong>-above<br />
strategy for energy independence and<br />
leadership. Reliance on a single source <strong>of</strong> energy can<br />
threaten energy security and heighten price volatility.<br />
<strong>Energy</strong> diversification across different sectors (fossil<br />
fuel, nuclear, and renewable) and geographies (high<br />
plains wind and coastal wind, for example) can help<br />
make <strong>Texas</strong> energy more robust and flexible. A diverse<br />
energy portfolio can also better respond to<br />
changing economic and geopolitical conditions.<br />
<strong>Texas</strong> <strong>Renewable</strong> <strong>Energy</strong> Consumption 2010<br />
Biomass<br />
20%<br />
Wind 57%<br />
Ethanol<br />
20%<br />
Source: U.S. <strong>Energy</strong> Information Administration<br />
1<br />
Hydro 2.7%<br />
Geo<strong>the</strong>rmal<br />
0.5%<br />
Solar 0.2%
OVERVIEW<br />
<strong>Renewable</strong> <strong>Energy</strong> in <strong>Texas</strong><br />
While renewable energy has a relatively small impact<br />
on energy consumption in <strong>Texas</strong>, its share is growing<br />
rapidly. <strong>Renewable</strong> sources accounted for 3.9% <strong>of</strong> all<br />
energy consumed in <strong>Texas</strong> in 2010, according to <strong>the</strong><br />
EIA. This ratio has increased substantially over <strong>the</strong><br />
past decade as renewable energy sources have expanded,<br />
while total statewide energy consumption has remained<br />
steady over <strong>the</strong> past 15 years.<br />
Wind generation in <strong>the</strong> state was twelve times larger<br />
in 2011 than 2002, and wind’s share <strong>of</strong> <strong>the</strong> <strong>Texas</strong> Interconnection<br />
Region’s electric power generation was<br />
10.2% over <strong>the</strong> first six months <strong>of</strong> 2012. Wind energy<br />
now comprises over half <strong>of</strong> <strong>Texas</strong>’ renewable energy<br />
usage, followed by biomass and bi<strong>of</strong>uels (see chart on<br />
page 1).<br />
<strong>Energy</strong> Consumption<br />
(Trillion BTU)<br />
2<br />
400<br />
300<br />
200<br />
100<br />
All <strong>Renewable</strong><br />
0<br />
Wind<br />
1985 1990 1995 2000 2005 2010<br />
The Lady Bird Johnson Middle School became <strong>the</strong><br />
largest net-zero school in <strong>the</strong> nation when it opened<br />
in 2011 in Irving, <strong>Texas</strong>. Net-zero facilities generate as<br />
much energy as <strong>the</strong>y consume over <strong>the</strong> course <strong>of</strong> a<br />
year. To achieve this goal, <strong>the</strong> school was designed<br />
with energy efficiency in mind and renewable energy<br />
generation on-site. Of <strong>the</strong><br />
school’s $30 million cost, only<br />
$3.7 million was used specifically<br />
for <strong>the</strong> net-zero program.<br />
The school uses geo<strong>the</strong>rmal<br />
HVAC pumps, passive solar<br />
lighting, efficient insulation,<br />
advanced controls to conserve<br />
energy. As a result, <strong>the</strong> facility<br />
The 2000s was <strong>the</strong> decade wind accelerated in <strong>Texas</strong>,<br />
and solar deployment has <strong>the</strong> potential to be similarly<br />
meteoric over <strong>the</strong> current decade. According to ER-<br />
COT and <strong>the</strong> Interstate <strong>Renewable</strong> <strong>Energy</strong> Council,<br />
statewide solar generation increased by over 700%<br />
from 2009 to 2011 alone. <strong>Texas</strong> currently ranks No.<br />
13 nationally in installed solar photovoltaic capacity.<br />
The strength <strong>of</strong> <strong>the</strong> <strong>Texas</strong> biomass and bi<strong>of</strong>uels industry<br />
lies in <strong>the</strong> state’s natural resources, skilled<br />
workforce, and existing petroleum-based infrastructure.<br />
More biodiesel is made in <strong>Texas</strong> than in any o<strong>the</strong>r<br />
state, and biomass facilities harvest usable energy<br />
from landfills, wastewater, and byproducts <strong>of</strong> forestry,<br />
livestock, and agriculture across <strong>the</strong> state.<br />
<strong>Texas</strong> <strong>Renewable</strong> <strong>Energy</strong> Growth 1985-2010<br />
Source: U.S. <strong>Energy</strong> Information Administration<br />
<strong>Texas</strong> Middle School Demonstrates Potential <strong>of</strong> <strong>Renewable</strong> <strong>Energy</strong><br />
requires half as much energy as a typical school <strong>of</strong> 800<br />
to 1,000 students. Most <strong>of</strong> this energy will be generated<br />
on-site from renewable sources. 583 kW <strong>of</strong> photovoltaic<br />
solar panels are located on <strong>the</strong> ro<strong>of</strong>top, and<br />
twelve 2.4 kW wind turbines are on <strong>the</strong> property.<br />
When <strong>the</strong> school generates surplus energy, it is sold<br />
back to <strong>the</strong> grid.<br />
The school’s net-zero program<br />
is more than a cost-saving<br />
measure; it is also an educational<br />
tool integrated into <strong>the</strong><br />
curriculum. LBJ Middle School<br />
students learn how energy<br />
works in an unique, hands-on<br />
way.
Electricity Market<br />
and Distribution<br />
The <strong>Texas</strong> Electric Grid<br />
In <strong>the</strong> continental United States, <strong>the</strong> electricity system<br />
consists <strong>of</strong> three regions, <strong>the</strong> Eastern Interconnection,<br />
<strong>the</strong> Western Interconnection, and <strong>the</strong> <strong>Texas</strong> Interconnection.<br />
Operated by <strong>the</strong> Electric Reliability Council<br />
<strong>of</strong> <strong>Texas</strong> (ERCOT), <strong>the</strong> <strong>Texas</strong> Interconnection is separated<br />
from <strong>the</strong> rest <strong>of</strong> <strong>the</strong> nation, making <strong>Texas</strong> <strong>the</strong><br />
only mainland state with its own grid. As a result, <strong>the</strong><br />
utilities within ERCOT are exempt from most federal<br />
regulation, making <strong>the</strong> <strong>Texas</strong> energy market a<br />
straightforward market in which to do business.<br />
ERCOT is a membership-based, non-pr<strong>of</strong>it corporation<br />
whose members include electric consumers, utilities,<br />
generators, and transmission providers. ERCOT<br />
works to ensure generation, transmission, and frequency<br />
regulation services are available to meet <strong>the</strong><br />
state’s energy needs. ERCOT is subject to oversight<br />
by <strong>the</strong> Public Utility Commission <strong>of</strong> <strong>Texas</strong> (PUC), a<br />
state agency responsible for monitoring <strong>the</strong> electric<br />
and telecommunications industries in <strong>the</strong> state.<br />
2011 ERCOT Generation by Fuel Type<br />
Coal<br />
39.0%<br />
Natural<br />
Gas<br />
40.4%<br />
Nuclear<br />
11.9%<br />
Wind<br />
8.5%<br />
Source: ERCOT<br />
Hydro<br />
0.2%<br />
O<strong>the</strong>r<br />
0.2%<br />
SPP: Southwest Power Pool<br />
SERC: Sou<strong>the</strong>ast Electric Reliability Council<br />
WECC: Western Electricity Coordinating Council<br />
OVERVIEW<br />
Source: PUC<br />
As <strong>the</strong> map above shows, ERCOT’s <strong>Texas</strong> Interconnection<br />
Region covers 75% <strong>of</strong> <strong>the</strong> state’s landmass<br />
and 85% <strong>of</strong> <strong>the</strong> electrical load. The 23 million Texans<br />
within <strong>the</strong> ERCOT region consumed 333,875 gigawatt<br />
-hours (GWh) <strong>of</strong> electricity in 2011.<br />
The ERCOT region currently has about 84,000 MW<br />
<strong>of</strong> installed generation capacity from 550 generators,<br />
including 9,600 MW <strong>of</strong> wind installations. In 2011,<br />
79.4% <strong>of</strong> energy generated came from fossil fuels<br />
(natural gas and coal). Nuclear and wind generation<br />
were also significant contributors (see chart below).<br />
In 1999, <strong>the</strong> <strong>Texas</strong> Legislature restructured <strong>the</strong> state’s<br />
electric industry and allowed electricity users to begin<br />
choosing <strong>the</strong>ir Retail Electricity Provider (REP). In<br />
2002, <strong>the</strong> law was enacted, thus deregulating <strong>the</strong> <strong>Texas</strong><br />
electricity market. Deregulation has fostered competition<br />
among REPs, driving down costs and improving<br />
service. Deregulation also allows customers to<br />
receive renewable energy if <strong>the</strong>y wish. At least 26<br />
REPs in <strong>Texas</strong> <strong>of</strong>fer a 100% renewable plan to <strong>the</strong>ir<br />
customers as an option.<br />
3
OVERVIEW<br />
State Government<br />
Initiatives<br />
<strong>Renewable</strong> Portfolio Standard<br />
Adopted in 1999, <strong>the</strong> <strong>Texas</strong> <strong>Renewable</strong> Portfolio<br />
Standard (RPS) required 2,000 MW <strong>of</strong> new renewable<br />
energy capacity to be installed statewide by 2009. The<br />
RPS is administered by <strong>the</strong> PUC. In August 2005, <strong>the</strong><br />
<strong>Texas</strong> Legislature extended <strong>the</strong> RPS to expand <strong>the</strong><br />
state's generating capacity from renewable energy<br />
sources to 5,880 MW by 2015 and included a target <strong>of</strong><br />
10,000 MW by 2025, with 500 MW coming from<br />
non-wind sources. The state’s installed capacity<br />
reached <strong>the</strong> 10,000-MW target in early 2010—15<br />
years ahead <strong>of</strong> schedule.<br />
The legislation also established requirements for electric<br />
utilities and o<strong>the</strong>r retail electric providers to serve<br />
a specified amount <strong>of</strong> customer demand with sources<br />
<strong>of</strong> renewable electricity. Thirty Seven states now have<br />
RPS laws in place, but <strong>the</strong> <strong>Texas</strong> RPS has become one<br />
<strong>of</strong> <strong>the</strong> most effective and successful in <strong>the</strong> nation.<br />
<strong>Texas</strong> reached its renewable portportfolio<br />
target 15 years early<br />
Business Incentives<br />
In 2003, <strong>the</strong> <strong>Texas</strong> Legislature authorized <strong>the</strong> $295<br />
million <strong>Texas</strong> Enterprise Fund (TEF), a “deal closing”<br />
fund created to attract businesses and new jobs to <strong>Texas</strong>.<br />
The TEF was reauthorized most recently in 2011.<br />
Through this fund, <strong>the</strong> state has invested over $4.7<br />
4<br />
<strong>Renewable</strong> Property Tax Exemption<br />
Residential, commercial, and industrial renewable<br />
energy devices are exempt from property tax under<br />
<strong>Texas</strong> law. This exemption is applicable to<br />
most renewable technologies, including solar,<br />
wind, and biomass.<br />
million in renewable energy-related projects that are<br />
expected to create over 900 jobs.<br />
<strong>Renewable</strong> Franchise Tax Deductions<br />
Companies solely engaged in manufacturing, selling,<br />
or installing solar or wind devices are exempt<br />
from <strong>the</strong> <strong>Texas</strong> franchise tax. O<strong>the</strong>r businesses<br />
that install solar or wind energy systems are eligible<br />
for a franchise tax deduction <strong>of</strong> 10% <strong>of</strong> <strong>the</strong><br />
system’s cost.<br />
The <strong>Texas</strong> Emerging Technology Fund (TETF) was<br />
created by <strong>the</strong> <strong>Texas</strong> Legislature in 2005 to provide<br />
<strong>Texas</strong> with an advantage in <strong>the</strong> research, development,<br />
and commercialization <strong>of</strong> emerging technologies. The<br />
TETF was reauthorized most recently in 2011. To<br />
date, <strong>the</strong> TETF has awarded nearly $44 million to<br />
renewable energy-related projects, spanning technologies<br />
such as solar cells, algae bi<strong>of</strong>uels, and advanced<br />
batteries. These investments are intended to create<br />
long-term economic benefits to <strong>the</strong> state through investments<br />
in early-stage technology companies, regional<br />
innovation centers, and academic research recruitment.<br />
See <strong>the</strong> table on <strong>the</strong> following page for<br />
more information.<br />
There are a number <strong>of</strong> sector-specific state government<br />
initiatives, such as <strong>the</strong> <strong>Texas</strong> Bi<strong>of</strong>uels Tax Exemption,<br />
which are discussed in <strong>the</strong> wind, solar, and<br />
biomass sections <strong>of</strong> this report on pages 14, 22, and<br />
28.
<strong>Texas</strong> Emerging Technology Fund<br />
<strong>Renewable</strong> <strong>Energy</strong>-Related Awards<br />
Recipient Technology Award<br />
21-Century Silicon Polysilicon $3,500,000<br />
ActaCell <strong>Energy</strong> Storage $1,000,000<br />
Algae Bio Fuels Consortium Research $4,025,000<br />
BetaBatt <strong>Energy</strong> Storage $500,000<br />
Center for Commercialization<br />
<strong>of</strong> Electric Technologies<br />
Research $500,000<br />
EQMA Biomass $250,000<br />
Faradox <strong>Energy</strong> Storage <strong>Energy</strong> Storage $1,000,000<br />
Ideal Power Converters Inverters $1,000,000<br />
KLD <strong>Energy</strong> Technologies Electric Motors $2,800,000<br />
Lynntech Batteries $600,000<br />
National Wind Resource Ctr. Research $8,400,000<br />
OptiSense Smart Grid $1,500,000<br />
Photon8 Algae Bi<strong>of</strong>uels $1,000,000<br />
SolarBridge Technologies Inverters $1,500,000<br />
Solarno Solar Cells $1,000,000<br />
Sunrise Ridge Algae Algae Bi<strong>of</strong>uels $250,000<br />
Superconductivity Applied<br />
Research Hub<br />
Research $3,675,000<br />
<strong>Texas</strong> Bio<strong>Energy</strong> Alliance Research $3,412,500<br />
<strong>Texas</strong> Micropower <strong>Energy</strong> Capture $750,000<br />
Terrabon Inc. Biomass $2,750,000<br />
TurboTrac USA<br />
Power<br />
Transmissions<br />
$2,000,000<br />
TXL Group <strong>Energy</strong> Capture $500,000<br />
Xtreme Power <strong>Energy</strong> Storage $2,000,000<br />
TOTAL $43,912,500<br />
Outlook for <strong>Texas</strong><br />
<strong>Renewable</strong> <strong>Energy</strong><br />
OVERVIEW<br />
While renewable energy has grown rapidly in <strong>Texas</strong>,<br />
<strong>the</strong> industry is still young with much room for fur<strong>the</strong>r<br />
growth. Some renewable technologies are not yet<br />
price competitive with traditional fossil fuel generation.<br />
The recent extraordinary growth in shale gas<br />
recovery technology has driven natural gas prices<br />
from a peak <strong>of</strong> $13.32 in mid-2008 to under $2.00 per<br />
million British Thermal Units (mmBtu) in April 2012.<br />
Since natural gas prices are <strong>the</strong> primary driver <strong>of</strong> electricity<br />
pricing in <strong>Texas</strong>, it has become more difficult<br />
for renewable energy to achieve cost parity. Fur<strong>the</strong>r<br />
commercialization <strong>of</strong> renewable energy depends on<br />
continued research and development to lower costs,<br />
improve efficiency, and streng<strong>the</strong>n infrastructure.<br />
As renewable energy generation, especially wind,<br />
continues to advance, <strong>the</strong> electric infrastructure must<br />
evolve to allow growth to continue. The success <strong>of</strong> <strong>the</strong><br />
state’s RPS and wind industry has led to emerging<br />
constraints in transmission capacity. <strong>Texas</strong> wind resources<br />
are greatest in West <strong>Texas</strong>, far from <strong>the</strong> main<br />
sources <strong>of</strong> demand in <strong>the</strong> eastern half <strong>of</strong> <strong>the</strong> state.<br />
Wea<strong>the</strong>r patterns and wind gusts cause fluctuations in<br />
output. Fur<strong>the</strong>rmore, West <strong>Texas</strong> wind blows hardest<br />
at night when demand and prices are low, but peak<br />
demand is during <strong>the</strong> day. In short, wind blows intermittently<br />
in <strong>the</strong> wrong places at <strong>the</strong> wrong times.<br />
In response to <strong>the</strong> challenges outlined above, <strong>the</strong> PUC<br />
collaborated with ERCOT to establish five Competitive<br />
<strong>Renewable</strong> <strong>Energy</strong> Zones (CREZs) in West<br />
<strong>Texas</strong>. The transmission upgrades necessary to relieve<br />
west-east congestion and transmit larger amounts <strong>of</strong><br />
wind power from <strong>the</strong> zones to <strong>the</strong> more populous areas<br />
<strong>of</strong> East <strong>Texas</strong> are scheduled to be completed in<br />
2013.<br />
Utilities in ERCOT are planning $8.7 billion in transmission<br />
improvements over <strong>the</strong> next five years, including<br />
<strong>the</strong> CREZ projects. Much <strong>of</strong> this investment is<br />
intended to support fur<strong>the</strong>r wind energy integration.<br />
5
OVERVIEW<br />
Utilities in ERCOT have invested $6.6 billion in transmission<br />
improvements since 1999, including $870<br />
million since 2010.<br />
In addition to infrastructure projects, emerging technologies<br />
can provide cost effective ways to maximize<br />
<strong>the</strong> state’s energy assets as patterns <strong>of</strong> generation and<br />
transmission change. Increased renewable energy capacity<br />
requires new ways to manage both peak power<br />
demand and short term fluctuations in voltage (also<br />
called ancillary services), functions currently performed<br />
by standby natural gas generators. Demand<br />
response management, energy storage, and smart grid<br />
technology are three alternatives to replace this fossil<br />
fuel-based reserve capacity.<br />
Under demand response management, participating<br />
consumers agree to curtail electricity use when <strong>the</strong><br />
grid’s capacity is stressed. Incentives are available to<br />
large electricity users in <strong>the</strong> ERCOT market to participate<br />
in demand response programs to compensate<br />
<strong>the</strong>m for <strong>the</strong> inconvenience or lost revenue to <strong>the</strong>ir<br />
operations. ERCOT currently has 2,400 MW <strong>of</strong> demand<br />
in <strong>the</strong>ir demand response program from 200<br />
facilities, and is currently working to expand <strong>the</strong> program’s<br />
enrollment to increase <strong>the</strong> grid’s flexibility.<br />
Utility-scale energy storage technology is also gaining<br />
a lot <strong>of</strong> interest in <strong>Texas</strong>. <strong>Energy</strong> storage systems<br />
can mitigate intermittency by absorbing short-term<br />
fluctuations in renewables output so that customers<br />
can receive reliable electric service. They can also<br />
store excess energy for later use when demand is higher.<br />
There are a wide variety <strong>of</strong> energy storage technologies<br />
currently in use or undergoing research.<br />
In 2012, New Mexico-based Chamisa <strong>Energy</strong> announced<br />
plans to build a 270 MW compressed air<br />
energy storage facility in <strong>the</strong> <strong>Texas</strong> Panhandle near<br />
Amarillo. The project will use <strong>of</strong>f-peak wind energy<br />
to inject compressed air into underground salt caverns.<br />
When <strong>the</strong> stored energy is needed for peak demand or<br />
ancillary services, <strong>the</strong> air is released, driving a turbine<br />
generator. Slated to come online in 2014, <strong>the</strong> project is<br />
strategically located along a CREZ transmission line<br />
currently under construction.<br />
Like renewable generation itself, energy storage needs<br />
to be efficient, economical, and well integrated into<br />
<strong>the</strong> grid. Regulatory hurdles are also being cleared. In<br />
March 2012, <strong>the</strong> PUC adopted a set <strong>of</strong> rules designed<br />
to encourage energy storage investment in <strong>Texas</strong>. <strong>Energy</strong><br />
storage facilities can now buy and sell electricity<br />
at wholesale rates, thus allowing <strong>the</strong>m to competitively<br />
service <strong>the</strong> grid as dispatchable plants for both ancillary<br />
services and longer term energy storage.<br />
Demand response, energy storage, and many o<strong>the</strong>r<br />
grid management tools rely on smart grid technology<br />
to enable <strong>the</strong>ir effectiveness. Based on advances in<br />
power electronics and digital communications, smart<br />
grid technology is <strong>the</strong> brain that enables far-flung facilities<br />
on <strong>the</strong> grid to communicate and coordinate<br />
actions with one ano<strong>the</strong>r. According to <strong>the</strong> Environ-<br />
Xtreme Power: A <strong>Texas</strong>-based Pioneer in <strong>Energy</strong> Storage<br />
Xtreme Power, which received a $2 million TETF award in 2007, is making headlines. The Kyle, <strong>Texas</strong>-based<br />
company makes battery energy storage systems for power utilities, wind farms, and large manufacturers. In<br />
2011, Xtreme power built a 15 MW battery system that supports an <strong>of</strong>fshore wind farm near Oahu, Hawaii.<br />
Ano<strong>the</strong>r 10 MW system is under construction on Maui.<br />
In that same year, Xtreme Power won a $44 million contract to<br />
build a 36 MW battery system in conjunction with Duke <strong>Energy</strong>’s<br />
Notrees Wind Farm near Odessa, <strong>Texas</strong>. Xtreme Power’s<br />
large battery systems will provide ancillary services and store<br />
wind energy for distribution back into <strong>the</strong> grid during <strong>the</strong> day<br />
when demand for power is much higher. This battery system<br />
will be one <strong>of</strong> <strong>the</strong> largest <strong>of</strong> its kind in <strong>the</strong> world. Xtreme Power<br />
employs over 180 people and has plans to expand nationally.<br />
6
mental Defense Fund, <strong>Texas</strong> leads <strong>the</strong> nation in smart<br />
meter deployment, with over five million advanced<br />
meters within <strong>the</strong> ERCOT region. In 2012, ERCOT<br />
was able to improve wind integration with <strong>the</strong> aid <strong>of</strong><br />
smart grid technology (see factbox below).<br />
Research & Development<br />
Rendering Courtesy UTSA<br />
<strong>Texas</strong> businesses and institutions are key drivers <strong>of</strong><br />
U.S. research and development activity in <strong>the</strong> renewable<br />
energy sector. <strong>Texas</strong> ranks No. 6 in <strong>the</strong> nation in<br />
clean energy patents with 214 from 2002 to 2011,<br />
according to intellectual property law firm HRFM.<br />
Additionally, <strong>Texas</strong> ranks No. 4 in <strong>the</strong> nation for overall<br />
venture capital investment in 2010, according to<br />
<strong>the</strong> National Venture Capital Association. <strong>Energy</strong> and<br />
biotech accounted for 41% <strong>of</strong> this investment value.<br />
The Austin Technology Incubator (ATI) at <strong>the</strong> IC 2<br />
Institute at The University <strong>of</strong> <strong>Texas</strong> at Austin (UT-<br />
Austin) is home to ATI’s Clean <strong>Energy</strong> Incubator<br />
(CEI). One <strong>of</strong> <strong>the</strong> businesses currently at <strong>the</strong> CEI is<br />
ActaCell, an early stage lithium-ion battery technology<br />
company in which <strong>the</strong> TETF has invested.<br />
The San Antonio Clean <strong>Energy</strong> Incubator (SACEI)<br />
opened its doors in May 2011 to foster business activity<br />
in <strong>the</strong> renewable energy sector. SACEI is a part <strong>of</strong><br />
<strong>the</strong> University <strong>of</strong> <strong>Texas</strong> at San Antonio’s (UTSA)<br />
Sustainable <strong>Energy</strong> Research Institute, which played a<br />
role in developing a ro<strong>of</strong>top solar array at UTSA for<br />
research and demonstration purposes.<br />
Since its foundation in 1999, <strong>the</strong> Houston Technology<br />
Center (HTC) has supported 250 early stage technology<br />
businesses, including several in <strong>the</strong> renewable<br />
energy sector. The HTC’s current portfolio includes<br />
companies interested in algae-based bi<strong>of</strong>uels, residential-scale<br />
wind turbines, and in-flow hydroelectric<br />
generators.<br />
OVERVIEW<br />
Pecan Street Inc. is a research and development organization<br />
affiliated with UT-Austin established in<br />
2009. The organization takes a multifaceted approach<br />
to clean energy with a smart grid demonstration project,<br />
a research consortium involving several Fortune<br />
500 companies, and a technology commercialization<br />
lab currently under construction.<br />
The interdisciplinary <strong>Energy</strong> Institute at UT-Austin<br />
was founded in 2009 to focus university research on<br />
energy storage, carbon capture and storage, artificial<br />
photosyn<strong>the</strong>sis, and o<strong>the</strong>r energy technologies. One<br />
recent carbon-based nanotechnology project at <strong>the</strong><br />
institute investigated activated grapheme supercapacitors,<br />
a fast-discharging energy storage device.<br />
One <strong>of</strong> <strong>the</strong> first nanotechnology centers in <strong>the</strong> world is<br />
located in Houston, <strong>Texas</strong>. Founded in 1993, <strong>the</strong><br />
Richard E. Smalley Institute for Nanoscale Science<br />
and Technology at Rice University pioneers wideranging<br />
research and commercialization efforts in<br />
nanotechnology, including those with energy applications.<br />
One such nanotech innovation from <strong>the</strong> Smalley<br />
Institute is a quantum wire capable <strong>of</strong> transmitting<br />
electricity across long distances without suffering<br />
transmission losses.<br />
ERCOT Smart Grid Technology<br />
Enhances Wind Integration<br />
In March 2012, ERCOT implemented its new Transient<br />
Stability Analysis Tool, which helps manage <strong>the</strong> flow <strong>of</strong><br />
electricity across <strong>the</strong> state in real time. This smart grid<br />
technology helps ERCOT maximize <strong>the</strong> potential wind<br />
generation capacity in <strong>the</strong> state.<br />
“In <strong>the</strong> past, we’ve had some slack built into some <strong>of</strong><br />
our transmission limits because <strong>the</strong>se limits had to be<br />
set well in advance,” said Kent Saath<strong>of</strong>f, director <strong>of</strong> grid<br />
operations and system planning. “The new tool runs an<br />
analysis on real-time conditions every 30 minutes so it<br />
gives us a more fine-tuned analysis.”<br />
In <strong>the</strong> two weeks following implementation, ERCOT’s<br />
maximum wind output exceeded <strong>the</strong> previous record<br />
set in October 2011 five times. Set on June 19 2012, <strong>the</strong><br />
new daily record for <strong>Texas</strong> wind generation is 8,368<br />
MW.<br />
7
OVERVIEW<br />
Major Companies<br />
Leading <strong>Renewable</strong> <strong>Energy</strong> Companies with Operations in <strong>Texas</strong><br />
Company Name<br />
Primary<br />
Location(s)<br />
Type Details<br />
TECO-Westinghouse Round Rock Wind Wind turbine manufacturer<br />
Applied Materials Austin Solar Semiconductor machinery manufacturer<br />
MEMC Pasadena Solar Granular polysilicon manufacturer<br />
Molded Fiber Glass<br />
Companies<br />
Gainesville Wind Windmill blades manufacturer<br />
Alstom Wind Amarillo Wind Wind nacelles manufacturer<br />
Duke <strong>Energy</strong><br />
San Antonio,<br />
West <strong>Texas</strong><br />
Wind, Solar<br />
RES-Americas Austin, Statewide Wind, Solar<br />
BP Alternative <strong>Energy</strong> Houston,<br />
Statewide<br />
<strong>Renewable</strong> Bi<strong>of</strong>uels Inc Houston,<br />
Port Neches<br />
White <strong>Energy</strong><br />
Dallas, Hereford,<br />
Plainview<br />
Wind,<br />
Bi<strong>of</strong>uels<br />
Operates solar farm in San Antonio,<br />
three wind farms in <strong>Texas</strong><br />
Operates 15 wind farms in <strong>Texas</strong>,<br />
solar farm near Austin<br />
Operates 4 wind farms in <strong>Texas</strong>,<br />
Alternative <strong>Energy</strong> HQ in Houston<br />
Bi<strong>of</strong>uels Largest biodiesel producer in <strong>Texas</strong><br />
Bi<strong>of</strong>uels Largest ethanol producer in <strong>Texas</strong><br />
Green Earth Fuels Houston Bi<strong>of</strong>uels Biodiesel producer<br />
Royal Dutch Shell Houston Bi<strong>of</strong>uels Advanced bi<strong>of</strong>uels pilot plant in Houston<br />
NextEra <strong>Energy</strong><br />
Resources<br />
E.ON Climate &<br />
<strong>Renewable</strong>s<br />
Horizon Wind <strong>Energy</strong><br />
Element Markets<br />
Statewide Wind Operates 15 wind farms in <strong>Texas</strong><br />
Statewide Wind Operates 8 wind farms in <strong>Texas</strong><br />
Houston,<br />
Statewide<br />
Houston,<br />
Stephenville<br />
Wind Wind Developer, HQ in Houston<br />
Biomass<br />
Operates livestock waste-to-biogas<br />
facility in Stephenville<br />
SunEdison San Antonio Solar Solar farm developer<br />
Xtreme Power Kyle Storage Utility-scale energy storage manufacturer<br />
Green Mountain Austin Utility 100% renewable retail energy provider<br />
Reliant Houston Utility Operates four landfill gas sites in Houston<br />
8<br />
Representative sample only.
<strong>Energy</strong><br />
Workforce<br />
Employment<br />
<strong>Texas</strong> ranked No. 2 nationally with over 55,000 renewable<br />
energy workers, according to a 2009 report<br />
by The Pew Charitable Trusts. These jobs span a number<br />
<strong>of</strong> industries, from wind turbine maintenance to<br />
semiconductor manufacturing.<br />
Not only does <strong>Texas</strong> have a large number <strong>of</strong> renewable<br />
energy-related workers, but job growth is expected<br />
to remain strong over <strong>the</strong> next decade. According to a<br />
2010 report by <strong>the</strong> Cynthia and George Mitchell<br />
Foundation, <strong>the</strong> expanding wind and solar energy industries<br />
are projected to add 6,000 jobs in <strong>Texas</strong> per<br />
year through 2020.<br />
Over 1,300 <strong>Texas</strong> companies employ nearly 100,000<br />
workers in industries directly and indirectly related to<br />
renewable energy in 2011. These workers are highly<br />
skilled and well paid, earning an average annual salary<br />
<strong>of</strong> $84,426, which is 67% above <strong>the</strong> state average. The<br />
table below shows employment statistics for selected<br />
industry areas related to renewable energy.<br />
<strong>Renewable</strong> <strong>Energy</strong>-Related Employment in <strong>Texas</strong><br />
Fourth Quarter 2011<br />
Sector (Industry Code) Firms Employees<br />
Electric Power Generation (22111)<br />
-Wind Electric Power Generation (221115)<br />
<strong>Texas</strong>’ experience in energy runs deep. In addition to<br />
abundant natural resources, <strong>the</strong> state’s workforce cluster<br />
has decades <strong>of</strong> experience in energy-related land<br />
and project development, industrial scalability, and<br />
energy trading. While most <strong>of</strong> this know-how developed<br />
in traditional energy sectors, in recent years <strong>the</strong><br />
state’s energy industry has applied its knowledge <strong>of</strong><br />
traditional oil and gas to expanding renewable fields.<br />
Training Initiatives<br />
107<br />
19<br />
13,530<br />
833<br />
OVERVIEW<br />
<strong>Texas</strong> universities, community colleges, and industry<br />
certification programs are continuously developing<br />
and expanding renewable energy course <strong>of</strong>ferings.<br />
The Environmental Defense Fund’s <strong>Texas</strong> Green Jobs<br />
Guidebook identifies over 50 <strong>Texas</strong> community colleges<br />
that <strong>of</strong>fer an array <strong>of</strong> low-cost programs to prepare<br />
students for green jobs.<br />
The <strong>Texas</strong> <strong>Renewable</strong> <strong>Energy</strong> Education Consortium<br />
(TREEC) is a group <strong>of</strong> twelve <strong>Texas</strong> colleges devoted<br />
to educating <strong>Texas</strong>’s renewable energy workforce.<br />
From Amarillo to Harlingen, <strong>the</strong> consortium<br />
works to <strong>of</strong>fer degrees, certificates, pr<strong>of</strong>essional development,<br />
and technical training. Courses are <strong>of</strong>fered<br />
in wind, solar, energy-efficient building design, and<br />
fuel cells.<br />
Average<br />
Annual Wage<br />
$98,332<br />
$103,428<br />
Electric Power Transmission, Control, & Distribution (22112) 219 31,337 $80,028<br />
Power Line and Related Structures Construction (23713) 623 15,387 $53,716<br />
Turbine & Power Transmission Equipment Mfg. (333611) 33 1,120 $78,208<br />
Semiconductors, Solar Cells, and Related Devices Mfg. (334413) 129 29,014 $103,480<br />
Electrical Equipment, Generator Mfg. (33531) 193 8,458 $70,564<br />
Battery Mfg. (33591) 12 330 $65,104<br />
TOTALS 1,316 99,176 $84,426<br />
Source: <strong>Texas</strong> Workforce Commission<br />
9
Wind Power<br />
Overview<br />
W<br />
ind is a clean, affordable, and renewable<br />
energy resource which plays a significant<br />
and growing role in <strong>the</strong> U.S. and <strong>Texas</strong><br />
energy markets. According to <strong>the</strong> Wind <strong>Energy</strong> Foundation,<br />
wind is currently <strong>the</strong> fastest growing source <strong>of</strong><br />
electricity production globally. Wind generation technology<br />
is mature and proven, and increasingly cost<br />
competitive. <strong>Texas</strong> is <strong>the</strong> leading state for wind energy<br />
generation, with over 22% <strong>of</strong> <strong>the</strong> nation’s installed<br />
wind capacity. If <strong>Texas</strong> were a country, it would rank<br />
sixth in installed capacity.<br />
Wind generation has proven popular because it is<br />
cheaper than solar, requires no water or o<strong>the</strong>r scarce<br />
<strong>Texas</strong> has more wind energy capacity than<br />
all but five countries<br />
End <strong>of</strong> 2011<br />
10<br />
Country/State<br />
Installed<br />
Capacity (MW)<br />
China 62,364<br />
United States 46,919<br />
Germany 29,060<br />
Spain 21,674<br />
India 16,084<br />
<strong>Texas</strong> 10,394<br />
Sources: Global Wind <strong>Energy</strong> Council<br />
American Wind <strong>Energy</strong> Association<br />
Wind Resources in <strong>Texas</strong> and U.S.<br />
Source: U.S. National <strong>Renewable</strong> <strong>Energy</strong> Laboratory<br />
resources, and emits no greenhouse gasses. Since<br />
windmills must be spaced out to maximize <strong>the</strong>ir efficiency,<br />
much <strong>of</strong> <strong>the</strong> underlying land can still be used<br />
for its original purposes, such as agriculture and livestock<br />
production.<br />
Because <strong>of</strong> wind power’s cost and efficiency advantages,<br />
wind installations far outpace solar. A decade<br />
after surpassing solar production, U.S. wind generation<br />
is nearly ten times greater than solar generation,<br />
according to <strong>the</strong> U.S. EIA.<br />
<strong>Texas</strong>’ world-class wind industry comes from its<br />
abundant natural wind resources. With plentiful wind<br />
on <strong>the</strong> Great Plains and along <strong>the</strong> Gulf Coast, <strong>the</strong> state<br />
ranks first nationally for wind generation potential,<br />
according to <strong>the</strong> American Wind <strong>Energy</strong> Association<br />
(AWEA). The state’s <strong>Renewable</strong> Portfolio Standard,<br />
enacted in 1999, also played a major role for encouraging<br />
wind energy development in <strong>Texas</strong>.
Wind Power<br />
Generation<br />
<strong>Texas</strong> is by far <strong>the</strong> leading state in wind energy<br />
generation with 10,394 megawatts<br />
(MW) <strong>of</strong> installed capacity, which is enough<br />
to power over 3.1 million <strong>Texas</strong> homes. <strong>Texas</strong>’<br />
wind capacity is over 40% greater than<br />
Iowa, <strong>the</strong> second-ranked state. <strong>Texas</strong> has<br />
seen a tremendous boom since <strong>the</strong> first commercial<br />
wind farm was built in 1995.<br />
In 2007, <strong>Texas</strong> became <strong>the</strong> first state to reach<br />
<strong>the</strong> milestone <strong>of</strong> one gigawatt <strong>of</strong> wind capacity<br />
installed in a single year. Six <strong>of</strong> <strong>the</strong> nation’s<br />
ten largest wind energy generation<br />
projects are located in <strong>Texas</strong>, according to AWEA.<br />
In 2011, wind accounted for a record 8.5% <strong>of</strong> all energy<br />
generated in ERCOT’s operating region, up from<br />
7.8% in 2010. (ERCOT is home to 93% <strong>of</strong> <strong>Texas</strong><br />
wind generation capacity.) At <strong>the</strong> end <strong>of</strong> 2011, 74<br />
wind farms were operational in <strong>Texas</strong>.<br />
The area with <strong>the</strong> greatest wind potential in <strong>the</strong> United<br />
States is <strong>the</strong> Great Plains, which stretch from <strong>Texas</strong> to<br />
North Dakota. O<strong>the</strong>r promising areas include coastlines<br />
along <strong>the</strong> Great Lakes and <strong>the</strong> Gulf <strong>of</strong> Mexico.<br />
The PUC reports that <strong>the</strong> state’s wind power potential<br />
is almost two times as much as <strong>the</strong> state’s total annual<br />
ERCOT Annual Wind <strong>Energy</strong> Generation<br />
30,000<br />
20,000<br />
10,000<br />
0<br />
(GWh)<br />
2002 2004 2006 2008 2010<br />
peak electric demand.<br />
Within ERCOT, 77% <strong>of</strong> installed wind capacity is in<br />
West <strong>Texas</strong>, while 21% is in <strong>the</strong> coastal region.<br />
Coastal wind is a growing resource in <strong>Texas</strong> because<br />
coastal winds blow consistently in late afternoons and<br />
are located near populous areas.<br />
<strong>Texas</strong> Wind Farms<br />
The largest cluster <strong>of</strong> wind farms in <strong>Texas</strong> is located<br />
in <strong>the</strong> region between Lubbock, Abilene, and Odessa<br />
(see map on page 12). In this region, Taylor, Nolan,<br />
Scurry, and Sterling Counties each have over 1,000<br />
MW <strong>of</strong> installed capacity, collectively accounting for<br />
about 45% <strong>of</strong> <strong>the</strong> state’s wind energy.<br />
Source: ERCOT<br />
WIND<br />
Installed Wind Generation Capacity 2011<br />
Source: American Wind <strong>Energy</strong> Association<br />
The Roscoe Wind Farm, which stretches<br />
across Nolan, Mitchell, Scurry, and Fisher<br />
Counties, is <strong>the</strong> nation’s second largest wind<br />
farm with over 600 wind turbines and a total<br />
installed capacity <strong>of</strong> 782 MW. The $1 billion<br />
project was completed in 2009 by E.ON Climate<br />
& <strong>Renewable</strong>s, a Chicago-based subsidiary<br />
<strong>of</strong> E.ON AG, a global energy company<br />
based in Düsseldorf, Germany.<br />
E.ON Climate & <strong>Renewable</strong>s has five wind<br />
projects in <strong>Texas</strong> alone, with 1,833 MW <strong>of</strong><br />
generating capacity, enough to power nearly<br />
11
WIND<br />
550,000 <strong>Texas</strong> homes. In addition to <strong>the</strong> 782 MW<br />
Roscoe Wind Farm, E.ON also operates <strong>the</strong> 380 MW<br />
Papalote Creek Wind Farm near Corpus Christi and<br />
<strong>the</strong> 458 MW Pan<strong>the</strong>r Creek complex near Big Creek,<br />
<strong>Texas</strong>.<br />
The 736 MW Horse Hollow Wind <strong>Energy</strong> Center in<br />
Taylor and Nolan Counties was <strong>the</strong> largest wind farm<br />
in <strong>the</strong> world when it was completed in 2006 by Florida-based<br />
NextEra <strong>Energy</strong> Resources. NextEra operates<br />
12 wind farms in <strong>Texas</strong> totaling 2,451 MW <strong>of</strong><br />
generating capacity. NextEra also operates <strong>the</strong> 663<br />
MW Capricorn Ridge Wind <strong>Energy</strong> Center, <strong>the</strong><br />
third largest wind farm in <strong>Texas</strong>.<br />
12<br />
<strong>Texas</strong> Wind Farm Locations<br />
Sources: ERCOT, PUC<br />
The fifth phase <strong>of</strong> <strong>the</strong> 585 MW Sweetwater Wind<br />
Farm owned by Duke <strong>Energy</strong> was completed in<br />
2008 near Sweetwater, <strong>Texas</strong>. This wind farm is currently<br />
<strong>the</strong> fourth largest in <strong>the</strong> state.<br />
The importance <strong>of</strong> wind energy to <strong>Texas</strong> is growing<br />
every year. The state added 297 MW (234 MW within<br />
ERCOT) <strong>of</strong> wind generating capacity in 2011.<br />
ERCOT has interconnection agreements with<br />
developers that will bring a fur<strong>the</strong>r 2,066 MW <strong>of</strong><br />
wind capacity online over <strong>the</strong> next three years.<br />
Duke <strong>Energy</strong> began construction on its 402 MW<br />
Los Vientos Windpower Project in 2012. Los<br />
Vientos is located on <strong>the</strong> Gulf <strong>of</strong> Mexico just<br />
north <strong>of</strong> Harlingen, <strong>Texas</strong>. Coastal wind generation<br />
is a small but growing component <strong>of</strong> <strong>the</strong> <strong>Texas</strong><br />
wind industry portfolio. When completed by<br />
<strong>the</strong> end <strong>of</strong> 2012, Duke <strong>Energy</strong> will have five wind<br />
farms in <strong>Texas</strong> with a total capacity <strong>of</strong> 897 MW.<br />
The 161 MW Spinning Spur Wind Project near Amarillo,<br />
<strong>Texas</strong>, is also scheduled for completion by <strong>the</strong><br />
end <strong>of</strong> 2012. The $190 million project is being codeveloped<br />
by Austin-based Cielo Wind Power and<br />
enXco, <strong>the</strong> U.S. subsidiary <strong>of</strong> <strong>the</strong> French global energy<br />
company EDF. Cielo has developed 10 wind farms<br />
in <strong>Texas</strong> with a total installed capacity <strong>of</strong> over 1,200<br />
MW, and is <strong>the</strong> largest independently owned wind<br />
farm developer in <strong>the</strong> U.S.<br />
Installed Capacity<br />
(MW)<br />
Nation's 10 Largest<br />
Wind <strong>Energy</strong> Generation Projects<br />
Project Name State<br />
981 Alta Wind CA<br />
782 Roscoe Wind Farm TX<br />
736 Horse Hollow TX<br />
663 Capricorn Ridge TX<br />
585 Sweetwater TX<br />
523 Buffalo Gap TX<br />
501 Meadow Lake IN<br />
458 Pan<strong>the</strong>r Creek TX<br />
450 Biglow Lake OR<br />
444 Rolling Hills IA<br />
Source: American Wind <strong>Energy</strong> Association, end <strong>of</strong> 2011
Wind Equipment<br />
Manufacturing<br />
In addition to leading <strong>the</strong> nation in wind generation<br />
capacity, Texans play multiple roles at all levels <strong>of</strong> <strong>the</strong><br />
global wind energy industry.<br />
<strong>Texas</strong> ranks second nationally in <strong>the</strong> number <strong>of</strong> manufacturing<br />
facilities related to wind, including assembly<br />
plants, tower manufacturing, and o<strong>the</strong>r component<br />
manufacturing. The AWEA estimates that at least 35<br />
facilities are involved in <strong>the</strong> windmill manufacturing<br />
business in <strong>Texas</strong>.<br />
<strong>Texas</strong> has manufacturing facilities for all three main<br />
windmill components: towers, blades, and nacelles.<br />
Nacelles are <strong>the</strong> boxes attached to <strong>the</strong> top <strong>of</strong> towers<br />
that contain <strong>the</strong> turbine, gearbox, and o<strong>the</strong>r electronic<br />
equipment.<br />
Manufacturing in <strong>Texas</strong><br />
Round Rock, <strong>Texas</strong>, is home to TECO-<br />
Westinghouse, <strong>the</strong> first wind turbine production facility<br />
in <strong>the</strong> state. In December 2009, <strong>the</strong> international<br />
company shipped one <strong>of</strong> its first orders <strong>of</strong> wind turbines<br />
to Chile for a $40 million wind power generation<br />
project.<br />
U.S. Wind-Related Manufacturers<br />
Source: American Wind <strong>Energy</strong> Association 2011<br />
WIND<br />
TECO-Westinghouse Turbine Manufacturing in Round Rock, <strong>Texas</strong><br />
In 1997, Molded Fiber Glass (MFG) Companies, an<br />
Ohio-based manufacturer, opened a 155,000 sq. ft.<br />
windmill blade manufacturing facility in Gainesville,<br />
<strong>Texas</strong>. Employing 200 skilled workers, MFG <strong>Texas</strong><br />
has shipped over 1,500 precision manufactured blade<br />
sets globally. Wind <strong>Energy</strong> Services Company, an<br />
MFG subsidiary specializing in windmill blade repair,<br />
is also located in Gainesville.<br />
In 2010, <strong>the</strong> French wind turbine company Alstom<br />
Wind broke ground on a turbine nacelle assembly<br />
plant in Amarillo, <strong>Texas</strong>, which will create 275 fulltime<br />
engineering, production, and technical support<br />
jobs. Alstom began hiring in 2011 and production is<br />
scheduled to ramp up in 2012.<br />
Trinity Structural Towers, a subsidiary <strong>of</strong> Dallasbased<br />
Trinity Industries, is a leading manufacturer <strong>of</strong><br />
wind towers. Trinity has a manufacturing<br />
facility in Coleman, <strong>Texas</strong>.<br />
In 2011, Illinois-based Broadwind <strong>Energy</strong><br />
opened a $7 million drivetrain service<br />
center in Abilene, <strong>Texas</strong>. The facility’s<br />
60-person staff will remanufacture<br />
and refurbish windmill blades and internals,<br />
such as gearboxes and turbines.<br />
This facility is an example <strong>of</strong> <strong>the</strong> wind<br />
industry’s sustained impact through operations<br />
and maintenance jobs. Tower<br />
Tech, a Broadwind subsidiary, also operates<br />
a wind tower manufacturing facility<br />
in Abilene.<br />
13
WIND<br />
Outlook for <strong>Texas</strong><br />
Wind <strong>Energy</strong><br />
Research & Development<br />
The future for wind energy is strong in <strong>Texas</strong>. The<br />
state’s industry leadership is supported by <strong>the</strong> state’s<br />
natural resources, business climate, robust R&D activity,<br />
and skilled renewable energy workforce.<br />
Wind energy is based on proven technology, yet research<br />
is ongoing to improve existing designs and<br />
innovate new ones. Researchers are experimenting<br />
with different windmill sizes and configurations designed<br />
for specific situations such as small scale generation<br />
or giant <strong>of</strong>fshore wind farms. Offshore wind<br />
generation is particularly promising.<br />
<strong>Texas</strong> universities house leading researchers and nationally<br />
recognized degree programs that are key to<br />
<strong>the</strong> development <strong>of</strong> energy technologies and management<br />
for <strong>the</strong> future.<br />
Located in Canyon, <strong>Texas</strong>, West <strong>Texas</strong> A&M<br />
University (WTAMU) has been a leader in wind<br />
energy research since 1970. Founded in 1977,<br />
WTAMU’s Alternative <strong>Energy</strong> Institute conducts<br />
research, evaluates wind turbine designs, collects<br />
wind data, and conducts workforce training programs.<br />
In 2009, <strong>the</strong> National Institute for<br />
<strong>Renewable</strong> <strong>Energy</strong> (NIRE) was<br />
formed in Lubbock, <strong>Texas</strong>. NIRE is a<br />
public-private partnership between <strong>Texas</strong> Tech University<br />
(TTU) and <strong>the</strong> Innovate <strong>Texas</strong> Foundation that<br />
focuses on wind energy R&D and advocacy.<br />
The <strong>Texas</strong> A&M Engineering Wind <strong>Energy</strong><br />
Center was established in 2010 as a part <strong>of</strong> <strong>the</strong><br />
<strong>Texas</strong> Engineering Experiment Station (TEES)<br />
in College Station, <strong>Texas</strong>. The Wind <strong>Energy</strong> Center’s<br />
mission is to support wind energy research and development<br />
in <strong>Texas</strong>. Among o<strong>the</strong>r topics, <strong>the</strong> center is<br />
focusing on <strong>the</strong> commercialization <strong>of</strong> <strong>of</strong>fshore wind<br />
potential.<br />
14<br />
The Galveston Wind Project, developed by Coastal<br />
Point <strong>Energy</strong> LLC, hopes to become <strong>the</strong> first commercial<br />
<strong>of</strong>fshore wind farm in <strong>the</strong> U.S. The Houstonbased<br />
company has collected 30 months worth <strong>of</strong> meteorological<br />
data from <strong>the</strong>ir observation platform eight<br />
miles <strong>of</strong>f <strong>the</strong> coast <strong>of</strong> Galveston, <strong>Texas</strong>. The next step<br />
is to install a 750 kW turbine, which will power a water<br />
desalination system. If successful, Coastal Point<br />
hopes to develop <strong>of</strong>fshore wind farms on <strong>the</strong> 84,000<br />
acres <strong>of</strong> submerged land in <strong>the</strong> Gulf <strong>of</strong> Mexico <strong>the</strong>y<br />
have leased from <strong>the</strong> state <strong>of</strong> <strong>Texas</strong>.<br />
General Dynamics to bring turbine<br />
manufacturing jobs to East <strong>Texas</strong><br />
In 2012, North Carolina-based defense contractor<br />
General Dynamics (GD), entered into a licensing<br />
agreement with Windflow Technology, a New Zealand-based<br />
wind turbine maker. As a result <strong>of</strong> <strong>the</strong><br />
agreement, Windflow and GD will jointly develop<br />
500 kW wind turbines to be manufactured at two<br />
facilities in Longview and Kilgore, <strong>Texas</strong>.<br />
Government Initiatives<br />
The <strong>Texas</strong> Legislature established <strong>the</strong> <strong>Texas</strong> Enterprise<br />
Fund (TEF) in 2003 as a state deal-closing fund<br />
for economic development. The TEF helped bring<br />
wind tower manufacturing to <strong>the</strong> state with a 2008<br />
award to Martifer-Hirschfield <strong>Energy</strong> Systems in San<br />
Angelo, <strong>Texas</strong>. In 2010, production began at <strong>the</strong> $40<br />
million plant, which will create 225 new jobs. The<br />
company, a joint venture between San Anglelo-based<br />
Hirschfield Industries and Portugal-based Martifer
<strong>Energy</strong> Systems, was awarded $845,000 by <strong>the</strong> TEF<br />
to locate in San Angelo, <strong>Texas</strong>.<br />
The <strong>Texas</strong> Emerging Technology Fund (TETF) was<br />
created by <strong>the</strong> <strong>Texas</strong> Legislature in 2005 to provide<br />
<strong>Texas</strong> with an advantage in <strong>the</strong> research, development,<br />
and commercialization <strong>of</strong> disruptive new technologies,<br />
including wind energy. To date, <strong>the</strong> fund has<br />
invested $10.4 million in emerging wind technology<br />
firms and research groups.<br />
In July 2010 Gov. Rick Perry announced an $8.4 million<br />
TETF research superiority investment through<br />
<strong>Texas</strong> Tech University and NIRE. The investment will<br />
help create <strong>the</strong> National Wind Resource Center<br />
(NWRC) in Lubbock, a non-pr<strong>of</strong>it organization<br />
formed by TTU that focuses on wind power research<br />
New Wind Technology R&D in Lubbock<br />
The Scaled Wind Farm Technology Facility (SWIFT)<br />
is currently under construction in Lubbock, <strong>Texas</strong>.<br />
SWIFT is hosted by <strong>the</strong> <strong>Texas</strong> Tech University’s (TTU)<br />
Reese Technology Center in collaboration with Sandia<br />
National Laboratories, <strong>the</strong> National Institute for<br />
<strong>Renewable</strong> <strong>Energy</strong> (NIRE), and Denmark-based Vestas,<br />
<strong>the</strong> global leader in wind turbine manufacturing.<br />
The first phase <strong>of</strong> <strong>the</strong> DOE-funded facility will consist<br />
<strong>of</strong> three Vestas V27 wind turbines, anemometer<br />
towers, and a facility for research preparation and<br />
analysis. SWIFT’s research will emphasize <strong>the</strong> interactions<br />
<strong>of</strong> wind turbines on each o<strong>the</strong>r to maximize<br />
total wind farm efficiency, ra<strong>the</strong>r than focusing on<br />
<strong>the</strong> output <strong>of</strong> a single turbine. The facility will also<br />
research advanced rotor designs, acoustics, and o<strong>the</strong>r<br />
topics that will help increase wind farm efficiency.<br />
SWIFT plans to be operational in late 2012.<br />
Offshore Wind in <strong>Texas</strong><br />
WIND<br />
Although <strong>of</strong>fshore wind has a small but growing<br />
presence in Nor<strong>the</strong>rn Europe, <strong>the</strong>re is no commercial<br />
<strong>of</strong>fshore wind generation in <strong>the</strong> United States.<br />
<strong>Texas</strong> hopes to become <strong>the</strong> first state to welcome<br />
<strong>of</strong>fshore wind generation to its coastline.<br />
Because <strong>of</strong> a stipulation made when <strong>the</strong> Republic<br />
<strong>of</strong> <strong>Texas</strong> joined <strong>the</strong> United States in 1845, <strong>the</strong><br />
state claims jurisdiction 10.3 miles into <strong>the</strong> Gulf <strong>of</strong><br />
Mexico, more than three times <strong>the</strong> distance<br />
claimed by o<strong>the</strong>r states along <strong>the</strong> Atlantic Coast.<br />
This allows <strong>Texas</strong> projects to be located fur<strong>the</strong>r<br />
into <strong>the</strong> Gulf: invisible from <strong>the</strong> coast while also<br />
largely eliminating <strong>the</strong> burden <strong>of</strong> federal review.<br />
Several <strong>of</strong>fshore projects are under consideration<br />
along <strong>the</strong> <strong>Texas</strong> Gulf Coast.<br />
and education through collaboration with national<br />
laboratories, academic institutions, and trade organizations.<br />
In 2009, <strong>the</strong> TETF invested $2 million in Turbo Trac<br />
USA, a Frisco-based company investigating heavy<br />
duty infinitely variable transmissions. The technology<br />
is expected to increase <strong>the</strong> efficiency <strong>of</strong> drivetrain<br />
systems in various activities, including windmill gearboxes,<br />
oil well pumps, industrial equipment, and<br />
heavy duty vehicles.<br />
The <strong>Texas</strong> wind industry has also benefited from <strong>the</strong><br />
federal Production Tax Credit (PTC), which provides<br />
a 2.2 cent per kilowatt-hour income tax credit for<br />
wind energy production. The PTC is scheduled to<br />
expire at <strong>the</strong> end <strong>of</strong> 2012 and its future is uncertain.<br />
This credit has been a boon to <strong>the</strong> wind industry, and<br />
<strong>the</strong> recent policy uncertainty has hindered wind investments<br />
in <strong>Texas</strong> and across <strong>the</strong> country.<br />
Workforce & Training Initiatives<br />
A study released by <strong>the</strong> Waco, <strong>Texas</strong>-based Perryman<br />
Group in May 2010 estimates <strong>the</strong> wind industry is<br />
responsible for nearly 10,000 manufacturing, headquarters,<br />
construction, and maintenance and support<br />
jobs in <strong>Texas</strong>. The American Wind <strong>Energy</strong> Association<br />
(AWEA) agrees, ranking <strong>Texas</strong> first among states<br />
15
WIND<br />
in wind industry employment, which includes manufacturing,<br />
installation, and maintenance jobs.<br />
Workers across <strong>the</strong> state play a fundamental part in<br />
<strong>the</strong> international supply chain <strong>of</strong> <strong>the</strong> industry. <strong>Texas</strong> is<br />
a leader in steel fabrication and transportation for<br />
wind energy, and in advanced materials such as carbon<br />
fiber, which are exported from <strong>Texas</strong> to wind<br />
energy companies around <strong>the</strong> globe.<br />
In addition to supporting NIRE and NWRC, <strong>Texas</strong><br />
Tech University (TTU) <strong>of</strong>fers a doctoral program<br />
in Wind Science and Engineering, <strong>the</strong> first<br />
and only wind energy-related PhD program in <strong>the</strong><br />
United States. TTU also <strong>of</strong>fers undergraduate degrees,<br />
minors, graduate certificates, and pr<strong>of</strong>essional development<br />
through <strong>the</strong> school’s Wind Science and Engineering<br />
Research Center.<br />
Located in Sweetwater, <strong>Texas</strong><br />
State Technical College-West<br />
<strong>Texas</strong> (TSTC) <strong>of</strong>fers associate degrees<br />
and certificates in Wind <strong>Energy</strong> Technology. In<br />
2010, TSTC-West <strong>Texas</strong> partnered with TTU to create<br />
<strong>the</strong> <strong>Texas</strong> Wind <strong>Energy</strong> Institute to coordinate workforce<br />
training programs between <strong>the</strong> two schools.<br />
Amarillo College <strong>of</strong>fers wind training courses<br />
through its Wind Technology Program. The<br />
program <strong>of</strong>fers wind technician certificates for<br />
students interested in wind energy operation, maintenance,<br />
and manufacturing. In addition, <strong>the</strong> college<br />
<strong>of</strong>fers a renewable associate degree in Wind <strong>Energy</strong>.<br />
16<br />
Wind <strong>Energy</strong>-Related Employment in <strong>Texas</strong><br />
Fourth Quarter 2011<br />
West <strong>Texas</strong> A&M’s Alternative <strong>Energy</strong><br />
Institute (AEI) in Canyon, <strong>Texas</strong>, conducts<br />
workforce training programs in addition to<br />
its research activities. AEI <strong>of</strong>fers online courses for<br />
wind energy, as well as information seminars for land<br />
owners with potential wind assets.<br />
In addition to its pioneering wind program in West<br />
<strong>Texas</strong>, TSTC’s Harlingen Campus <strong>of</strong>fers programs<br />
in Ingleside, <strong>Texas</strong>. TSTC-Harlingen <strong>of</strong>fers an A.A.S.<br />
degree in Wind <strong>Energy</strong> & Turbine Technology, focused<br />
on wind farm operations and maintenance. The<br />
course is taught on <strong>the</strong> former site <strong>of</strong> Naval Station<br />
Ingleside near Corpus Christi. After its closure in<br />
2010, a portion <strong>of</strong> this base was redeveloped as <strong>the</strong><br />
North American Coastal Wind <strong>Energy</strong> Technology<br />
Development & Testing Center, a turbine and blade<br />
testing center sponsored by <strong>the</strong> U.S. Department <strong>of</strong><br />
<strong>Energy</strong> and The Wind Alliance.<br />
Sector (Industry Code) Firms Employees<br />
Average<br />
Annual Wage<br />
Wind Electric Power Generation (221114) 19 833 $103,428<br />
Power Line and Related Structures Construction (23713) 623 15,387 $53,716<br />
Turbine & Power Transmission Equipment Mfg. (333611) 33 1,120 $78,208<br />
Electrical Equipment, Generator Mfg. (33531) 193 8,458 $70,564<br />
TOTALS 868 25,798 $61,908<br />
Source: <strong>Texas</strong> Workforce Commission
Solar Power<br />
Overview<br />
I<br />
n <strong>the</strong> U.S., solar power currently lags behind wind<br />
power in terms <strong>of</strong> installed capacity, yet solar industry<br />
growth is poised to accelerate over <strong>the</strong> next<br />
few years. Photovoltaic cell prices continue to trend<br />
lower (see chart below), as a result <strong>of</strong> new technology,<br />
improved manufacturing techniques, and better economies<br />
<strong>of</strong> scale from expanding production.<br />
The most common solar technology is photovoltaics<br />
(PV). As depicted in <strong>the</strong> picture above, PV modules<br />
are glass-covered semiconductor cells which convert<br />
sunlight into an electric current. PV cells are usually<br />
made <strong>of</strong> silicon, and are <strong>of</strong>ten installed on ro<strong>of</strong>tops<br />
and open spaces. Although PV systems are frequently<br />
used for larger utility-scale projects, its modularity<br />
makes PV a popular choice for small-scale energy<br />
U.S. Photovoltaic Shipments vs Prices<br />
$8<br />
$6<br />
$4<br />
Module price per watt<br />
Shipments<br />
(MW)<br />
$2<br />
0<br />
1990 1995 2000 2005 2010<br />
1,500<br />
1,000<br />
500<br />
Source: U.S. <strong>Energy</strong> Information Administration<br />
generation near <strong>the</strong> point <strong>of</strong> use (also called distributed<br />
generation), such as on residential or commercial<br />
ro<strong>of</strong>tops. In <strong>the</strong> U.S. market, 20% <strong>of</strong> installed solar<br />
capacity is utility-scale PV and 60% is distributed PV.<br />
Concentrated Solar Power (CSP) comprises <strong>the</strong> remaining<br />
20% <strong>of</strong> <strong>the</strong> U.S. solar market. This technology<br />
maximizes <strong>the</strong> sun’s output by using mirrors and<br />
lenses to concentrate <strong>the</strong> available sunlight on a central<br />
collector. The concentrated sunlight creates heat,<br />
which is <strong>the</strong>n used to turn a steam turbine and generate<br />
electricity. CSP can be more efficient than PV, but<br />
it requires a higher capital investment. CSP also requires<br />
direct sunlight, while PV cells can still generate<br />
electricity on cloudy days. CSP is almost exclusively<br />
used for utility-scale projects in very sunny areas,<br />
such as <strong>the</strong> southwestern United States.<br />
Solar Resources in <strong>Texas</strong> and U.S.<br />
Source: National <strong>Renewable</strong> <strong>Energy</strong> Laboratory<br />
17
SOLAR<br />
Solar Power<br />
Generation<br />
Due to its abundant sunshine, manufacturing base, and<br />
developed research institutions, <strong>Texas</strong> is well positioned<br />
to compete in <strong>the</strong> fast-growing solar energy<br />
market. <strong>Texas</strong> is ranked No. 1 nationally in solar potential,<br />
according to <strong>the</strong> State <strong>Energy</strong> Conservation<br />
<strong>Office</strong>. West <strong>Texas</strong> in particular has some <strong>of</strong> <strong>the</strong> nation’s<br />
highest levels <strong>of</strong> solar radiation, making it suitable<br />
for supporting utility-scale solar power plants.<br />
Distributed solar, such as ro<strong>of</strong>top panels and o<strong>the</strong>r<br />
smaller projects, are viable across <strong>the</strong> state.<br />
U.S. solar energy consumption was 463 GWh in 2011,<br />
which was less than 2% <strong>of</strong> all renewable energy.<br />
While solar energy is a relatively small portion <strong>of</strong> <strong>the</strong><br />
entire U.S. energy industry, it is growing rapidly. It<br />
grew 29% in 2010 and 25% in 2011, matching <strong>the</strong><br />
growth rates <strong>of</strong> <strong>the</strong> highly successful wind industry.<br />
Austin <strong>Energy</strong> Inaugurates<br />
Largest Solar Farm in <strong>Texas</strong><br />
Located in Webberville, <strong>Texas</strong>, <strong>the</strong> 30 MW photovoltaic<br />
solar farm went online in December 2011. RES<br />
Americas, a leading renewable energy developer,<br />
installed over 127,000 PV modules on <strong>the</strong> project’s<br />
380 acre site, mounted on single axis trackers to follow<br />
<strong>the</strong> sun’s trajectory across <strong>the</strong> <strong>Texas</strong> sky. The<br />
$100 million project was made possible in part by<br />
Austin <strong>Energy</strong>’s commitment to buy all <strong>of</strong> <strong>the</strong> facility’s<br />
power for 25 years. The Webberville solar farm is<br />
a part <strong>of</strong> Austin <strong>Energy</strong>’s long-term strategy to source<br />
35% <strong>of</strong> its electricity from renewable sources by<br />
2020.<br />
18<br />
80<br />
60<br />
40<br />
20<br />
0<br />
<strong>Texas</strong> Grid-Connected<br />
Solar PV Capacity (MW)<br />
2007 2008 2009 2010 2011*<br />
Source: 2007-2010 Interstate <strong>Renewable</strong> <strong>Energy</strong> Council<br />
*2011 <strong>Office</strong> <strong>of</strong> <strong>the</strong> Governor Estimate<br />
Solar Power Generation in <strong>Texas</strong><br />
Over <strong>the</strong> past decade, solar energy has played second<br />
fiddle to wind both in <strong>Texas</strong> and across <strong>the</strong> country.<br />
Compared to wind and fossil fuel sources, solar energy<br />
is currently more expensive. As costs continue to<br />
fall, solar energy will be increasingly significant to<br />
Texans over <strong>the</strong> next decade.<br />
According to <strong>the</strong> Interstate <strong>Renewable</strong> <strong>Energy</strong> Council<br />
(IREC), <strong>Texas</strong> ranked No. 13 nationally in gridconnected<br />
installed PV capacity in 2010 with 34.5<br />
MW. Ro<strong>of</strong>top PV systems comprise <strong>the</strong> bulk <strong>of</strong> <strong>Texas</strong><br />
solar projects. With <strong>the</strong> 30 MW Webberville solar<br />
farm coming online in late 2011, <strong>the</strong> <strong>Office</strong> <strong>of</strong> <strong>the</strong><br />
Governor estimates total installed capacity to have<br />
been approximately 74 MW at <strong>the</strong> end <strong>of</strong> 2011.<br />
Solar <strong>Energy</strong> Projects in <strong>Texas</strong><br />
With a combined 34 MW <strong>of</strong> installed capacity, San<br />
Antonio narrowly edges Austin as <strong>the</strong> <strong>Texas</strong> city with<br />
<strong>the</strong> most utility-scale solar capacity. CPS <strong>Energy</strong><br />
(CPS), <strong>the</strong> municipal electric utility <strong>of</strong> San Antonio,<br />
has a goal to provide <strong>the</strong> city with 20% renewable<br />
energy by 2020, <strong>of</strong> which solar is a major component.<br />
CPS currently buys solar power from <strong>the</strong> Blue Wing<br />
Solar Project. Built by Duke <strong>Energy</strong> in 2010, Blue<br />
Wing is a 14 MW PV system in sou<strong>the</strong>astern San Antonio.<br />
SunEdison, a solar project developer, complet-
ed San Antonio’s 19.8 MW William R. Sinkin Centennial<br />
Solar Farm in June 2012.<br />
Because <strong>of</strong> solar power’s unique characteristics, most<br />
solar projects are relatively small in scale. Aside from<br />
Blue Wing and <strong>the</strong> Webberville project, most solar<br />
installations in <strong>Texas</strong> have a rated output <strong>of</strong> less than<br />
1 MW each. Cumulatively, solar can add up to make a<br />
big impact in <strong>Texas</strong>. For example, residential and<br />
commercial ro<strong>of</strong>top solar PV installations could <strong>the</strong>oretically<br />
provide 84% <strong>of</strong> Austin’s energy needs, according<br />
to a 2009 study by Solar America Cities, a<br />
program sponsored by <strong>the</strong> DOE.<br />
Austin <strong>Energy</strong> estimates 6.2 MW <strong>of</strong> distributed solar<br />
PV systems are already installed in <strong>the</strong> city, including<br />
systems at 47 Austin area schools and 38 city buildings.<br />
As <strong>of</strong> 2010, Houston and San Antonio accounted<br />
for a fur<strong>the</strong>r 2.0 MW each, according to <strong>the</strong> DOE.<br />
Fort Hood, an Army base near Killeen, <strong>Texas</strong>, recently<br />
installed a $3 million PV system, which will provide<br />
about 20% <strong>of</strong> <strong>the</strong> energy needs for an adjacent<br />
housing development. Completed in March 2012, <strong>the</strong><br />
3,000 PV panels take up about 4 acres and generate<br />
684 kW, which is enough to power over 200 <strong>Texas</strong><br />
homes.<br />
In January 2012, CPS <strong>Energy</strong> announced an ambitious<br />
and unique solar project that promises to pay big dividends<br />
to <strong>the</strong> city <strong>of</strong> San Antonio. This project combines<br />
a massive investment in renewable energy with<br />
a commitment to economic development and job<br />
creation. 400 MW in PV solar generation will be constructed<br />
using locally sourced components.<br />
Key among those components are <strong>the</strong> solar panels,<br />
which will be supplied by a new manufacturing facility<br />
to be built in San Antonio. This facility will be built by<br />
Nexolon, a South<br />
Korean company<br />
that went public in<br />
2011.<br />
14 MW Blue Wing Solar Farm in San Antonio<br />
The University <strong>of</strong> <strong>Texas</strong> (UT) System installed ro<strong>of</strong>top<br />
solar projects on two campuses in 2011. UT-<br />
Austin installed a 200 kW PV system, while UT-San<br />
Antonio installed a 170 kW PV system.<br />
In 2012, Kaneka <strong>Texas</strong> Corp. installed a 53 kW solar<br />
system on <strong>the</strong> ro<strong>of</strong> <strong>of</strong> its headquarters in Pasadena,<br />
<strong>Texas</strong>. Kaneka <strong>Texas</strong> is a chemical manufacturing<br />
subsidiary <strong>of</strong> Kaneka Corporation, a diversified multinational<br />
that also manufactures solar panels in its<br />
home country, Japan.<br />
San Antonio’s CPS <strong>Energy</strong> Announces Solar Mega Project<br />
SOLAR<br />
OCI Solar Power will build, develop, and manage <strong>the</strong><br />
400 MW installation in San Antonio. OCI Solar Power<br />
is a North American subsidiary <strong>of</strong> South Korea-based<br />
OCI Company, a leading manufacturer <strong>of</strong> polysilicon, a<br />
key material in PV solar cells.<br />
OCI Solar Power and Nexolon will combine to invest<br />
$100 million in San Antonio and create over 800 pr<strong>of</strong>essional<br />
and technical jobs. Both South Korean-based<br />
companies will locate <strong>the</strong>ir U.S. headquarters in San<br />
Antonio. This project is also expected to create business<br />
opportunities for new and existing suppliers and<br />
installers. CPS <strong>Energy</strong> has a 25-year power purchase<br />
agreement for all energy generated by this project.<br />
19
SOLAR<br />
Solar Equipment<br />
Manufacturing<br />
Solar Manufacturing in <strong>Texas</strong><br />
<strong>Texas</strong> has a strong solar equipment manufacturing<br />
sector, which is anchored by a globally competitive<br />
cluster <strong>of</strong> semiconductor fabrication companies. This<br />
manufacturing base makes <strong>Texas</strong> a leading location<br />
for all phases <strong>of</strong> solar energy manufacturing.<br />
A number <strong>of</strong> <strong>Texas</strong> businesses are directly engaged in<br />
solar energy manufacturing (see chart below). Entech<br />
Solar, a manufacturer <strong>of</strong> concentrating photovoltaic<br />
panels, is based in Fort Worth. HelioVolt, a thin-film<br />
solar panel startup, operates a 20 MW manufacturing<br />
facility at its headquarters in Austin, <strong>Texas</strong>.<br />
Solar Equipment Companies Located in <strong>Texas</strong><br />
Company Location Activity<br />
Rank<br />
1SolTech Farmers Branch PV panel mfg.<br />
Applied Materials Austin Semiconductor mfg. equipment<br />
Applied Nanotech Austin Nanotech materials for PV<br />
Duke <strong>Energy</strong> San Antonio PV generation<br />
Entech Solar Fort Worth Concentrated PV panel mfg.<br />
Freescale Semiconductor Austin Semiconductors<br />
Growatt North America Houston Inverters<br />
HelioVolt Austin Thin film PV panel mfg.<br />
Ideal Power Converters Spicewood Inverters<br />
MEMC Pasadena Granular polysilicon mfg.<br />
RES Americas Webberville PV Generation<br />
Solar Power Technologies Austin PV control systems<br />
SolarBridge Technologies Austin PV microinverters<br />
20<br />
Solarno Coppell R&D<br />
SunPower Austin PV panel sales<br />
Representative Sample Only<br />
Leading Semiconductor Machinery<br />
Manufacturer in <strong>Texas</strong><br />
Applied Materials is <strong>the</strong> world’s largest producer<br />
<strong>of</strong> semiconductor manufacturing equipment used<br />
for fabricating solar wafers and cells. The California-based<br />
company’s systems are used in manufacturing<br />
commercially available solar cells by all<br />
<strong>of</strong> <strong>the</strong> top 15 wafer manufacturers and 14 <strong>of</strong> <strong>the</strong><br />
top 15 cell manufacturers globally.<br />
Applied Materials operates a research,<br />
development and manufacturing facility<br />
in Austin, <strong>Texas</strong>, with over 2,000 highly<br />
skilled workers.<br />
St. Peters, Missouri-based MEMC manufactures<br />
granular polysilicon at its facility in Pasadena, <strong>Texas</strong>.<br />
MEMC also owns SunEdison, <strong>the</strong> company currently<br />
building three 10 MW solar PV farms in <strong>the</strong> San Antonio<br />
area.<br />
In 2011, PV panel manufacturer SunPower,<br />
based in San Jose, California, located<br />
a regional <strong>of</strong>fice in Austin, <strong>Texas</strong>. 1Sol-<br />
Tech, a PV panel maker in Farmers<br />
Branch founded in 2008, recently expanded<br />
into a new facility and increased its<br />
workforce to 70.<br />
Solar Power Technologies (SPT), an<br />
Austin-based startup, is developing technology<br />
to improve <strong>the</strong> efficiency <strong>of</strong> large<br />
solar PV arrays. SPT accomplishes this<br />
through monitoring each PV panel and<br />
analyzing its performance.<br />
In addition to solar panel manufacturers,<br />
<strong>Texas</strong> has long been a leader in <strong>the</strong> semiconductor<br />
industry. <strong>Texas</strong> is home to approximately<br />
11.5% <strong>of</strong> <strong>the</strong> world’s silicon<br />
processing capacity, according to a 2007<br />
study by <strong>the</strong> IC 2 Institute at UT-Austin.<br />
As <strong>the</strong> most important component <strong>of</strong> PV<br />
cells, a globally competitive silicon-based<br />
semiconductor manufacturing base is a<br />
strong asset for <strong>the</strong> <strong>Texas</strong> solar industry.
Outlook for <strong>Texas</strong><br />
Solar <strong>Energy</strong><br />
<strong>Texas</strong> universities and businesses are highly active in<br />
developing solar technology. According to a 2007<br />
report by <strong>the</strong> IC 2 Institute at UT-Austin (see table below),<br />
<strong>Texas</strong> is one <strong>of</strong> <strong>the</strong> leading states in solar research<br />
and development. Most research is focused on<br />
increasing efficiency and lowering costs. Current PV<br />
technology captures roughly 15% <strong>of</strong> <strong>the</strong> sun’s energy,<br />
while CSP captures roughly 20%. Increasing this energy<br />
conversion efficiency in a cost effective manner<br />
is a key to future solar technology proliferation. To<br />
that end, researchers are exploring new materials and<br />
manufacturing methods to drive down costs.<br />
<strong>Texas</strong> National Solar Rankings, 2007<br />
PV-related federal research awards 4<br />
PV-related patents 4<br />
PV business located in <strong>the</strong> state 5<br />
PV-related scientific publications 6<br />
Research & Development<br />
Source: UT-Austin, IC 2 Institute<br />
Astro-Watt, a Round Rock, <strong>Texas</strong>-based startup, is<br />
researching low-cost thin-film PV manufacturing.<br />
Thin-film PV cells are generally less efficient than<br />
traditional designs, but are cheaper to manufacture.<br />
In 2011, Applied Nanotech opened its solar inks pilot<br />
manufacturing line in an expansion <strong>of</strong> <strong>the</strong> company’s<br />
headquarters in Austin, <strong>Texas</strong>. The nanoparticle metallic<br />
inks are sprayed directly onto silicon wafers for<br />
PV cells. This non-contact method allows raw material<br />
requirements to be lowered by 44%.<br />
Several universities in <strong>the</strong> state operate solar vehicle<br />
racing teams, including Rice University, <strong>Texas</strong><br />
A&M University, <strong>Texas</strong> Tech University, and UT-<br />
Austin. These programs provide students a hands-on<br />
opportunity to work with solar technology as well as<br />
automotive design.<br />
Solar racing vehicle built by students at UT-Austin<br />
<strong>Texas</strong> A&M University collaborates with <strong>the</strong> DOE’s<br />
National <strong>Renewable</strong> <strong>Energy</strong> Laboratory to research<br />
ways to store solar <strong>the</strong>rmal energy. Researchers are<br />
using solar power to heat molten salt mixed with<br />
nan<strong>of</strong>luid particles. The <strong>the</strong>rmal energy storage can<br />
later be recovered to generate electricity.<br />
The University <strong>of</strong> North <strong>Texas</strong> (UNT) opened its<br />
Zero <strong>Energy</strong> Laboratory in April 2012. This facility<br />
will house cutting-edge research in green technology,<br />
including solar energy. One <strong>of</strong> <strong>the</strong> next-generation<br />
technologies currently under investigation is solar<br />
cells, which combine organic and inorganic materials.<br />
TETF Invests in SolarBridge<br />
In March 2010, Gov. Rick Perry announced <strong>the</strong><br />
TETF’s investment <strong>of</strong> $1.5 million in SolarBridge<br />
Technologies for <strong>the</strong> development and commercialization<br />
<strong>of</strong> its solar energy technology. In 2009,<br />
<strong>the</strong> company moved its headquarters from Illinois<br />
to Austin, <strong>Texas</strong>.<br />
SolarBridge designs microinverters and monitoring<br />
systems for photovoltaic panels. Inverters are typically<br />
larger devices located at a centralized location,<br />
but SolarBridge’s devices are small enough to<br />
easily mount on <strong>the</strong> underside <strong>of</strong> a PV panel. This<br />
helps make ro<strong>of</strong>top solar installations cheaper,<br />
safer, and more efficient.<br />
With <strong>Texas</strong>’ support, SolarBridge has more than<br />
doubled its workforce and is moving into <strong>the</strong> commercialization<br />
phase.<br />
Workforce & Training<br />
SOLAR<br />
21
SOLAR<br />
Researchers at <strong>the</strong> University <strong>of</strong> Houston are developing<br />
multi-junction thin-film solar cells. Multijunction<br />
cells have several layers <strong>of</strong> PV films, each<br />
able to capture different wavelengths <strong>of</strong> <strong>the</strong> sun’s rays,<br />
which minimizes solar energy waste as heat. This research<br />
is a part <strong>of</strong> <strong>the</strong> Engineering Research Center for<br />
Quantum <strong>Energy</strong> and Sustainable Solar Technologies,<br />
a multi-institution collaboration in Arizona funded by<br />
<strong>the</strong> National Science Foundation and <strong>the</strong> DOE.<br />
UT-Austin’s Department <strong>of</strong> Chemical Engineering<br />
is developing a promising technology which utilizes<br />
nanoparticle “ink.” The ink could be printed much like<br />
a roll <strong>of</strong> newspaper in a relatively low cost process.<br />
This technology would dramatically lower <strong>the</strong> cost <strong>of</strong><br />
solar semiconductors, which are traditionally manufactured<br />
in high-tech, high temperature clean rooms.<br />
Government and Utility Initiatives<br />
Government initiatives play a key role in developing<br />
and implementing solar technology. The <strong>Texas</strong><br />
Emerging Technology Fund (TETF) was created by<br />
<strong>the</strong> <strong>Texas</strong> Legislature in 2005 to provide <strong>Texas</strong> with<br />
an advantage in <strong>the</strong> research, development, and commercialization<br />
<strong>of</strong> innovative new technologies. To<br />
date, <strong>the</strong> fund has invested $7 million in emerging<br />
solar technology firms.<br />
In March 2009, <strong>the</strong> TETF awarded $1 million to Solarno,<br />
a solar research company affiliated with The<br />
University <strong>of</strong> <strong>Texas</strong> at Dallas’ NanoTech Institute.<br />
Based in Coppell, <strong>Texas</strong>, Solarno focuses on nanotechnology<br />
with potential solar applications.<br />
TETF Invests in Ideal Power Converters<br />
In 2010, <strong>the</strong> <strong>Texas</strong> Emerging Technology Fund invested $1 million in<br />
Ideal Power Converters (IPC), a renewable energy startup affiliated<br />
with <strong>the</strong> University <strong>of</strong> <strong>Texas</strong> at Austin. Based in Spicewood, <strong>Texas</strong>,<br />
IPC makes inverters that are significantly smaller and more efficient<br />
than traditional designs. This innovative technology will help lower<br />
installation and maintenance costs for commercial PV systems. In<br />
2011, IPC inverters were used in solar PV installations at UT-Austin<br />
and UT-San Antonio.<br />
22<br />
Nanoparticle Semiconductor Ink Developed at UT-Austin<br />
The 78th <strong>Texas</strong> Legislature established <strong>the</strong> <strong>Texas</strong> Enterprise<br />
Fund (TEF) in 2003 as a state deal-closing<br />
fund for economic development. In 2008, Gov. Perry<br />
announced an award <strong>of</strong> $1 million from <strong>the</strong> TEF to <strong>the</strong><br />
Austin-based thin film photovoltaic manufacturer,<br />
HelioVolt. The award contributed to <strong>the</strong> company’s<br />
decision to locate a 122,400 sq. ft. development and<br />
manufacturing facility in Austin, which will generate<br />
$62 million in capital investment and create 158 new<br />
solar industry jobs. In 2011, <strong>the</strong> company raised a<br />
fur<strong>the</strong>r $85 million in venture capital funding.<br />
Many <strong>Texas</strong> communities and utilities have adopted<br />
innovative financing mechanisms aimed at encouraging<br />
residential and commercial solar installations. A<br />
number <strong>of</strong> electric utilities <strong>of</strong>fer incentives to help<br />
consumers deal with <strong>the</strong> high upfront cost and long<br />
payback periods associated with solar PV systems.<br />
Oncor, Entergy, <strong>Texas</strong> New Mexico Power Company,<br />
AEP <strong>Texas</strong>, Southwestern Electric Power Company,<br />
El Paso Electric, Austin <strong>Energy</strong>, and CPS<br />
<strong>Energy</strong> are among <strong>the</strong> <strong>Texas</strong> utilities that <strong>of</strong>fer residential<br />
and non-residential incentives, between $1.50<br />
to $2.50 per watt installed. These installation incen-<br />
tives can be combined with a 30% federal<br />
tax credit to greatly reduce <strong>the</strong> cost<br />
<strong>of</strong> installing ro<strong>of</strong>top solar panels.<br />
In 2010, <strong>Texas</strong> power provider TXU<br />
<strong>Energy</strong> began leasing solar panels to<br />
Dallas/Fort Worth area homeowners<br />
with zero upfront cost and a low<br />
monthly lease payment.
In September 2009, <strong>Texas</strong> House Bill (H.B.) 1937<br />
took effect, enabling cities to establish solar panel<br />
financing programs. Through this legislation, cities<br />
can fund <strong>the</strong> installation <strong>of</strong> solar panels on residential<br />
properties, which <strong>the</strong> homeowners <strong>the</strong>n repay over<br />
several decades via a small line item on <strong>the</strong>ir propertytax<br />
bills. Austin became <strong>the</strong> first city to act on this<br />
legislation.<br />
Workforce & Training Initiatives<br />
According to The Solar Foundation’s National Solar<br />
Jobs Census 2011, <strong>Texas</strong> ranks No. 7 among states in<br />
solar energy industry employment with 3,346 jobs.<br />
Nationally, solar energy industry employment was<br />
estimated to be 100,000 in 2011, and is projected to<br />
grow 24% in 2012. Solar energy jobs are split between<br />
installation (52%), manufacturing (24%), sales/<br />
distribution (18%), and o<strong>the</strong>r (6%).<br />
<strong>Texas</strong> is home to one <strong>of</strong> <strong>the</strong> largest semiconductor<br />
industries in <strong>the</strong> country, with 152 semiconductor machinery,<br />
semiconductor, and solar cell manufacturing<br />
firms employing nearly 30,000 workers with an average<br />
annual salary exceeding $103,183. The semiconductor<br />
manufacturing industry produces solar cells,<br />
integrated circuits, memory chips, microprocessors,<br />
transistors, and o<strong>the</strong>r devices related to <strong>the</strong> solar energy<br />
industry.<br />
A variety <strong>of</strong> educational programs, from one-day short<br />
courses to solar energy certificates and associates degrees<br />
are <strong>of</strong>fered within <strong>the</strong> state. See factbox at right.<br />
Solar <strong>Energy</strong>-Related Employment in <strong>Texas</strong><br />
Fourth Quarter 2011<br />
Solar Training Initiatives in <strong>Texas</strong><br />
The <strong>Texas</strong> State Technical College<br />
(TSTC) <strong>of</strong>fers solar courses<br />
at <strong>the</strong>ir Waco Campus and<br />
West <strong>Texas</strong> Campus in Sweetwater. These schools<br />
<strong>of</strong>fer Solar Technician Certificates and a Solar <strong>Energy</strong><br />
Technology A.A.S. Degree.<br />
Austin Community College (ACC) in<br />
Austin, <strong>Texas</strong> <strong>of</strong>fers design and installation<br />
courses for solar photovoltaic<br />
and solar <strong>the</strong>rmal systems. ACC is also<br />
developing curriculum for pr<strong>of</strong>essional certification<br />
and o<strong>the</strong>r solar-related continuing education<br />
courses.<br />
In 2009, <strong>the</strong> South-Central Solar Training<br />
Consortium (SCSTC) was awarded<br />
one <strong>of</strong> nine Solar Installer Instructor<br />
grants by <strong>the</strong> DOE. The SCSTC is a collaboration<br />
led by <strong>the</strong> Houston Community<br />
College System (HCCS) and Houston-based Ontility,<br />
a leading provider <strong>of</strong> solar installation training<br />
services. At <strong>the</strong> HCCS Nor<strong>the</strong>ast Campus, students<br />
take courses in solar PV and solar <strong>the</strong>rmal systems.<br />
Ontility also <strong>of</strong>fers training courses throughout <strong>the</strong><br />
state and on <strong>the</strong> internet.<br />
ImagineSolar <strong>of</strong>fers a variety <strong>of</strong> solar training programs<br />
in Austin, <strong>Texas</strong>, for new and experienced<br />
solar industry workers. These services include<br />
training for PV system design, installation, <strong>of</strong>f-grid<br />
PV, NABCEP certification, utility-scale PV, sales,<br />
and smart grid integration.<br />
Sector (Industry Code) Firms Employees<br />
Average<br />
Annual Wage<br />
Semiconductors, Solar Cells, and Related Devices Mfg. (334413) 129 29,014 $103,480<br />
Semiconductor Machinery Manufacturing (333242) 23 599 $88,816<br />
TOTALS 152 29,613 $103,183<br />
Source: <strong>Texas</strong> Workforce Commission<br />
SOLAR<br />
23
Bi<strong>of</strong>uels & Biomass<br />
Overview<br />
T<br />
exas is well placed to become a major leader in<br />
<strong>the</strong> bi<strong>of</strong>uels and biomass industry because <strong>the</strong><br />
state has all <strong>the</strong> ingredients for success. <strong>Texas</strong><br />
already leads <strong>the</strong> country in biodiesel production capacity.<br />
<strong>Texas</strong> has plentiful and diverse biomass resources,<br />
a highly skilled petroleum & petrochemicals<br />
workforce, strong research & development activity,<br />
and a supportive business climate.<br />
Bi<strong>of</strong>uels and biomass are similar but distinct renewable<br />
energy sectors that are well established, comprising<br />
4.5% <strong>of</strong> national energy consumption and 48% <strong>of</strong><br />
all renewable energy nationally in 2011. Unlike solar<br />
and wind energy, which are primarily sold into <strong>the</strong><br />
electric grid for residential and commercial users, bi<strong>of</strong>uels<br />
and biomass are especially important to <strong>the</strong><br />
transportation and industrial sectors.<br />
The transportation sector accounts for<br />
26% <strong>of</strong> bi<strong>of</strong>uels and biomass energy<br />
consumption, most <strong>of</strong> which is bi<strong>of</strong>uels<br />
such as ethanol and biodiesel. The biomass<br />
industry generates energy largely<br />
by burning organic materials, such as<br />
wood chips, as a substitute for fossil<br />
fuels. Landfills, wastewater treatment<br />
plants, and dairy farms are also common<br />
sources <strong>of</strong> biomass material. Industrial<br />
users account for 51% <strong>of</strong> U.S.<br />
bi<strong>of</strong>uels and biomass consumption.<br />
As <strong>the</strong> nation’s No. 3 crop & livestock<br />
24<br />
producing state and home to a large forestry industry,<br />
<strong>Texas</strong> is rich in potential biomass resources. The DOE<br />
ranks <strong>Texas</strong> No. 10 in <strong>the</strong> nation for biomass potential,<br />
including crop and forest residues, methane emissions,<br />
and potential energy crop farming.<br />
Ethanol<br />
Thousand Tons Biomass per Year<br />
Agriculture<br />
Urban Waste<br />
Ethanol bi<strong>of</strong>uels can be produced from corn, sugar<br />
cane, or o<strong>the</strong>r crops rich in sugar or starch, and is usually<br />
blended with gasoline. In 2011, nearly 14 billion<br />
gallons <strong>of</strong> ethanol were produced in <strong>the</strong> U.S., making<br />
up 8.9% <strong>of</strong> national gasoline consumption.<br />
While <strong>the</strong> Midwestern corn belt accounts for 91% <strong>of</strong><br />
<strong>the</strong> nation’s ethanol production, four ethanol plants<br />
have been built in <strong>the</strong> <strong>Texas</strong> Panhandle since 2008.<br />
Although <strong>Texas</strong> is not traditionally part <strong>of</strong> <strong>the</strong> corn<br />
belt, <strong>the</strong> state still ranks No. 7 nationally for ethanol<br />
production capacity, and <strong>Texas</strong>’ massive agricultural<br />
and forestry assets represent potential feedstock<br />
sources for next-generation bi<strong>of</strong>uels (see page 26).<br />
Forestry<br />
<strong>Texas</strong> Bi<strong>of</strong>uel and<br />
Biomass Resources<br />
Source: National <strong>Renewable</strong> <strong>Energy</strong> Laboratory
Dallas-based White <strong>Energy</strong> owns and operates a pair<br />
<strong>of</strong> ethanol plants in Hereford and Plainview, <strong>Texas</strong>.<br />
These West <strong>Texas</strong> plants can each produce up to 120<br />
million gallons per year, using corn and sorghum as<br />
feedstock. Both facilities became operational in 2008.<br />
Arkansas-based Murphy Oil USA opened its cornbased<br />
ethanol plant in Hereford, <strong>Texas</strong>, in 2011. This<br />
plant is able to produce 105 million gallons per year.<br />
Biodiesel<br />
Biodiesel is a bi<strong>of</strong>uel typically made from soybean oil,<br />
canola oil, animal fat, or waste vegetable oil. Much<br />
like ethanol, pure biodiesel is typically blended with<br />
traditional diesel. In 2011, a record 1.06 billion gallons<br />
<strong>of</strong> biodiesel was produced in <strong>the</strong> U.S., contributing<br />
1.6% <strong>of</strong> national diesel consumption. Biodiesel<br />
is less common than ethanol primarily because ethanol<br />
benefits from a more favorable set <strong>of</strong> federal mandates.<br />
Soybean oil is <strong>the</strong> most common feedstock for<br />
U.S.-produced biodiesel with 65% <strong>of</strong> <strong>the</strong> market in<br />
2009. Animal fats (21%) and o<strong>the</strong>r vegetable oils<br />
(14%) made up <strong>the</strong> remainder.<br />
As <strong>of</strong> December 2011, <strong>Texas</strong> is <strong>the</strong> largest biodiesel<br />
producing state with 328 million gallons <strong>of</strong> production<br />
capacity from eight refineries. <strong>Texas</strong> is an ideal location<br />
for biodiesel refining because <strong>the</strong> state accounts<br />
for 10.3% <strong>of</strong> U.S. diesel demand and is home to a<br />
world-class petrochemical workforce and related<br />
infrastructure assets.<br />
The largest biodiesel plant in <strong>the</strong> U.S. is located in<br />
Port Neches, <strong>Texas</strong>. The 180 million gallon per year<br />
facility was built in 2008 and is owned by <strong>Renewable</strong><br />
Bi<strong>of</strong>uels Inc., headquartered in Houston, <strong>Texas</strong>.<br />
<strong>Texas</strong> is <strong>the</strong> No. 1 state for<br />
biodiesel refining capacity.<br />
Green Earth Fuels <strong>of</strong> Houston, located in Galena<br />
Park along <strong>the</strong> Houston Ship Channel, is able to produce<br />
biodiesel from animal fats, vegetable oils, or a<br />
blend <strong>of</strong> <strong>the</strong> two, and has a capacity <strong>of</strong> 90 million gallons<br />
per year. The facility opened in 2007.<br />
The <strong>Renewable</strong> Bi<strong>of</strong>uels Inc. refinery in Port Neches, <strong>Texas</strong>.<br />
It is <strong>the</strong> largest biodiesel refinery in <strong>the</strong> United States.<br />
Biomass<br />
BIOFUELS & BIOMASS<br />
Biomass generation plants use wood and wood products,<br />
landfill waste, agricultural byproducts, and livestock<br />
waste to generate electricity. Although ethanol<br />
and biodiesel garner more attention, more biomassderived<br />
energy was consumed nationwide in 2011,<br />
mostly in <strong>the</strong> industrial, residential, and commercial<br />
energy sectors.<br />
Most biomass energy is generated on-site for industrial<br />
use, a common practice in <strong>the</strong> wood and paper industry.<br />
Increasingly, new facilities are being constructed<br />
to generate and sell this type <strong>of</strong> biomass energy<br />
to <strong>the</strong> electric grid. According to ERCOT, <strong>Texas</strong><br />
had at least 124 MW <strong>of</strong> biomass generation capacity<br />
in 2011. This number does not include companies that<br />
generate biomass energy for on-site industrial use.<br />
In November 2011, Sou<strong>the</strong>rn Power accepted delivery<br />
<strong>of</strong> <strong>the</strong> first fuel load <strong>of</strong> wood waste at its Nacogdoches<br />
Generating Facility. The plant, located in Sacul,<br />
<strong>Texas</strong>, is expected to ramp up to its full generating<br />
capacity <strong>of</strong> 100 MW in 2012. When completed, <strong>the</strong><br />
project will be one <strong>of</strong> <strong>the</strong> largest biomass-fueled electric<br />
generating facilities in <strong>the</strong> U.S.<br />
In 2012, East <strong>Texas</strong> Electric Cooperative (ETEC)<br />
plans to break ground on its wood-fueled biomass<br />
plant in Woodville, <strong>Texas</strong>. When completed in 2014,<br />
<strong>the</strong> plant will have a 50 MW capacity.<br />
In August 2011, Aspen Power’s 55 MW biomass<br />
generation facility went operational in Lufkin, <strong>Texas</strong>.<br />
The $117 million plant uses wood waste byproducts<br />
as a feedstock for electricity generation.<br />
25
BIOFUELS & BIOMASS<br />
O<strong>the</strong>r biomass facilities harvest natural gas from decomposing<br />
materials, such as landfill waste or cow<br />
manure. The resulting biogas can be burned to generate<br />
electricity or fur<strong>the</strong>r processed and fed into commercial<br />
natural gas pipelines. Urban landfills and cow<br />
manure from feedlots or dairy operations are excellent<br />
feedstock sources for this type <strong>of</strong> biomass production.<br />
As <strong>of</strong> January 2012, <strong>the</strong> EPA listed 32 <strong>Texas</strong> landfill<br />
gas operations capable <strong>of</strong> generating 101 MW <strong>of</strong> electricity<br />
and 64 million cubic feet <strong>of</strong> natural gas per day.<br />
Many <strong>Texas</strong> landfills harvest methane with this technology.<br />
One example is <strong>the</strong> Atascocita Recycling<br />
and Disposal Facility in Harris County, <strong>Texas</strong>. This<br />
facility collects and burns <strong>the</strong> methane gas naturally<br />
emitted by decomposing waste, selling <strong>the</strong> resulting<br />
electricity into <strong>the</strong> state’s power grid.<br />
Located near Stephenville, <strong>Texas</strong> and owned by Element<br />
Markets, Huckabay Ridge is <strong>the</strong> largest renewable<br />
natural gas plant in North America. Huckabay<br />
Ridge utilizes manure and o<strong>the</strong>r agricultural waste<br />
using a process called anaerobic digestion. The resulting<br />
biogas is <strong>the</strong>n purified to commercial natural gas<br />
standards and distributed through pipelines. The facility<br />
can produce an aggregate <strong>of</strong> one billion cubic feet<br />
<strong>of</strong> biogas per year. Element Markets, a biogas production<br />
and marketing company based in Houston, is currently<br />
constructing ano<strong>the</strong>r renewable natural gas<br />
plant using <strong>the</strong> same technology in Hereford, <strong>Texas</strong>.<br />
In February 2012, Royal Dutch Shell opened a bi<strong>of</strong>uels<br />
pilot plant in Houston, <strong>Texas</strong>. The plant will produce<br />
“drop-in” bi<strong>of</strong>uels which, unlike ethanol, are<br />
chemically identical to fossil fuel-based gasoline. This<br />
product has <strong>the</strong> advantage <strong>of</strong> being dropped into <strong>the</strong><br />
existing fuel supply without <strong>the</strong> need for ethanolspecific<br />
infrastructure and engine modifications.<br />
26<br />
Outlook for <strong>Texas</strong><br />
Bi<strong>of</strong>uels & Biomass<br />
Building on <strong>the</strong> state’s strong agricultural and forestry<br />
production base, <strong>Texas</strong> researchers and businesses are<br />
investing in new renewable bi<strong>of</strong>uels and biomass technologies<br />
to maintain <strong>the</strong> state’s position as <strong>the</strong> nation’s<br />
energy capital. Like o<strong>the</strong>r forms <strong>of</strong> renewable<br />
energy, <strong>the</strong> modern bi<strong>of</strong>uels and biomass industry is a<br />
relatively young industry that expects to evolve considerably<br />
before achieving widespread adoption.<br />
First generation bi<strong>of</strong>uels currently use corn, soybeans,<br />
and o<strong>the</strong>r food crops grown on prime agricultural<br />
land. Because this land is in high demand, it is difficult<br />
to economically produce first generation bi<strong>of</strong>uels<br />
in significant volumes at competitive prices.<br />
Therefore, most bi<strong>of</strong>uel research focuses on next generation<br />
bi<strong>of</strong>uels, such as cellulosic ethanol and algaederived<br />
bi<strong>of</strong>uels, that utilize non-food feedstock<br />
sources that can be economically produced in large<br />
volumes. These technologies have not yet reached<br />
commercial production status, although a few cellulosic<br />
ethanol plants are projected to begin small scale<br />
production nationwide in 2012.<br />
Cellulosic Bi<strong>of</strong>uels<br />
Cellulosic ethanol can be produced using a method<br />
similar to <strong>the</strong> corn-based ethanol process, with an additional<br />
step added to convert cellulose-rich plant ma-<br />
The Huckabay Ridge Project in Stephenville produces and<br />
distributes biogas made from agricultural waste.
terial into starches and sugars. The feedstock for cellulosic<br />
ethanol can be almost any plant material, which<br />
allows <strong>the</strong> industry to focus on non-food feedstock.<br />
Agricultural and forestry waste are prime candidates,<br />
such as corn stalks and cobs, cotton gin trash, and<br />
lumber residue.<br />
O<strong>the</strong>r research focuses on purpose-grown energy<br />
crops that can flourish on low value land, ideally in<br />
semiarid climates or using brackish water. For example,<br />
<strong>Texas</strong> Tech University researchers are focusing<br />
on potential feedstocks suitable for arid and semiarid<br />
climates in <strong>the</strong> Southwest United States, such as<br />
switchgrass, a fast-growing native grass that can be<br />
cultivated on marginal land.<br />
KiOR, a bi<strong>of</strong>uels company based in Pasadena, <strong>Texas</strong>,<br />
hopes to be <strong>the</strong> first to achieve commercial production<br />
<strong>of</strong> cellulosic bi<strong>of</strong>uels. The company’s proprietary<br />
technology converts low-value byproducts such as<br />
wood chips into “biocrude,” a product chemically<br />
similar to conventional crude oil. Biocrude can be sold<br />
to conventional refiners and processed into gasoline,<br />
diesel, and o<strong>the</strong>r products. KiOR operates <strong>the</strong>ir R&D<br />
lab, pilot plant, and demonstration facility in Pasade-<br />
<strong>Texas</strong> Powers Up Two <strong>of</strong> <strong>the</strong> Nation’s<br />
First Biogas-to-<strong>Energy</strong> Facilities<br />
Ameresco, a U.S.-based energy services provider,<br />
has partnered with <strong>the</strong> cities <strong>of</strong> San Antonio and<br />
Dallas on two innovative biogas energy recovery<br />
facilities. Biogas is a byproduct <strong>of</strong> <strong>the</strong> sewage treatment<br />
process that is typically flared <strong>of</strong>f at treatment<br />
plants.<br />
In October 2010, <strong>the</strong> San Antonio Water System became<br />
<strong>the</strong> nation’s first water district to hook up a<br />
biogas facility to a commercial gas pipeline. The city<br />
estimated it will save $200,000 annually.<br />
In April 2011, <strong>the</strong> City <strong>of</strong><br />
Dallas Water Utilities announced<br />
<strong>the</strong> completion<br />
<strong>of</strong> its own biogas facility,<br />
which is expected to save<br />
<strong>the</strong> city around $1.5 million<br />
annually.<br />
na. Construction on its 11 million gallon per year<br />
commercial plant in Mississippi is expected to be <strong>the</strong><br />
first commercial-scale cellulosic bi<strong>of</strong>uel plant when it<br />
is completed mid-2012.<br />
Algae Bi<strong>of</strong>uels<br />
BIOFUELS & BIOMASS<br />
KiOR Biocrude demonstration facility in Pasadena, <strong>Texas</strong><br />
Ano<strong>the</strong>r attractive bi<strong>of</strong>uel source is algae. Algae cells<br />
are oil-rich and can rapidly grow in ei<strong>the</strong>r closed tanks<br />
or open ponds. The fast-growing characteristics <strong>of</strong><br />
microalgae make this emerging technology very<br />
promising in terms <strong>of</strong> land use. An estimated 5,000<br />
gallons <strong>of</strong> biodiesel can be harvested per acre per year<br />
from microalgae, which far exceeds <strong>the</strong> 60 gallons per<br />
acre possible from soybean-based biodiesel.<br />
Algae-derived bi<strong>of</strong>uels are also attractive because<br />
microalgae are capable <strong>of</strong> thriving with brackish water<br />
and marginal land, resources which are cheap and not<br />
in competition with food production.<br />
UT-Austin is home to one <strong>of</strong> <strong>the</strong> world’s largest collections<br />
<strong>of</strong> algae, <strong>the</strong> Culture Collection <strong>of</strong> Algae<br />
27
BIOFUELS & BIOMASS<br />
(UTEX). It has more than 3,000 strains and supplies<br />
<strong>the</strong>m to scientists and businesses around <strong>the</strong> world for<br />
research and development purposes.<br />
In 2010, Joule Unlimited built a bi<strong>of</strong>uels pilot plant<br />
in Leander, <strong>Texas</strong> using a microorganism similar to<br />
algae. The Massachusetts-based company has developed<br />
a closed-loop process using sunlight, carbon<br />
dioxide, non-potable water, and a microorganism catalyst<br />
to create ethanol and diesel. Following on <strong>the</strong><br />
success <strong>of</strong> <strong>the</strong> Leander pilot plant, <strong>the</strong> company is<br />
building a demonstration-scale plant in New Mexico.<br />
The Southwest Research Institute (SwRI) in San<br />
Antonio is one <strong>of</strong> <strong>the</strong> oldest applied research and development<br />
organizations in <strong>the</strong> nation. SwRI investigates<br />
a wide range <strong>of</strong> engineering challenges, including<br />
biodiesel. The institute’s full-service facilities<br />
include chemical analysis, fuel blending, lab-scale<br />
production, and emissions testing.<br />
Government Initiatives<br />
To date, federal and state governments have played a<br />
large role in developing <strong>the</strong> biomass industry through<br />
renewable fuel standards, production tax credits, and<br />
support for research and development activities.<br />
The <strong>Texas</strong> Tax Code <strong>of</strong>fers a bi<strong>of</strong>uel tax exemption;<br />
biodiesel or ethanol blended with taxable diesel is<br />
exempt from <strong>the</strong> $0.20 per gallon diesel fuel tax.<br />
Federal bi<strong>of</strong>uels subsidies have taken <strong>the</strong> form <strong>of</strong> an<br />
income tax credit for companies that blend bi<strong>of</strong>uels<br />
28<br />
into <strong>the</strong> petroleum-based fuel supply. The ethanol<br />
subsidy, first enacted in 1978, has ranged between<br />
$0.40 and $0.60 per gallon over <strong>the</strong> years. The cornbased<br />
ethanol subsidy was allowed to expire at <strong>the</strong> end<br />
<strong>of</strong> 2011 and is unlikely to be renewed. The $1.00 per<br />
gallon subsidy for cellulosic ethanol remains in place<br />
for now, and could be renewed before it also expires<br />
at <strong>the</strong> end <strong>of</strong> 2012.<br />
A similar $1.00 per gallon federal tax credit for biodiesel<br />
blending was established in 2005. The biodiesel<br />
credit expired at <strong>the</strong> end <strong>of</strong> 2009, was reinstated for<br />
2011, and expired again in January 2012. While <strong>the</strong>se<br />
programs have helped develop bi<strong>of</strong>uel production in<br />
<strong>the</strong> past, this regulatory uncertainty discourages investment.<br />
Now that <strong>the</strong> ethanol and biodiesel production tax<br />
credits have expired, <strong>the</strong> federal <strong>Renewable</strong> Fuel<br />
Standard (RFS) will assume a greater role in promoting<br />
<strong>the</strong> bi<strong>of</strong>uels industry. The RFS was enacted in<br />
2005 to encourage <strong>the</strong> development <strong>of</strong> renewable<br />
transportation fuels by mandating <strong>the</strong>ir usage. For<br />
2012, <strong>the</strong> requirement amounts to 15.2 billion gallons<br />
<strong>of</strong> renewable fuels, including ethanol and biodiesel,<br />
which is projected to be 9.3% <strong>of</strong> all fuel used nationwide<br />
in 2012.<br />
Created in 2005 by <strong>the</strong> <strong>Texas</strong> Legislature, <strong>the</strong> <strong>Texas</strong><br />
Emerging Technology Fund (TETF) provides <strong>Texas</strong><br />
with an advantage in <strong>the</strong> research, development, and<br />
commercialization <strong>of</strong> new technologies. As <strong>of</strong> mid-<br />
2012, <strong>the</strong> TETF has invested over $11.7 million in<br />
emerging bi<strong>of</strong>uels and biomass technology.<br />
In 2007, The TETF awarded $4 million to <strong>Texas</strong><br />
AgriLife Research, part <strong>of</strong> <strong>the</strong> <strong>Texas</strong> A&M System,<br />
TETF Invests in Photon8<br />
In 2010, <strong>the</strong> <strong>Texas</strong> Emerging Technology Fund invested<br />
$1 million in Photon8, a Brownsville, <strong>Texas</strong>,<br />
algae bi<strong>of</strong>uels company. Photon8 is working to<br />
commercialize a novel process that converts algaebased<br />
lipids into renewable bi<strong>of</strong>uel. The company<br />
is working in partnership with <strong>the</strong> University <strong>of</strong><br />
<strong>Texas</strong> at Brownsville and <strong>Texas</strong> Southmost College.
as a component <strong>of</strong> <strong>the</strong> $49 million Algae Bi<strong>of</strong>uels<br />
Consortium, a multi-institution, multi-state effort to<br />
conduct algae research and development leading to<br />
economically viable commercial-scale production <strong>of</strong><br />
bi<strong>of</strong>uels. In addition to studying algae-based bi<strong>of</strong>uels,<br />
<strong>Texas</strong> AgriLife Research is also researching o<strong>the</strong>r<br />
bi<strong>of</strong>uel feedstock, such as sorghum, energy cane, and<br />
various oilseeds.<br />
Workforce & Training Initiatives<br />
Precise employment figures for <strong>the</strong> U.S. bi<strong>of</strong>uels &<br />
biomass industry are not available, but estimates show<br />
that <strong>Texas</strong> is a leader in industry employment. In<br />
2009, <strong>the</strong> Biomass Power Association estimated countrywide<br />
biomass employment at 14,000 jobs.<br />
In 2008, <strong>the</strong> National Biodiesel Board estimated<br />
52,000 jobs in <strong>the</strong> biodiesel industry nationwide. A<br />
separate study in 2008 by <strong>the</strong> Biodiesel Coalition <strong>of</strong><br />
<strong>Texas</strong> estimated <strong>the</strong> statewide economic impact <strong>of</strong> <strong>the</strong><br />
biodiesel industry to be nearly 10,000 jobs.<br />
<strong>Texas</strong> arguably has <strong>the</strong> largest pool <strong>of</strong> skilled workers<br />
for bi<strong>of</strong>uels and biomass production. The Lone Star<br />
State is home to <strong>the</strong> nation’s largest energy and chemicals<br />
workforce. <strong>Texas</strong> ranks No. 1 in employment<br />
with more than 53,000 workers in petroleum refining<br />
and basic chemical manufacturing industries. These<br />
Bi<strong>of</strong>uels and Biomass-Related Employment in <strong>Texas</strong><br />
Fourth Quarter 2011<br />
Sector (Industry Code) Firms Employees<br />
BIOFUELS & BIOMASS<br />
<strong>Texas</strong> AgriLife Research—Pecos, <strong>Texas</strong><br />
are high wage, high skill workers with an average<br />
annual salary <strong>of</strong> nearly $110,000, according to <strong>the</strong><br />
U.S. Bureau <strong>of</strong> Labor Statistics and <strong>the</strong> <strong>Texas</strong> Workforce<br />
Commission. Many <strong>of</strong> <strong>the</strong> industrial processes<br />
and chemical transformations used in bi<strong>of</strong>uels production<br />
are very similar to processes used in oil refining<br />
and petrochemical manufacturing. While most <strong>of</strong> <strong>the</strong>se<br />
workers are not currently involved in <strong>the</strong> bi<strong>of</strong>uels<br />
and biomass industry, <strong>the</strong>ir skills translate well from<br />
fossil-fuel based industries used in renewable bi<strong>of</strong>uels.<br />
The <strong>Texas</strong> workforce is also No. 2 nationally for<br />
building pipes, valves, tanks, and specialty equipment<br />
for chemical processing.<br />
Average<br />
Annual Wage<br />
Petroleum Refining (32411) 96 21,540 $116,792<br />
Basic Chemical, Petrochemical, Ethanol, Biodiesel Mfg. (3251) 230 31,522 $105,300<br />
TOTALS 326 53,062 109,965<br />
Source: <strong>Texas</strong> Workforce Commission<br />
29
<strong>Office</strong> <strong>of</strong> <strong>the</strong> Governor<br />
Economic Development and Tourism<br />
PO Box 12428, Austin, TX 78711<br />
512-936-0101<br />
www.<strong>Texas</strong>WideOpenForBusiness.com