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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

5 of 39 DOCUMENTS

Engineering News-Record

August 11, 2008

$5-billion Scheme To Deliver Texas Wind Energy Approved

BYLINE: Staff

SECTION: News; Pg. 17 Vol. 261 No. 4

LENGTH: 292 words

More than a dozen utilities have expressed interest in building what will be the largest utility investment in Texas
history.
The nearly $5-billion project is designed to bring west Texas wind power to other parts of the state. The Public Util-
ity Commission of Texas on July 17 approved the project to build a network of transmission lines and facilities that has
been dubbed a "renewable-energy superhighway."
The $4.93-billion project will carry up to 18,456 MW of wind energy to parts of the state where demand for power
is high and expected to grow as population increases by an estimated 11 million people over the next three decades.
The commission will hold a hearing during the first week of December to determine who will build the transmis-
sion lines, says Tom Hadley, PUCT spokesman.
PUCT expects construction to be completed and the lines in service in four to five years. Then the cost of the more
than 2,000 miles of power lines and related facilities will be passed on to residential customers at a rate of about $4 a
month.
Dallas-based Oncor Electric Delivery Co. and five other of the state's largest utility companies have formed a con-
sortium to finance, build and operate nearly half of the transmission lines. Joining Oncor are Electric Transmission
Texas LLC, Austin; AEP Texas Central Co., Corpus Christi; AEP Texas North Co., Abilene; the Lower Colorado River
Authority Transmission Service Corp., Austin; and Sharyland Utilities LP, McAllen.
Once the firms are selected, specific applications to build will be prepared, Hadley says. "We expect those to be
filed at the PUC by the end of 2009," he adds. PUCT must approve cost estimates, "then the commission will approve a
certificate [of convenience and necessity]" Hadley says.

LOAD-DATE: August 18, 2008

LANGUAGE: ENGLISH

PUBLICATION-TYPE: Magazine

JOURNAL-CODE: EN

Copyright 2008 The McGraw-Hill Companies, Inc. http://www.mcgrawhill.com

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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

All Rights Reserved

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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

17 of 39 DOCUMENTS

Engineering News-Record

June 30, 2008

Regulation, Cost Turbulence Generate a Clean Power Play;

Momentum for cleaner power, like wind, grows exponentially
BYLINE: Tudor Van Hampton

SECTION: Cover Story; Pg. 22 Vol. 260 No. 22

LENGTH: 2891 words

In the game of Monopoly, the Electric Co. is a safe, dull play; it is priced low and generates modest income. In the
real world, though, the electricity business is rougher than a rodeo bull ride: Governments have joined environmental
activists in challenging permit applications for new coal-
fired powerplants, prices for coal and natural gas are volatile as never before, and states are requiring utilities to
meet growing proportions of electricity demand with renewable energy.
The unsettled action has been escalated further by Congress' piecemeal extension of renewable-energy investment-
and production-tax credits, increasing the risk in long-term investment decisions. Developers insist that renewable-en-
ergy projects will die if the credits expire, but investor-owned utilities, driven by re- newable-portfolio standards and
with recourse to cost recovery, say they will build even without the credits.
The most active renewables today--wind, solar and geothermal--make up just 10% of the renewables market. Wind-
energy development has grown rapidly in the last decade, and solar and geothermal energy also have benefited from
supportive government policies in recent years. One sign of renewable energy's new vitality is the swelling flow of ven-
ture capital to the market.
Wind energy is the fastest-growing renewable sector because it is a maturing technology with potential for wide-
spread application. Wind turbines are popping up everywhere. U.S. wind capacity last year grew 5,244 MW, an increase
of 45%. "That's in an environment where coal plants are having a tough time getting approved," says Thomas S. Key,
Knoxville, Tenn.-based technical lead for renewables and hydropower at the Electric Power Research Institute.
The U.S. is the second-largest wind-energy market and is posted to overtake Germany by the end of next year, ac-
cording to the Brussels, Belgium-based Global Wind Energy Council.
Wind energy has led the growth in renewable energy because it is the easiest technology to use, Key says. But
sources agree that renewable energy is a policy-driven business. The most significant policies in the U.S. have been re-
newables-portfolio standards (RPS) and investment- and production-tax credits.
An RPS essentially is a requirement that retail electricity suppliers meet demand with a set minimum quantity of
power from renewable sources. Today, 25 states and the District of Columbia, representing 46% of national retail elec-
tricity sales, have set mandatory RPS quotas. Repeated efforts to establish a national RPS have failed.
Solar energy, while growing, is a tiny sliver of the renewable-energy market. In 2004, residential installations gen-
erated more than 90% of the power from solar energy, according to the Energy Information Administration. But utility-
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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

scale solar plants are now being built, suggesting the potential for substantial further growth.
Utility-scale geothermal powerplants were first built in the 1960s, but the U.S. market has been restricted to a few
areas in the West where geothermal energy is relatively accessible. Aided by investment-tax credits in the energy legis-
lation of 2005, the industry has experienced growth in several states where it has not previously.
RPS is a state initiative, but Congress enacted the first production-tax credit in 1992 for wind energy. It has had a
bumpy ride, with repeated expirations and renewals, and was extended to geothermal energy developments in the En-
ergy Policy Act of 2005. It is set to expire at the end of 2008. The investment-tax credit, applied to solar energy, also
was enacted in EPAct 2005. Subsequently extended, it also is scheduled to expire at the end of the year.
Distance from load centers is a major drag on the development of renewable-energy resources, so long transmission
lines must be built to successfully develop them. States increasingly are recognizing this, says a report published in
April by Lawrence Berkeley National Laboratory, and they are enacting legislation and other policies to encourage
transmission construction.
RPS has pushed the market, but the production-tax credit has pulled it, says Jack Levi, cofounder of National Wind
LLC, Minneapolis, a developer. "The economic justification is what drives things in the long run," he notes.
But Congress' fickleness has made the PTC an unreliable engine. The stop-and-go market has made manufacturers
reluctant to build capacity for it. "The industry needs a long-term, consistent industry program," says Larry Stoddard,
manager of renewable-energy consulting for Black & Veatch, Kansas City.
Brisk Wind
But the volatility of fossil-fuel prices is making wind competitive. Wind farms cost about $2,000 per installed kilo-
watt and sell power for 6¢ to 10¢ per kilowatt-hour. "Wind is the most competitive source of producing renewable elec-
tricity," says Gabriel Alonso, chief development officer of Horizon Wind Energy, Houston. "We have more than 11,500
MW of projects in our pipeline and another 4,000 MW of prospects."
More domestic turbine manufacturing plants are planned, and 1,000-MW farms will soon begin to sprout, sources
say. Texas-based tycoon T. Boone Pickens Jr. holds claim to the world's largest proposed plant, at 4,000 MW, which
calls for 1,500 turbines to be installed near Amarillo through 2011 (ENR 4/28 p. 7).
A Dept. of Energy report last month said it was "ambitious" but achievable for wind to win 20% of U.S. energy
market share by 2030. Adding 290,000 MW of wind energy will cost $200 billion, the report says (ENR 5/19-26 p. 9).
Building wind farms is not a breeze. "You really need to look at the four Rs," Alonso says. They are real estate,
rights to connect to the grid, resources and regulations. Projects take two to six years to develop, and the turbines last
for up to 30 years or more. Horizon is installing two of the five largest wind farms currently under construction in the
U.S.
Procuring capital equipment for wind farms has been a challenge. "Things have gone from bad to worse over the
last three to four years." says Levi. "We're just beginning to see a reversal." Last year, manufacturers were telling him
they would have nothing until 2010. Now they are hinting he can get something next year.
The industry's capacity for manufacturing and erecting turbines is showing signs of fatigue. Labor markets are
tight, material costs are on the rise, and even the heavy-lift cranes needed to build the towers are in short supply. "Man-
itowoc can't make enough of them," says Jim Lee, president of northern operations for Appleton, Wis.-based general
contractor Boldt Co., adding that some manufacturers are quoting cranes 15 months out. Turbine rotors and crane rotat-
ors are competing for the same gear-manufacturing space, suppliers say.
Contracting capacity also is tight in this specialty market. "The good ones are backlogged quite a bit," says Levi.
Typically, the owner-developer will do wind assessment of the site, then get interconnection and power purchase agree-
ments, says Jerry Grundter, vice president of project development for Minneapolis-based Mortenson Construction Inc.,
a major wind-farm contractor. At that point, the developer invites the contractor to propose or negotiate. Most contracts
are lump-sum for engineering, procurement and construction of the balance of plant with schedule and price risk. The
customer normally procures the turbine equipment.
Erecting wind turbines is repetitive work that calls for tight safety measures and the ability to stop work on a dime.
The average turbine size is 1.5 MW, but that has been increasing, with 3-MW units now going up onshore. High winds,
bad weather, confined spaces and gut-wrenching heights make the work more like rock climbing.
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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

The steel towers have grown exponentially in size, with their fiberglass-reinforced rotors increasing from 10 to 120
meters in diameter since 1981. Crane manufacturers for the last 10 years have been in a race to build a more efficient
turbine crane. It culminated last year in Manitowoc's GTK, designed entirely around wind-turbine erection (ENR
10/15/07 p. 10). Crane makers have optimized load charts and added special jibs to their crawlers to lift the nacelle and
rotor units at nearly 90° angles, while other producers have shrunk the width of crawler tracks to cut roadbuilding costs.
Hot Stuff
Another renewable energy resource just received a boost from the Bureau of Land Management and the U.S. Forest
Service. On June 13, it released a Draft Programmatic Environmental Impact Statement (PEIS) for leasing federal lands
in the West and Alaska for geothermal power development. The proposal would open 192 million acres for the purpose.
By 2025, these lands could host 242 geothermal plants producing 12,100 MW of power, say officials.
"It's stunning how dramatically this document points out how needed this [environmental assessment] has been,"
says Karl Gawell, executive director of the Geothermal Energy Association, Washington, D.C. "It could lead to a whole
new generation of geothermal projects," he says.
Geothermal resource development in the U.S. surged following the extension of the production-tax credit to geo-
thermal energy in the Energy Policy Act of 2005. Total installed capacity rose from 2,830 MW to nearly 2,940 between
March 2006 and January 2008 after years with almost no growth, according to GEA figures. The total number of pro-
jects in development nearly doubled in that period, to 83 from 44 .
Now, with more incentives for geothermal development, more innovative ways of using geothermal energy are at-
tracting interest. A geothermal workshop in May 2006 hosted by the National Renewable Energy Laboratory, Boulder,
Colo., produced a consensus that by 2050 the U.S. could produce more than 260,000 MW of electricity and more than
1.6 million MW of thermal energy from geothermal resources.
Geothermal powerplants use a variety of systems to generate electricity, but all use heat from the earth itself as the
energy source to drive a turbine. Like nuclear plants, they have high initial capital costs and low fuel and maintenance
costs. But a geothermal plant's cost per installed kilowatt can be as low as $2,800, according to GEA. Generation costs
are 5¢ to 7.5¢ per kilowatt-hour. Estimates for the new nuclear plants can be more than $6,300 per installed kW.
Despite 40 years of operating experience, the industry is "essentially in its infancy," says Bill Lewis, senior project
manager at Power Engineers Inc., Hailey, Idaho. Power Engineers is providing engineering and procurement support to
Enel North America for the 14-MW Salt Wells and 34-MW binary geothermal plants being built by TIC-The Industrial
Co. in Fallon, Nev.
Lewis notes that geothermal energy can be found at many depths, requiring differing investments "if we make the
choice the energy is there." Most efforts to date have been devoted to "lower-hanging fruit, [but] it is becoming more
common now to see the lower temperatures being utilized," he adds.
Exploiting the low-temperature, 165°F water at Chena Hot Springs Resort, Fairbanks, Alaska, drew United Techno-
logies Corp., Hartford, Conn., into its first geothermal project. UTC in 2006 completed the resort's 400-kW geothermal
plant using a system based on its Carrier division's chiller technology. Solar-energy development is fermenting. A report
this month by Oakland, Calif.-based Clean Edge Inc. and the Co-op America Foundation, Washington, D.C., asserts that
solar energy now provides less than 0.1% of U.S. electricity but realistically could meet 10% of total U.S. demand by
2025 with a combination of solar photovoltaics (PV) and concentrated solar power (CSP).
It could happen. Nellis Air Force Base's 15-MW PV array was activated last October near Las Vegas (ENR 5/14/07
p. 16). In April, SunEdison and SkyPower Corp. broke ground on a 19-MW solar PV energy park, North America's
largest, in Stone Mills, Ontario. These are enormous arrays for PV, which is more commonly deployed in sizes under 1
MW.
But CSP stations of several hundred MW now are being proposed. In February, Arizona Public Service Co. an-
nounced plans to build a 280-MW parabolic-trough-mirror station that will be larger than any solar powerplant operat-
ing today (ENR 2/28 p. 8).
Two California utilities have agreed to buy up to 1,750 MW of power from two plants proposed by Stirling Energy
Systems Inc., Phoenix. The plants will be arrays of 25-kW "SunCatchers," which combine a 37-ft-dia. mirrored concen-
trator dish with a Stirling external-combustion engine. In April, Irish renewable-energy developer NTR plc agreed to in-
vest $100 million and take a controlling interest in SES, moving the project significantly forward.
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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

Sandia National Laboratory has been conducting research with six SunCatchers. Chuck Andraka, dish-engine pro-
jects leader, says the research is reducing the costs by using "modern design tools and modern manufacturing methods"
instead of the rule-of-thumb design criteria formerly applied for components like the structure to support the solar dish.
The design tools, coupled with optical design tools developed at Sandia, have reduced the weight of a unit by 25%, he
says. Keeping cost down for CSP is easier than for PV because it uses steel and glass, rather than specialty materials, he
notes.
Scaling Up
With extensive piping, electrical distribution and civil work, solar thermal stations will be "a huge scale-up from
what the electrical construction market has seen," says James Diven, senior project manager in the URS Denver office.
The stress on local resources, "requiring water in areas where there isn't any water," will be another challenge, he says.
Still, he is bullish on solar-energy growth. "While the country is looking at recession, I don't think you're going to see a
slowdown in this business," he concludes.
Ultimately, solar and other renewable technologies must compete "in the wild," without relying on tax credits or
other subsidies. "Utilities are looking for 10¢ to 15¢ per kWh and $2 to $3 per installed Watt" for solar projects, says
Ron Kenedi, vice president, solar electric solutions group for Sharp Solar, Huntington Beach, Calif. "We can't do that
now with standard technology, but thin-film [PV] is helping lower costs. Our price has gone down 73% in 20 years."
The PV industry's capacity for module production has been limited by the availability of polysilicon, says Julie
Blunden, vice president public policy for SunPower Corp., San Jose, Calif. But demand for solar cells has created a
surge in capital expansion throughout the value chain that will eliminate the polysilicon bottleneck, she says.
The capital cost of solar-cell manufacturing plants ranges from hundreds of millions to $1 billion, but manufactur-
ing costs have declined 10% to 25% in the last three years, Blunden says.
PV efficiency ranges from 8% to 22%, depending on the cell's architecture. SunPower last month announced it had
produced a full-scale, 5-in. prototype cell that is 23.4% efficient, claiming a world record for a large-area solar cell.
The U.S. has entered a new era of high energy costs disrupting many markets. It will be a long time before the
Electric Co. is a safe, dull play again.
Renewable-Energy Production
Year Geothermal
Installed MW Generation*
2003 2,133 14,424,231
2004 2,152 14,810,975
2005 2,285 14,691,745
2006 2,274 14,568,029
2007 2,294 14,838,636

*Thousand kilowatt-hours SOURCE: ENERGY INFORMATION ADMINISTRATION

Top U.S. Wind Projects Completed in 2008*
Capacity Project State
(MW) Num-
ber of
Tur-
bines-
Tur-
bine
Rating
(MW)
Tur-
bine
Sup-
plier-
Devel
 Page 7
$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

oper
209 Roscoe Texas
2091
Mit-
subish
iE.On
Cli-
mate
& Re-
new-
ables
142.5 Capricorn
Ridge Ex- Texas
pansion 951.5
GE
En-
ergy-
FPL
En-
ergy
126.5 Champion Texas
552.3
Sieme
nsE.O
n Cli-
mate
& Re-
new-
ables
120 Stanton
Energy Cen- Texas
ter 801.5
GE
En-
ergy-
In-
vener
gy
104 Lone Star II Texas
522Ga
mesa
RES
Amer-
icas/H
orizon

*COMPLETED THROUGH MARCH 2008.

Top U.S. Wind Projects Under Construction**
Capacity Project StateNu
(MW) mber of
Turbines-
Turbine
Rating
(MW)Tu
 Page 8
$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

rbine
Supplier-
Develope
r
400 Fowler
Ridge
Phase I Indi-
ana2221.
8NABP
Alternat-
ive En-
ergy/Do
minion
Energy
258 Panther Texas172
Creek 1.5GE
En-
ergyE.On
Climate
& Re-
newables
249 Pyron Wind Texas166
Farm 1.5GE
En-
ergyE.On
Climate
& Re-
newables
201.3 Pioneer Iowa122
Prairie I 1.65Vest
asHori-
zon
201 Meridian Kansas67
Way 3VestasH
orizon

SOURCE: AMERICAN WIND ENERGY ASSOCIATION. **REPORTED AS OF MAY 5, 2008. NA=not avail-
able
Turbines Are Getting Bigger
1981 1985 1990
1996
1999
2000
2005
2008
rotor
diameter (M) 10 17 2740
5071
1041
20
rated
capacity (kW) 25 100 2255
5075
01,6
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$5-billion Scheme To Deliver Texas Wind Energy Approved Engineering News-Record August 11, 2008

503,
6005
,000

LOAD-DATE: July 7, 2008

LANGUAGE: ENGLISH

GRAPHIC: photograph, The Answer. Wind energy (top) dominates the growing renewables sector, but solar installa-
tions (right) are multiplying and geothermal plants (bottom) are reaching new territory., PHOTO TOP COURTESY OF
BARNHART CRANE;
photograph, The Answer. Wind energy (top) dominates the growing renewables sector, but solar installations (right) are
multiplying and geothermal plants (bottom) are reaching new territory., CENTER COURTESY OF TWC CONSTRUC-
TION INC.;
photograph, The Answer. Wind energy (top) dominates the growing renewables sector, but solar installations (right) are
multiplying and geothermal plants (bottom) are reaching new territory., BOTTOM COURTESY OF POWER ENGIN-
EERS INC.
photograph, Tall Order. Growing size of turbines is spurring specialized cranes., PHOTO TOP COURTESY OF TER-
EX-DEMAG;
illustration, Turbines Are Getting Bigger, GRAPH: SOURCE AMERICAN WIND ENERGY ASSOCIATION
photograph, LEVI
illustration, 1 Oil cooler 2 Water cooler for generator 3 High-voltage transformer 4 Ultrasonic wind sensors 5 VMP-Top
controller with converter 6 Service crane 7 Generator 8 Composite disc coupling 9 Yaw gears 10 Gearbox 11 Mechanic-
al disc brakes 12 Machine foundation 13 Blade bearing 14 Blade hub 15 Blade 16 Pitch cylinder 17 Hub controller,
SOURCE: VESTAS WIND SYSTEMS A/S GRAPH: SOURCE AMERICAN WIND ENERGY ASSOCIATION
diagram, DIAGRAM TOP COURTESY OF GEOTHERMAL ENERGY ASSOCIATION;
photograph, PHOTO TOP COURTESY OF POWER ENGINEERS INC.;
photograph, Underground Treasure. Geothermal work may expand exponentially on leased federal land., BOTTOM
COURTESY OF ORMAT
photograph, Testing. Concentrated solar power project at the Sandia lab uses external combustion engine., PHOTOS
COURTESY OF SANDIA NATIONAL LABORATORY
photograph, PHOTOS COURTESY OF SANDIA NATIONAL LABORATORY

PUBLICATION-TYPE: Magazine

JOURNAL-CODE: EN

Copyright 2008 The McGraw-Hill Companies, Inc. http://www.mcgrawhill.com

All Rights Reserved