Editor's Note: To celebrate Houston's 175th anniversary, we asked leaders to imagine the city's future. In this essay, Michael Skelly, president of Clean Line Energy Partners, lays out his vision of how Houston can become the capital of renewable energy.
When I first moved to Texas in the late 1990s, renewable energy was considered a quaint notion which would never amount to much of anything. Around that time in Houston, wind and solar energy weren’t really on anyone’s radar. It seemed like everyone in town was either working for Enron or wanting to work there, and everyone else was focused on a new dot.com. In our generally wide-open city, there was no particular aversion to clean energy, just more of a “huh?” factor.
But over the past decade, Houston has emerged as one of the leading cities for the renewable energy industry. Almost every major wind company in the U.S. has a significant presence in Houston, including Duke, Shell, BP, NextEra, Pattern, and EDPR (formerly Horizon Wind). These companies account for well over half of the of the wind turbines installed in the United States.
As Houston celebrates its 175th birthday, some wonder if renewable energy is here to stay in Houston or if the last decade is simply an aberration. Will Houston return solely to its hydrocarbon roots or will renewable energy play an important role in our city’s continued prosperity and growth?
Almost every major wind company in the U.S. has a significant presence in Houston, including Duke, Shell, BP, NextEra, Pattern, and EDPR (formerly Horizon Wind). These companies account for well over half of the of the wind turbines installed in the United States.
As it turns out, Texas now leads the country in wind energy, and is moving along in solar. In 2011, according to the Electric Reliability Council of Texas (ERCOT), 8.5% of the electricity consumed in the state came from wind energy. And as everyone knows, with our hot, muggy summers, we are voracious consumers of electricity, making 8.5% a LOT of electricity.
On a really blustery day, we get almost 30% of our electricity from wind. This is up from right around 0% a dozen years ago. We got here through a combination of a slight push from the state that started with Gov. Bush, federal tax incentives, tremendous wind resources along our coast and in West Texas, and a business friendly environment. Houston companies were a big part of this multi-billion dollar build-out.
This industry participant thinks clean energy is here to stay because this is a city that knows energy, and because Houston’s companies are particularly adept at tackling large infrastructure projects.
Silicon Valley has touted itself as the energy hub of the future because of its technological prowess – but Houston will be hard to unseat as renewable energy plays a bigger and bigger role in our energy mix.
All about scale
Ultimately, renewable energy, like most energy plays, is all about scale. Wind energy and sunshine come in fairly low concentrations – these are forms of energy that are not nearly as concentrated as coal, oil, or natural gas (though ultimately those energy sources came originally from the sun as well). Because of their low density, wind and solar require huge gathering apparatuses to collect and distribute.
Renewable energy is more of an infrastructure play than it is technology venture — primarily because of the very nature of the challenge at hand — capturing the energy from natural forces.
Today’s typical modern wind turbine sports blades a football field in diameter and annually produces the energy needs of 600 homes. Solar fields of equivalent output cover some 20 acres. Despite exciting evolutionary technological improvements, there is no Moore’s Law in renewable energy, i.e. computer power doubles every 18 months. There is, however, an “experience curve." Bloomberg New Energy Finance estimates that “manufacture of onshore wind turbines displays a 7 percent “experience-curve” – that is a 7 percent cost reduction for every doubling of installed capacity – as economies of scale and supply chain efficiencies reduce costs.”
There is only so much energy available from the sun and the wind, so you cannot miniaturize and get more of it like you might with smaller and smaller computer components. Indeed, the bigger the apparatus, the more energy you scoop up. While technology improvements are coming down the pike, both wind and solar technologies are fairly efficient at turning raw natural energy into electricity.
Big business for Houston
Nationally, we get less than 3 percent of our electricity from wind energy, and less than 0.1 percent from solar. But renewable energy is making tremendous headway. If the rest of the country continues to follow Texas’s lead, we will see hundreds of billions of dollars invested in new wind and solar facilities over the next two decades. This trend means big business for Houston, not because we are particularly green, but because we are really good at large infrastructure projects.
When the world needs pipelines, massive oil rigs, LNG facilities, and any sort of major infrastructure project, Houston comes calling.
When the world needs pipelines, massive oil rigs, LNG facilities, and any sort of major infrastructure project, Houston comes calling. Our city has legions of engineering, project development, legal and financial specialists ready and able to tackle the biggest energy projects around. Houston is home to large construction companies like Fluor that are accustomed to tackling huge projects.
Solar and wind industry are still in their infancies. Like hydropower in the past, and nuclear power to this day, renewable energy requires some measure of public policy support. Most Americans recognize this as a good idea, for they believe that the benefits in terms of stable pricing and pollution-free energy are more than worth the public policy price.
And as the renewable energy industry continues to grow in importance, Houston’s natural advantages position us well for this new wave of energy expansion.