Geothermal energy 

 

Geothermal energy

Next to hydropower and biomass, geothermal energy is the largest renewable energy resource in the U.S.  Harvesting geothermal energy distinguishes between energy gained from two or three km deep under the ground and from energy gained from approximately 100 m under the ground. The deeper the exploration the higher the temperature required. The United States have the most geothermal power of the world. Texas has the potential to contribute 10% to the United States’ geothermal energy potential. Currently, geothermal energy production in Texas is less than 1%.

Potential for geothermal energy in deeper earth finds itself in various ways. There is space for hydrothermal resources, as indicated by the orange areas in the adjacent figure. These are found in fractured and porous rocks in form of hot water or steam. Geo-pressured resources are represented by the green spots on the map below. They consist of hot brine with methane and are found in deep aquifers where water is trapped under high pressure due to burial processes. Also, the heated geological formation of hot dry rock is present in the East of Texas, providing possibilities for heating and electricity. In addition to that, the areas designated by the lines in the map show large geothermal potential, for the existence of oil and gas wells proved to hold temperatures above 212 degree Fahrenheit (100 degree Celsius) in these regions, some above 300 degree Fahrenheit (150 degree Celsius).

Since Texas has the experience of locating oil and gas resources and thus the skills for subsurface analyses of heat-resources, reservoirs and deep-water availability, they have an advantage in locating and drilling for geothermal resources as well. Costs of drilling wells have reduced, which is attributed to the improvements in drilling technology and horizontal drilling, which also allows for more efficient drilling in different directions. Next to that, hydraulic fracturing increased the permeability of the shale formations. Technology advancements in binary cycle heat exchange systems allow for efficient economic power creation with lower boiling points.

One big potential for geothermal energy production in Texas lies in the co-production with oil and gas wells, which produce hot fluids as a waste product representing a cost reduction for oil and gas producers in disposing of this co-product.

The Geothermal Laboratory of the Southern Methodist University and the University of Texas at Austin are research institutes assessing this potential. To obtain more knowledge about available resources, the National Geothermal Data System was developed, a website providing data for all states about criteria for geothermal development. The company Thermal Energy Partners, located in Austin, plans and implements geothermal power plant projects on a worldwide scale and are open to partner up with international research institutes and companies.

Another application of geothermal energy is geothermal heat pumps or heat exchange systems which employ geothermal energy from shallower grounds with temperatures of 10-30 Celsius. These technologies make use of a loop system in 60-80m deep ground where temperatures remain constant. Warmer water underground is pumped to heat houses and buildings during winter time under higher compression of the pump. During summer time underground temperatures are colder than the air above. Therefore, the fluid from underground is now transported to the pump and circulated to supply the building with cooler air. There is economic efficiency involved, as one unit of electricity is needed by the heat pump to generate four to five units of heat. A gas furnace can only produce one unit of heat for one unit of electricity. The U.S Department of Energy emphasizes that every state in the U.S. has the potential to deploy geothermal heat pumps as the ground has the same shallow ground temperature. In 2015 there has been an initiative by Whisper Valley in Texas to help the City of Austin reach its CO2 reduction goals by introducing 7500 net-zero solar and geothermal power equipped homes. The technology for this makes use of a heat pump geo-exchange system. In addition to this initiative ensured by international companies, there are several other private businesses from San Antonio until Dallas. Originally providing air-conditioning, they also discovered the potential of environmental friendly geothermal heating for houses and buildings.

There is clearly an established market for geothermal heat exchange systems. The great potential for deeper geothermal energy exploration has still to be taken up. With studies showing that geothermal energy from oil and gas wells could only cost $0.10 per kWh and the increasing demand for efficient energy, geothermal energy could just fulfill what we are looking for.

Posted by Saskia Pardaans May 12, 2017

OTC 2017 

OTC 2017

From May 1- May 4, the yearly Offshore Technology Conference (OTC) was hosted at the NRG stadium in Houston. Despite the current price of oil at $40[/bbl], a lot of Offshore Technology Companies were still present at this event. Organized by the IRO (The association of Dutch suppliers in the oil and gas industry and offshore renewable industry), the Dutch presence was remarkable again this year with 46 Dutch companies, an estimated amount of 500 Dutch visitors and a very noticeable orange Holland Pavilion, spread out over 1000 m2 in the NRG Stadium. The overall conclusion of the exhibitors at the OTC is that the conference is better visited this year in comparison to last year. The OTC is seen as an event where you have to be present as an Offshore company, since high-level representatives of the companies will be present on the exhibition as well. However, the first analyses show that the event is that the attendance of the OTC fell again this year. Just under 65,000 people wandered the exhibits at Houston's NRG Park, down from 68,000 last year and 95,000 in 2015. Attendance has plunged nearly 40 percent since hitting a record 108,000 in 2014, the peak of the last oil boom.

 

Although the general opinion is less pessimistic than last year ‘it is getting better’, most companies are moderately optimistic at best about a possible surplus in 2017. For a lot of companies, cost reducing measurements are still necessary in 2017, including downsizing of the workforce. Talking to the representatives of the different companies, a few trends can be analyzed:

 

·         The exploration and completing of new oil and gas wells is on hold. For companies with a complete dependency on those activities, these are difficult times. There’s lot of overcapacity at this moment. 

·         Because of the low price of oil, there’s a huge pressure to keep the cost price as low as possible. All the activities need to be completed at minimal costs. Companies with cost-cutting, innovative ideas are the most likely to be hired for the job. Dutch companies are well equipped for those cost-cutting ideas.

·         A lot of Dutch companies are actively involved in the installation of Offshore Wind farms. This market is relatively new and is developing at a fast pace, especially in the North Sea. The Offshore Wind farm market in North-East America is expected to be an import export market for the Netherlands.

·         Another trend is the decommissioning of oil platforms. After the useful life of an oil and gas platform, it must be decommissioned (i.e., dismantled and disposed of). A lot of the Dutch exhibitions at the OTC are equipped for the decommissioning of the platforms, which creates a growing number of projects for now and in the future. Two examples of this decommission market are Heerema and Allseas who both recently scored a big project in this market.

Posted by Saskia Pardaans May 12, 2017

King's Day 2017 was a huge succes! 

King's Day in Houston: 200 guests, 500 bitterballen, 100 kroketten, 450 sate's, 300 stroopwafels and lots of orange. It was a huge success. A new tradition has arisen

Thank you all for joining us in celebrating King’s Day on April 27th. We hope you had a fantastic evening. For those who were not able to join us, we hope to see you next year! For sure, a new tradition has arisen.

Special thanks to our valued sponsors: Jackson Walker, PKF Texas,  Mammoet, KLM Royal Dutch Airlines, Central Market, De Stroopclub and Heerema Marine Contractors. Thanks for making King’s Day 2017 possible!

The photo's and quotes from our guests give a good impression of the evening. We would like to share these with you.

“The King’s Day party was a great event. Congratulations to the NBSO and NACCTX on organizing a fun evening.  My partners and I enjoyed the opportunity to meet new and existing acquaintances and further expand US – Dutch business connections while celebrating a great Dutch holiday”  

 James Prappas, JW  

"Oranje boven”. Again a real cozy event of the Dutch contingent in Houston. Go on with it!

Henk Jelsma, Radial Drilling Services

“It was wonderful to see so many new and familiar faces at the King’s Day celebration, which enjoyed a record attendance. A fun evening that gave us all a taste of home. Looking forward to this event being the first of many to come and look to the Chamber to partner with you again next year. Congratulations on a job well done!”     

Nadia Sant, NACCTX                                                                                   

“The party was a huge success. It was very nice to see so many Dutch people dressed up in orange in Houston!”    

Tjitske van Schelven, Mammoet                                       

"What a great event to celebrate our Kings birthday! Organization was perfect and it was fun to have a bit of Holland, right in the heart of Houston! Good food, drinks and company with a splash of orange equals a perfect night"

Jeannine Verweij, Scandia Gear  

“Great atmosphere and ambiance. Nice to make a toast to our King with so many familiar and new faces”             

 Albertien Greijdanus, TMC innovation institute 

“King’s Day in Houston made all the guests feel back home in the Netherlands for a little while with all the stroopwafels, bitterballen, Dutch music and gezelligheid (the Dutch word that cannot be translated)”

Simone van de Garde, MDAnderson Cancer Center                                                                                                                                  

We hope to see you all next year!

 

Sincerely,

 

NBSO-Texas and NACCTX

 

Posted by Saskia Pardaans May 05, 2017

Jan Peelen 

Jan Peelen is Attaché for Infrastructure & Environment at the Royal Netherlands Embassy (Washington, D.C), where he is responsible for infrastructure, smart cities, climate resilience and sustainable economic growth.

Jan has been in the U.S. since 2014 and had developed a special interest in Texas over the years. ‘ A lot of people only think of  oil & gas, when they talk about Texas, but there is much more interesting stuff going on: they are really making progress on sustainable energy and the city of Austin is considered one of the leading ‘smart cities’ in the US’, says Jan. The rapid growth of Texan cities and projects like the Ike-dike or the Central Texas Railway are also being followed with great interest.

Before his posting in the US, Jan worked as the program officer for the Dutch International Water Policy Program: he coordinated the overall program and was responsible for various initiatives to promote the Dutch water & maritime industry.

Jan started his career with the Dutch national government as a specialist on environmental impact assessments. He later became a strategic advisor and project manager for various national energy & transportation infrastructure projects in The Netherlands and was involved in the development of new policies and regulations for these type of projects.

Jan holds an M.S. in Urban & Regional Planning from the University of Amsterdam and serves on the Advisory Board of the ‘Emerging Leaders in Environmental & Energy Policy’ (ELEEP) network.

 

Posted by Mariella Priem April 07, 2017

Fort Hood 

Fort Hood

Fort Hood is a U.S. army base, located in Killeen, Texas. The post is named after Confederate General John Bell Hood. It is located halfway between Austin and Waco, about 60 miles (100 km) from each, within the U.S. state of Texas. Fort Hood is an installation of the United States Army and is the largest military base in the world (by area). Its origin was the need for wide-open space to test and train with World War II tank destroyers. Fort Hood is the most populous U.S. military installation in the world. The main business area is in Bell County, with the training countryside area of the post in Coryell County. In April 2014, the Fort Hood website lists 45,414 assigned soldiers and 8,900 civilian employees with Fort Hood covering 214,000 acres (87,000 ha). Currently, Fort Hood has nearly 65,000 soldiers and family members and serves as a home for the following units: Headquarters III Corps; First Army Division West; the 1st Cavalry Division; 13th Sustainment Command (formerly 13th Corps Support Command); 89th Military Police Brigade; 504th Battlefield Surveillance Brigade; 85th Civil Affairs Brigade; 1st Medical Brigade; and the 69th Air Defense Artillery Brigade.

Lt. Col. Peter Grijspaardt, is also based in Fort Hood as commander of the 302nd SQN, more precisely on the Robert Gray Army Airfield. The 302nd SQN consists of 230 employees, 27 of them are Dutch, stationed in Fort Hood for three years. The Dutch SQN is part of the 120st US brigade. The Dutch soldiers are stationed in Fort Hood for real-life training purposes. The Dutch have been present in Fort Hood for more than 20 years now. It all started with Apache training and exams in Fort Hood with the 301st SQN. The facilities were very well appreciated and convenient for training purposes, so the Dutch detachment made their military sales case towards the US government to continue and expand their presence in Fort Hood. Nowadays the 302st SQN organizes trainings four times per year for military aviators (apache, chinook, Amercian Falcon) from the Netherlands. Next to these trainings there is a mission training of 2 times 9 weeks for Dutch soldies as well to practice their own drills and shooting practices.

We asked Lt. Col. Peter Grijspaardt why they choose Fort Hood as their base. The main reason is the vastness and space of the training areas. The training areas are almost the size of the Netherlands in total. The Netherlands as a small, densely populated area with a lot of rules, regulations and restrictions is not a good place to do the training. Because of the space, there are endless opportunities for the aviation training, there are low and high fly zones and land to practice shooting. Fort Hood made deals with the ranchers to use their land for training. Also, the positivism of the Texans and the appreciation for the military are reason for the Dutch detachment to renew the contracts with the US government to be located in Fort Hood for five more years. The Dutch military are based on more locations in the U.S. than just Fort Hood. There is a Dutch military presence in El Paso, TX, Tucson, AZ, Fort Rucker in Alabama and in California. There are advantages of training with the U.S. forces. The U.S. military has developed a lot of expertise on airstrikes. Collaborating and exchanging tactics is very fruitful. The Dutch have conducted operations with U.S. forces in Iraq and Afghanistan in the past and now are conducting operations in Iraq and Syria together. Working with U.S. troops in garrison helps the Dutch familiarize with the different regional accents that American Soldiers have, which is important when they are conducting joint missions in theater. Training at Fort Hood fosters the relationship between Dutch and U.S. troops and builds trust that carries into missions down range and has already been proven to help with interoperability.

In February 2017, The Hon. Henne Schuwer, Netherlands Ambassador to the U.S., visited Fort Hood and met with Dutch troops and leaders, and observed training conducted by the Royal Netherlands Army and Air Force.

Posted by Mariella Priem April 07, 2017

Renewable energy in Texas: Solar 

 

Solar energy may not be as prominent as wind energy in Texas, having an installed capacity of 589 MW which puts Texas on tenth rank nationally. This can power 63000 homes. Nevertheless, growth of solar capacity was 65% in 2015 with a 48% increase of investment over that year. Installed solar PV system prices dropped 12% from 2015 and 66% from 2010. In its Long Term System Assessment Update for 2016, ERCOT expects solar energy to grow from approximately 2% in 2017 to 17% in 2031. (ERCOT is the Electricity Reliability Council of Texas responsible for generation, transmission and frequency regulation in the electricity market of Texas).

Although Texas clearly does not lack the geographical and natural factors which contribute to potential for solar energy, it is not performing as well as California, North Carolina, Arizona or New Jersey concerning installed solar capacity. However, it is an upcoming state in growing solar capacity.  Currently ranking eighth on cumulated installed solar capacity nationally, Texas moved to the third rank for the third quarter of 2016. Texas is thus just in the beginning phase of adapting solar, but the market is taking up the potential quickly, even though policies to promote it are less ‘aggressive’.

Basically, there are two main ways to gain energy from solar radiation. The first one is the direct conversion of solar radiation into energy by photovoltaics (PV) , which therefore only operate when the sun is shining. The other one, solar thermal energy uses mirrors to concentrate sunlight. The thereby obtained thermal energy generates steam to operate a conventional turbine that produces electricity. The latter method is implemented on the large scale in remote areas. Most large-scale solar utilities can be found in West Texas, which has 75% more radiation than in East Texas. This is confirmed by the adjacent figure. In West Texas this radiation is strongest with 6 to 6.8 kW per square meter per day. Moreover, the abundance of cheap private land sets good conditions for developing large scaled solar thermal projects. In general, Texas had 20% of U.S.’s annual technical potential for concentrating solar power in 2012. Further, the U.S. Renewable Energy Technical Potential report from the National Renewable Energy Laboratory (NREL) states that Texas holds the largest national potential in urban and rural utility scale PV.

 

Texas’ largest solar farm is owned by CPS Energy in San Antonio. With its 95MW, the Alamo Solar Farm is part of a 400MW project. Contracts between international companies and CPS Energy are part of their New Energy Economy initiative, started in 2011 in which they agree to buy the renewable energy products of the company in order for them to settle in San Antonio and add to the economic development of the area. Apart from San Antonio, Austin Energy has attractive capital incentives for commercial and residential solar investors. Their “Value of Solar” program allows customers to sell generated energy back to the grid and therefore promotes Distributed Energy Resources and energy efficiency. Austin Energy is also open for partnerships on an international level to promote sustainability.

Furthermore, Oncor, a T&D service provider in Dallas used a portion of its investments in energy efficiency for solar incentives when they were bought out by another company in 2008. When the investor’s money was spent up they found it still to be a cost-efficient measure and kept on to these incentives in their standard offer program.

MP2 Energy, Austin Energy, El Paso Electric CPS Energy and Pedernales Electric Cooperative are examples of utilities applying community solar, an alternative to share the output produced by a solar farm with a community, consisting of residents who might not be able to apply solar on their roof.

The attractiveness of solar energy both on residential-, commercial-, and utility scale can be contributed to the dramatic cost incline of solar panels, something the Chinese solar market influences greatly. Just between the two halves of the year 2016, there has been a decline in costs per Watt direct current of residential solar by 8.6%. For commercial solar, this cost decline is 12.5%. Utility fix-tilt and utility single-axis trackers equipment experienced a cost reduction of 17.4% and 15.1% respectively.

With these cost reductions, subsidies like the Investment Tax Credit, a 100% solar property tax exemption and the extensive geographical and geological potential, a sharp uptake of solar energy for distributors, product manufacturers, designers and developers in Texas has only just begun.

Posted by Mariella Priem April 07, 2017

Trade mission Logistics and Plastic Resins 

Trade mission Logistics & Plastic Resins

On March 20 and 21 2017, the NBSO welcomed a delegation from the Netherlands. The delegation was formed by representatives from different logistic service providers looking for business opportunities in the expected plastic resin boom in Houston in the near future. Also part of the delegation was our colleague from the Netherlands, the general secretary of the Holland Logistics Network. The mission was focused on logistics and more specifically on the total chain of logistics of plastic resins. A plastic resin is the raw material from which i.e. plastics are made off. Because of all the new construction in the Bay Area Houston -almost $50 billion worth of new projects- Houston is the place to be for service providers in this industry.

The goal of this mission is to give Dutch companies access to market opportunities in the logistics around plastic resins in Houston, Texas. These opportunities arise from the current and future need for companies that have the knowledge and experience in packaging, chemical warehousing and the 3rd party logistics of these plastic resins. By organizing five site visits, a trade dinner and a network event, the NBSO introduced the Dutch delegation to the Houston market.

Day 1

We started the mission with a joint breakfast in Clear Lake, so the participants had the opportunity to introduce themselves and to pitch their expectations of this trip. Our first site visit was hosted at NASA Johnson Space Center Houston by The Bay Area Houston Economic Partnership (BAHEP). The BAHEP engages approximately 270 investor companies, business professionals, local governments, and educational institutions to bring about prosperity and a high quality of life in south east Texas. Dan Seal, the Executive Director Special Initiatives at BAHEP gave us a comprehensive insight in the economy and business opportunities in the Greater Houston Area. After this presentation we had the opportunity to visit the famous Space Center and to picture ourselves in outer space. The afternoon was marked by our second site visit to Kaneka North America LLC in Pasadena, TX. Kanaka is a Japanese worldwide $5 billion producer of chemical products including plastic resins, pharmaceutical intermediaries, food supplements, synthetic fibers and fine chemicals. During this visit we had the opportunity to see the production process of the chemical products.

We concluded the first day with a trade dinner on a very special location; the historical Clipper ‘De Stad Amsterdam’ that was docked in Galveston during the week off the trade mission. The clipper has sailed all the way from Amsterdam around the America’s and was the perfect home base of this trade mission. During the trade dinner the Dutch delegation was matched with possible business partners and other valuable connections while enjoying a delicious dinner and a magnificent sunset aboard The Clipper.

Take a look at the photo's of day 1!

Day 2

After spending the night on the Clipper, the second day started with a site visit to Plastic Express in Pasadena, TX. Plastic Express is specialized in warehousing, transporting and trans loading of o.a. plastic resins for big procedures. The warehouse in Pasadena is brand new and especially build for the big plastic resin boom that is expected in the next few years. We are very grateful to Kent Thompson, the Asst. Vice President of the Gulf Coast Operations at Plastic Resins, for his time and information by touring us around the warehouse. It was especially interesting to see this part of the logistical chain, after our visit to a producing company the day before.

The next stop was the Port of Houston, where Will Whitehouse, Sr. Trade Development Manager and Jordan Frisby,Economic Analyst at the Port of Houston Authority welcomed us with lunch and a beautiful view on Downtown Houston from the Port of Houston. Both gentlemen informed us about the Port of Houston and the connections with foreign trade. The Port of Houston is the nation’s largest port for foreign waterborne tonnage and an essential economic engine for the Houston region, the state of Texas, and the nation.  It supports the creation of nearly 1.175 million jobs in Texas and 2.7 million jobs nationwide, and economic activity totaling almost $265 billion in Texas – 16 percent of Texas’ total gross domestic product – and more than $617 billion in economic impact across the nation. The Netherlands is the fifth leading trading partner on the combined import and export by tonnage and dollar value. The Port of Houston is thus an import hub for logistics from the Netherlands.

On our fifth and last site visit on this trade mission we visited the Manchester Terminals, to get a grasp of the actual handling of freight at the Port of Houston. Manchester Terminals is a 72.5 Acre facility located on the corner of The Houston Ship Channel and Sims Bayou. Manchester Terminal is a private marine terminal that is a United States Coast Guard approved break bulk cargo facility. They offer a unique combination of services that include warehousing, railroad access and Foreign Trade Zone (FTZ). We visited the Manchester Terminals on invitation of one of its partners: BBC Chartering, a world leader in ocean carriage of heavy lift and project cargoes. BBC Chartering support leading clients with their fleet of currently 170 multi-purpose and heavy lift vessels. This fifth site visit added to a good overview of the total supply chain of the making, warehousing and handling of freight like plastic resins in Houston.

We concluded our trade mission with a network event on the Clipper ‘De Stad Amsterdam’, in joint organization with the Netherlands American Chamber of Commerce -Texas Chapter. The event was very well attended by familiar and new faces. Very successful connections for the future are made.

Take a look at the photo's of day 2!

We are looking back on two very successful days and are looking forward to see the successful connections in action!

 

Posted by Saskia Pardaans March 27, 2017 Categories: Handelsmissie

Dallas-Fort Worth 

North Texas is like a piece of fine art on a 9,000 square mile canvas.  It’s a collage of more than 150 cities and towns and 12 counties; each with their own unique shape, texture and color. The Dallas-Fort Worth Metropolitan region is sculpted by 4 percent employment growth; 3.5 million skilled employees; a diversified corporate portfolio strengthened by the services and manufacturing sectors; 16 major colleges and universities for blended learners; 13 professional sports teams; and 7.1 million optimistic residents.

Indeed, a vibrant picture exists before us, and under the new administration in Washington, it is predicted the growth will only intensify.  North Texas has some of the best and brightest municipal leaders in the country who share common goals to increase economic growth, strengthen the local talent pipeline, and create the best quality of life to attract families and workers from all over the world.  Our cities paint with the same brush made from pro-growth public policies designed for economic prosperity.

The region is not without its challenges.  Continued efforts are being made to manage growth with upgraded infrastructure (read traffic) projects, affordable housing and improved urban education opportunities.  One of the single most important infrastructure projects in the country is the high speed rail project that will connect DFW to Houston by 2022.  This rail project is on President Trump’s list of critical infrastructure projects to complete.

In the next five years, more than 30,000 jobs alone will be filled at the intersection of the Dallas North Tollway and State Highway 121 (Plano/Frisco).  Toyota, JPMorgan Chase, Liberty Mutual, the Dallas Cowboys, FedEx, Hilti, Kubota and State Farm are just a few of the companies with recent designs on North Texas.  It’s a great time to bring business of all sizes and sectors to North Texas.  In fact, the picture has never been more clear.

For an overview on the demographics:

 

 

Posted by Mariella Priem March 08, 2017

Renewable energy in Texas: Wind 

If Texas were a country, it would rank 6th place globally for installed wind energy capacity and it does also rank first place for wind-energy related manufacturing. With 16.9 GW of installed wind capacity in 2016, Texas leads the nation. In 2012, the National Renewable Energy Laboratory concluded that Texas’s annual technical wind potential accounts for 17% of the entire nation.

Wind turbines convert the wind’s kinetical energy into mechanical power. The generator in the wind turbine converts this power into electricity. The adjacent picture shows high wind speeds above 7 meter per second in North and West Texas. Areas with 6.5 meters per second are considered a resource for wind development. Currently, 74% of the wind resources are located in West Texas. Capacity and availability factors are also relatively high. At windy days, an astonishing 49% of load can be served by wind.

Wind was embedded very early in Texas’ Renewable Portfolio Standard which prescribes renewable energy inclusion in energy producers’ portfolios. Long term contracting in Purchase Power Agreements (PPAs) and extended subsidies ensure that growth of renewables such as wind energy continues. The Investment Tax Credit (ITC) and Production Tax Credit (PTC) were very important subsidies for this development and extended to 2019. ERCOT, the Electricity Reliability Council of Texas, is the responsible party for energy generation, transmission and frequency regulation on the independent energy market of Texas. Already many project developers have signed Interconnection Agreements with ERCOT, so entering the market requires fast action. There is a 78% increase in new wind projects expected by 2019. Further, large corporates like Amazon, Google, Unilever, Adidas or Lockheed Martin are engaging in PPAs to fulfill their sustainability goals and reduce their carbon footprint. With the abundance of private land in West Texas, it is quite attractive to invest in wind power. Landowners leasing the land to wind developers gain. Cheap land limits offshore wind productions, although there is potential on shore, at the Gulf Coast. There are no fuel costs or variable costs in general for wind power and compared to conventional power plants, capital costs are lower, too. With the newly constructed transmission lines in Texas, there is less congestion to transfer power from remote locations to cities.  

Since wind does not always blow, intermittent wind energy supply represents a problem. But also here, there is market potential in ERCOT’s ancillary service market, a market to back up energy supply and ensure reliability. These resources are found in developing innovative energy storage systems, such as compressed air energy storage. The company Apex CAES is currently developing such a storage system and is looking for investors. Investors can also be wind developers seeking to secure their energy.

Moreover, Texas ranks first place nationally in wind industry employment, covering jobs along the entire supply chain. Texas itself is a leader in steel fabrication and transportation for wind energy. Advanced materials such as carbon fiber are exported from Texas to the world market. Business opportunities are also found in the market for financial hedging and banks. Research entities such as the West Texas A&M University Alternative Energy Institute, the National Institute for Renewable Energy or the Texas Tech’s National Wind Institute allow for knowledge expansion. To sum up, in the coming years, wind is still expected to dominate the renewable energy market in Texas.

Posted by Mariella Priem March 08, 2017

About the State of Energy  

renewable energy texas

It was during the State of Energy, an annual event hosted by the Greater Houston Partnership, where the dependence on the energy industry was made clear. Whether it is the transport, the food, the manufacturing or the pharmaceutical industry; representatives from various companies and organizations seek to find some certainty on what is about to come in the future, since they are all influenced by the recent downturn in the oil and gas sector. Frankly, the energy sector influences the entire U.S economy.  

As the energy capital of the world, Houston seems the right place to host such an event. It is 75miles to the east of Houston at Spindletop, where drillers discovered oil in 1901 which led to the oil boom in Texas. Fortune 500 companies such as Conoco Phillips, Phillips 66, Marathon Oil Corp., Exxon Mobil Corp and Shell Oil Co. contribute as energy companies to the largest cluster in Houston, employing 14 percent of the workforce. The picture looks a bit different when regarding the whole of Texas, where the energy industry accounts for approximately 2 percent of the employment and 9 percent of gross domestic product due to diversification in other sectors of the economy, too. Texas is performing relatively well when comparing to the other States. Reasons are a stronger job growth because of a younger population with relatively strong net immigration. Thus, the Texas Business –Cycle Index, the broadest indicator of the state’s business cycle showed no recession in 2015, indicating weak but positive expansion in employment.

Nevertheless, energy is one of economy’s main drivers in Texas and in the U.S. Texas has a strong oil and gas sector, which is only expected to increase in the coming years. Many coal units retired due to environmental regulations such as the Regional Haze Rule but mainly because of lower oil and gas prices. Wind energy takes up 11 percent of Texas’ energy production and solar has been growing greatly due to declining capital costs. 

For many, the downturn in oil and gas prices came as an ‘overnight shock’. In late 2014, oil prices were still around $100 per barrel, in the fall of 2015 this was around $45 per barrel. When prices dropped even lower with $29 per barrel in January 2016, companies had lost 70 percent of their revenue over six months. According to the Dallas Federal Reserve Bank, in 2015 Texas’ oil and gas related employment was weakened 19.4 percent, as well as the manufacturing sector declining 4.1 percent.

Following the example of the different sectors in the state’s economy, diversifying is something which also applies to energy companies trying to succeed in a low price environment these days. According to Ryan Lance, CEO of Conoco Phillips, a diverse portfolio and short cycle times are necessary. Long term planning is risky and difficult in times of greater uncertainty. Diversification can be implemented by including renewable energy in the portfolio as well, and is already experienced now.  Apart from that, Lance underlined that cheap and sustainable innovation and identification of hydrocarbons is an advantageous point in the energy industry of Texas. Oil, gas, renewables and other resources all play a role in meeting the challenge of growing demand. In his discussion with former White House Energy Advisor Jason Bordoff at the State of Energy, Lance emphasized that producing everything from what is discovered so far is important. This falls under the ‘all of the above’ option, where a mix of energy resources is favored.

This includes important implications for the future of renewable energy as well. Texas embraces the broad potential of wind and solar resources with a market driven and business friendly approach. It is clear and realistic that renewables will not account for 100% of total energy production: They are part of the solution. The Electric Reliability Council of Texas expects solar to grow with 17% by 2031 under current trends, while wind still remains a very strong renewable energy source. Investing in renewable energy is an option many business in Texas look into and something which will only increase in the next years. The state of the energy market in Texas can be viewed positively with the need of constant awareness of challenges, an open mind and diversification in supply and demand of energy resources.

Posted by Mariella Priem February 10, 2017
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