Case Study: “Three Friends” and the Texas Wind Industry

Brief Analyses | Energy and Natural Resources

No. 830
Wednesday, July 20, 2016
by John McDonald

In recent years, Texas has become the nation’s leader in wind energy. In 2014, wind farms in the Lone Star State had the capacity to produce more than 12,000 megawatts of electricity, enough to power 3.3 million homes. But given the unpredictable nature of wind, they produce, on average, only 33.9 percent of their maximum capacity.

However, some wind advocates think the nation-wide demand for electric power can be met by transporting electricity produced from renewable sources in remote areas to far-away population centers. Given the results of a recent attempt to connect the three U.S. electrical grids, the demand for renewable energy may be less than they think.

Connecting Electrical Grids. Tres Amigas LLC., literally, “three friends,” was founded by a few former energy executives in 2009. Their business plan was to build a transmission station to connect the United States’ three electric grids — the Eastern, Western and Texas grids — to transport renewable energy across the continent. Tres Amigas’ idea is not unreasonable, given that electricity prices vary greatly. For instance, in 2014, electricity prices in Connecticut were 186 percent higher than in New Mexico.

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