Amazon Comes To Texas For Electricity

Texas Wind EnergyAmazon.com has become the latest big company to turn to Texas serve their green energy needs.  They recently announced they will be building a huge wind farm in the state – their largest renewable energy project to date.  The 253 megawatt wind farm will be located in the West Texas county of Scurry.  Amazon has committed to buying 90% of the facilities output of electricity.  It will be capable of producing up to 1 million megawatt hours of electricity per year when it goes on line late next year.

Amazon’s Web Service cloud data centers (AWS) are large consumers of electricity.  Amazon has committed to a goal of 100% renewable energy.  The new wind farm in Texas will bring the company’s renewable energy portfolio up to 2.6 million MWh annually.  Amazon estimates that 40% of its AWS infrastructure will be powered by renewable energy by the end of the year.

Amazon is far from the only large company to go big on Texas electricity. Johnson & Johnson recently agreed to purchase half of the output of a 200 megawatt wind project being developed by EON SE in the Texas panhandle.  In 2013 Microsoft signed a 20 year deal to purchase all of the output of a 110 megawatt wind farm near Fort Worth developed by RES America.  Texas is also home to the largest federally owned wind farm which was built in 2014 to power the Pantex nuclear weapons facility.

Texas has paved the way for these large projects by investing billions of dollars in infrastructure to support what is by far the country’s largest installed wind capacity.   Texas has an independent electric grid and is the largest deregulated electricity market in the country.


Largest Federal Wind Farm To Be Built In Texas

Pantex wind farm to provide electricityAlready a leader in wind energy, Texas will soon be home to the largest federally owned wind project.  In May, the National Nuclear Security Administration (NNSA) awarded a contract to Siemens Government Technologies to construct and maintain an 11.5 megawatt wind farm in the Texas panhandle to provide electricity to the Pantex nuclear weapons facility.   The project is expected to break ground this summer and be operational by next year.

The project will consist of five 2.3 megawatt turbines which will add to the state’s already substantial portfolio of wind energy.  Texas produces three times more wind energy annually than the next state.  Most of the state’s wind turbines are located in West Texas where abundant land and wind create ideal conditions for wind energy.

The Pantex facility near Amarillo, Texas is the nation’s only facility for the assembly and disassembly of nuclear weapons.  It has been in continuous operation since 1951.  Its primary function today is carrying out the NNSA’s mission of nuclear nonproliferation and management and security of the nation’s nuclear stockpile.  The wind power produced by the project is expected to provide Pantex with about two-thirds of its electricity requirement.   It’s unlikely that wind energy could ever provide 100% of the power for such a facility because of the intermittent nature of wind power.

The project is to be financed using an Energy Savings Performance Contract.  Using such an agreement, Siemens will provide the upfront costs to build the wind farm while the government pays the company over time using the electricity cost savings the project is expected to deliver. The window farm is expected to result in a savings of around $2.9 million annually over the next 20 years.

Energy savings performance contracts (ESPCs) are designed to allow federal agencies to take advantage of programs to reduce energy costs while paying for the project cost from the actually energy cost savings realized by the project.  The company who is awarded a contract under such an agreement guarantees that the improvements implemented will result in the projected cost savings.

ESPCs are seen as an important tool for allowing federal agencies to participate in energy saving programs and meet the goals outlined by President Obama to meet federal clean energy and energy efficiency goals.   The federal government is the largest consumer of energy in the US.

See Also: The U.S. Military’s Green Mission
See Also: Has The Wind Energy Industry Peaked?