Common Tragedies

Thoughts on Environmental Economics

Wind power in Texas: the TXU effect

Posted by Daniel Hall on September 22, 2007

T. Boone Pickens is planning a 4 GW wind farm in Texas that would be the largest in the U.S.:

Mesa Power, controlled by Pickens, the Dallas hedge fund manager who made his fortune in the oil industry, is planning a 4,000-megawatt wind farm in the Texas Panhandle. Mike Boswell, vice president at Mesa, said the project may begin delivering power in 2011.

This is actually a knock-on effect from the private equity buyout of TXU earlier this year:

The need for more power in Texas is greater than ever after KKR and TPG agreed to cancel eight of 11 planned coal-fueled generators as part of their $45 billion takeover of TXU. The pledge was needed to win support for the deal from environmentalists and government officials who were concerned about increasing pollution.

The main state grid operator said in June that the reserve margin, a measure of surplus capacity, may drop below 12.5 percent, the minimum needed to maintain stable supplies, as early as 2009. The estimate for 2012 is 5.9 percent.

H/T: James Wimberly at The Reality-Based Community.

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