Texas already has the highest penetration of wind in the nation, and now the state has embarked on a significant expansion of its electric transmission network in west Texas to support new wind farms. How cost-effective is this expansion for reducing emissions, compared to other alternatives? My research concludes that expanding west Texas wind is expensive for reducing greenhouse emissions.
My research, recently presented at the Rice University Department of Economics, offers a glimpse of a possible Electric Reliability Council of Texas (ERCOT) future. I make a very rough estimate of the all-in cost of using west Texas wind to displace fossil-fueled generation. I then go on to estimate the implicit cost of using wind to reduce greenhouse emissions.
My conclusion: Using wind costs about $50 to reduce one ton of carbon dioxide, while displacing coal by natural gas can cost significantly less (in some cases, zero) per ton.