Strong spring wind production in West Texas has been trapped as major transmission lines undergo seasonal maintenance. The lack of sufficient transmission capacity to move wind power from sparsely populated West Texas to densely populated North Texas has led to low on-peak prices and some negative off-peak prices in trading in the ERCOT West zone and for "seller's choice" power.
"Small companies may get spooked" by the low prices, said Declan Flanagan, chief executive of E.ON Climate & Renewables North America which hopes to double its U.S. wind generation to 1,150 megawatts by early next year.
As market participants and regulators develop large, new transmission lines to take advantage of the state's wind resource, the market for wind will stabilize, Flanagan told the Gulf Coast Power Association conference in Houston.
"Long-term, ERCOT is a growing market, driven by natural gas" that will continue to attract thousands of megawatts of new wind generation," he said.