Leaders in
Environment & Energy
The case of TXU: Why a Texas Electric Utility is going
Green
by Sophia Barkat
Trend-setter in Wind Energy
"For more than 25 years, TXU has
devoted company time and money to renewable energy research and
development. Today, these investments are maturing and have made TXU
the largest purchaser of renewable energy
in Texas and the southwestern United States, as well as the fourth
largest
in the nation."
"Now we are helping to lead the way on renewable energy issues such as
availability, renewable energy credits and transmission capacity for
new
generation. For example, TXU delivers more than 75 percent of the wind
energy
that comes from Texas wind farms. Additionally, we use solar energy to
power
remote-monitoring stations."
(Notes:
1)
A spectacular though not improbable piece of news. The dry regions of
Southern USA, such as Texas, Arizona and New Mexico are perfect for
solar and wind power generation. That these States are not
overwhelmingly supplied by renewable energy sources is what is
surprising.
Nevertheless, that a large utility
provider based in Texas, the home of big Oil, is taking these measures
should come as good news. By delivering 75 percent of all wind power
consumed in Texas to a consumer base of over 2 million, TXU is
definitely setting some trends.
But is
the business Green?
According to CEO Erle Nye, wind power accounts
for an inspiring 14% of TXU's operation, though fossil-fuel and nuclear
power are the major revenue sources.
"TXU's portfolio includes 19,000
megawatts of generation with a fuel mix of coal/lignite, natural
gas/oil, nuclear
power and wind. The maps on the following pages illustrate the energy
portfolio." (Notes: 1)
According to it's online site, TXU has 6 Wind Turbines in Texas, 17
Oil/Gas production plants, 4 Coal, 1 Nuclear and 1 Landfill Gas
Generation plants. This totals to a consumption in Texas alone of
18,000 megawatts of electricity and 144 billion cubic feet of Natural
Gas each year, generated by TXU Energy and delivered by Oncor, the 3rd
largest Natural Gas supplier to Texas. TXU Energy also trades 354
terawatt hours of electricity and 14,247 billion
cubic feet of natural gas. It also has access to a large supply of
Natural
Gas in Victoria, Australia.
As such, TXU still emits gases
harmful to the Air, Water and Land.
"Since
1990, TXU has added more than 2,600 megawatts of generation with zero
air-emissions!
TXU was again among the nation’s leaders in the voluntary reduction of
greenhouse gas emissions by avoiding, eliminating or sequestering the
equivalent
of 23.3 million tons of carbon dioxide in 2001 - bringing our total
reduction
since 1991 to more than 193 million tons." (Notes: 1)
"TXU has
significantly decreased its rate of sulfur dioxide emissions by 38
percent and decreased its rate of nitrogen oxide emissions by 70
percent since 1997, and our emission rates remain below the national
average." (Notes: 1)
The
EPA and
Laws affecting TXU's operations
The US Environmental Protection
Agency reports that each year in the United States
industrial operations emit nearly 100 million tons of pollutants
into the air. As of January 1998, State and
Local
permitting authorities received nearly 14,000 applications
for operating permits-- representing more than 60 percent
of the estimated 22,000 sources subject to the program
nationwide. State and local permitting authorities have issued nearly
3,000 Title V operating permits and hundreds of draft permits.
Several thousand companies that would otherwise qualify as "major"
sources have agreed to comply with air pollution emissions limits to
maintain operations below levels that would trigger the operating
permit program requirements. Some
of these companies downsized and re-engineered their operations
to reduce their emissions levels. (Notes: 2)
Like most electric utilities in
the
US, TXU is bound by these rules set by the EPA, as well, as added
regulation
introduced by States and Local governments.
"At the
end of 2002, TXU held 467 separate permits. During the year, TXU filed
153 separate environmental permit applications and received 144 permit
approvals." (Notes: 1)
And in an effort to reduce
emissions of regulated gases and overall reduction of pollution under
the Clean
Air Act, TXU has introduced necessary measures in it's operations
as
well as reforestation of land in Texas.
"TXU has
significantly decreased its rate of sulfur dioxide emissions by 38
percent and decreased its rate of nitrogen oxide emissions by 70
percent since 1997, and our emission rates remain below the national
average." (Notes: 1)
"A leader in reforestation, TXU has
planted more than 20 million trees, including 1.3 million in 2002, on
reclaimed
mine lands in Texas, improving air quality, providing wildlife habitat
and
adding to the natural beauty of the landscape." (Notes: 1)
"We recycled more than 2.3 billion
pounds of materials in 2002, saving energy and resources and providing
money to
help people in need pay their energy bills." (Notes: 1)
Money
Matters
TXU has a direct business interest in increasing it’s eco-friendly
operations. First, there are social and regulatory pressures to use
more renewable energy resources than before and to reduce emission
levels more via the EPA's Acid Rain Program and the Clean
Air Act. Complying with EPA requirements to stay in
business come at no easy price. Permits cost money as does
reconstruction of power plants converting
fossil fuels into electric power. As such, trying to reducing emission
from
fossil fuel emission comes at a cost that may make doing business
unprofitable.
(Notes: 3) Using technology that can explot cleaner
renewable
energy resources, like wind and solar energy, are sometimes a more
cost-efficient
way of staying in business.
And then there's TXU Europe, TXU
Corp.'s sister corporation in Europe. TXU Europe has primarily been
buying up energy providers in Europe's newly deregulated utilities
market. It's new acquisition list includes major utilties in the Nordic
regions and in Central Europe. Scandinavia, which boasts very high
standards as far as the Environment goes -- re-forestation,
pollution-control and reenewable-energy use -- is the home of many
highly vocal environmental activisms groups, such as the Worldwatch
Institute, who can make doing business in Europe quite difficult for
companies without an eco-friendly record.
The EU Electric Utilities
Deregulation, which was promoted at the inception of the EU, and became
legal in 2003, is
likely to be an active market, what with electric utilities now being
able
to deliver service anywhere in the EU. Many businesses -- especially
old
nuclear power plants -- are expected to close in the process, while the
more
dynamic and often eco-friendly companies take over. With the EU market
wide
open, electric utility providers in the US with more than average
eco-performance standards are very likely to emerge at the top.
Hence, one might expect to see TXU
become more eco-friendly in Texas as well, and possibly
set more trends for US power companies to follow.
Note:
1. Quotes in italics are obtained from TXU’s site: http://www.txucorp.com/envcom/default.asp
2. US Environmental Agency links on Clean Air and Permits:
http://www.epa.gov/oar/oaqps/permitupdate/brochure.html#what.
3. Economic Analysis of a
Multi-Emission Strategy, prepared for Senator James Jeffords and Joseph
Lieberman http://www.epa.gov/air/jeffordslieberm.pdf
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