In West Texas, a renewable fuel booms, too: wind energy.

The state saw a flurry of wind farm projects beginning last year before a wind tax credit expired in December. In all, about 7,000 megawatts of generation capacity is projected to come online in Texas by the end of 2015 — more than in most states.

Most of those projects were in West Texas and the Panhandle, where the wind blows strong and often and a finished build-out of transmission lines meant easier access to the big-city markets.

If all of those projects are realized, it could increase the amount of wind capacity available to the state’s electric grid by 60 percent.

“A lot of it is that these new wind resources in the west and Panhandle are [world-class wind], and there’s an extremely high capacity factor,” said Michael Goggin, research director of the American Wind Energy Association in Washington D.C. “You are getting a lot of energy out of these wind energy projects over the year because the wind resource is so good.”

The AWEA recently released a 2013 market report that showed Texas accounted for the largest share of the nation’s wind energy in 2013 -- about a fifth. That report also found Texas' 11th congressional district, which includes Ector County, is home to 2,406 megawatts of wind generation capacity making it the sixth largest area in the country for the renewable energy.

But wind in Texas like the rest of the United States relies on a subsidy known as the production tax credit, or PTC, which offers 2.3 cents per kilowatt hour over a 10-year-period.

The actual generation cost of a new project is about $50 per megawatt hour, and the PTC covers about $23 per megawatt hour – almost half of a project’s cost, said Ian Partridge, a post-doctoral fellow at the University of Texas Energy Institute who studies and writes independently about the industry in Texas.

Partridge said that makes a wind project “certainly competitive” with coal or natural gas made cheap by the shale boom.

“It’s a story of subsidy rather than a story of something that’s intrinsically wonderful about wind technology,” Partridge said.

Because of uncertainty surrounding that tax credit, 2013 began slowly – the PTC was extended at the last minute on Jan. 2, 2013. Under IRS rules, companies could keep the credit if they began construction on a wind project before Dec. 31, such as by placing an order for wind turbines, and begin production in 2015.

But the supply-chain of new wind projects had already slowed, and as a result, the AWEA determined the amount of new projects announced in 2013 dropped 92 percent from the year before.

Instead the construction buildup, including the 7,000 megawatts in Texas, reflected pressure to qualify already planned projects, industry experts say. A lingering uncertainty around the credit for years lends to a boom-bust cycle for the wind industry.

“We are optimistic that we will get an extension of the renewable tax credit, maybe later this year,” Goggin said. “I think if that happens, there will be a continued growth in the Texas market, but the renewable tax credit is very critical for new wind development.”

But essentially no new projects will likely start construction during the first half of 2014, because the subsidy has ended, he said.

Besides subsidy, also critical for the wind-industry in West Texas is the $6.9 billion Competitive Renewable Energy Zones (CREZ) project that wrapped up in December after years of development.

The CREZ designated five areas in West Texas and the Panhandle and built roughly 3,600 miles of high-capacity lines that can deliver output from an estimated 18,500 megawatts of added wind capacity – far more than is generated right now. Takeaway was no longer an issue, and CREZ helped facilitate a wind industry in small communities that helped bring jobs and tax revenue, say officials in some of those areas such as Greg Wortham, the executive director of the Wind Energy Clearinghouse in Sweetwater, where he is also mayor.

But the CREZ also means the opportunity for more wind development and with that a possibility of a wind glut during periods of low demand and high wind such as the early morning, Partridge said.

“The overall average amount taken by Texas consumers will increase but the proportion of time that industry developers are required to turn off their product will actually increase too,” Partridge said. “From that point of view it’s an additional challenge to wind operators.”

Partridge said the wind energy would likely see a boon if the United States begins exporting liquid natural gas as is proposed, because that would bring up the price of gas and improve the situation for wind farmers.

Already records have been set for wind this year in Texas. On March 26, wind farms generated a record-breaking 10,296 megawatts of power for the state’s grid, according to the Electric Reliability Council of Texas. The next day, wind produced 38.4 percent of the state’s electric generation, beating the previous record set in 2013. (On average wind provided about 9.9 percent of the state’s electricity supply).

Last year was also the first full year of operation for the Notrees Wind Farm and Battery Facility’s 36 megawatt battery that along with a 153 megawatt wind farm holds enough electricity to power more than 10,000 homes. The peak days this March brought a boon to them too.

“All of ours out here were bumping up at max production,” said Stuart Gibson, Area Manager, adding a wind farm can hit maximum power any time winds are up.

The company that owns the Notrees Facility, Duke Energy, operates about 900 megawatts of wind energy in Texas and looks to develop another 400, said Greg Wolf, president of renewables for the company. And they continue to look at West Texas.

“Those upgrades that have happened over the past few years clearly have helped enable the market and made more projects viable, at least eliminated some risks of those projects,” Wolf said.

The biggest constraint to new projects Wolf said is not physical construction – costs are down with lesser equipment demand and more efficient turbine technology, for example. Instead, the biggest constraint Wolf sees to some of the 7,000 megawatts worth of announced wind projects is finding a customer.

Some developers are opting for shorter contracts should the price of gas rise. Others that began construction last year do not have contracts yet, leading some skeptics to wonder if they will come through.

Duke Energy seeks the sort long-term term contracts with big purchasers to ensure a fixed cost, as is common in other parts of the country. The company’s leaders also explore solar projects that they can pursue in the short-term to wait out a turn of the wind market.

“Clearly low gas prices are a competitive factor as people think about new generation sources, but I think wind continues to have intense demand, partly because a lot of people believe the trends of late will keep gas prices at a relatively low rate for a while,” Wolf said. “Wind power can be produced with zero fuel risks on just the price of wind and zero carbon risk going forward.”