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July 31, 2007


AY By Carl Levesque, American Wind Energy Association

Shell WindEnergy Inc. and TXU Corp. subsidiary Luminant announced on
July 27 a joint development agreement for a 3,000 megawatt (MW) wind
project in the Texas Panhandle.

Under the arrangement, the companies also agreed to work together on
other renewable energy developments in Texas. Shell Spokesman Tim
O'Leary referred to the arrangement as an "agreement to explore the
development" of the project. O' Leary said that construction will
probably be "about three years away," given that the project will
require transmission to be built linking the area to load centers.

Last week, the Public Utility Commission of Texas selected eight
"competitive renewable energy zones" (CREZs) for the Electric
Reliability Council of Texas (ERCOT) territory, directing ERCOT to
develop transmission plans for wind capacity in the range of between
10,000 MW and 25,000 MW.

The announcement said Shell and Luminant will also explore the use of
compressed air storage, in which excess power could be used to pump
air underground for later use in natural gas-fired generation.

A gas turbine operates by burning compressed air and compressed
natural gas. Through the compressed-air storage approach, the
companies would seek to realize substantial savings by using lower
cost wind-generated electricity to compress the air. The compressed
air would be injected into gas turbines that generate electricity to
meet demand. According to Shell, studies indicate that compressed-air
storage may start to be economical for wind projects greater than
2,000 MW in size.

"Luminant is committed to providing Texans with clean sources of
energy, and this agreement with Shell is a real next step in
delivering on that commitment," said Mike Childers, CEO of Luminant
Development. "Luminant is already the state leader in wind-energy
purchases, and co-developing this project would take us a long way
toward our goal of doubling our portfolio."

Recent testimony by Shell before the Public Utility Commission of
Texas asserted the Briscoe County project could deliver the lowest-
cost wind energy for consumers. That low cost is driven by excellent
wind resources and the comparatively lower cost to bring the energy to
market from the Texas Panhandle region, Shell said.

"Shell is constantly looking for solutions to deal with climate change
and increasing our energy diversity. Wind is part of the answer. Our
approach is a cost-effective solution for consumers," said John
Hofmeister, president of Shell Oil Co.

This article first appeared in the July 27th edition of Wind Energy
Weekly, the American Wind Energy Association's weekly newsletter, and
was reprinted with permission from AWEA.

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