Hollis: I think the point was already made, and it's a great point, that there's a notion that the replaced resources will always be fossil fuels, and that won't always be true. Quite frankly, you do end up leaning quite a bit on those fossil resources – especially those quick peaking units – to follow those intermittent resources. As you get more solar, as you get more penetration, as you get more wind, you must rely on something when the fuel source (the wind or the sun) is interrupted. That's not going to be a coal resource, that's going to be natural gas. Fortunately, our country is in a resurgence of the natural gas industry that's really benefiting customers from a cost perspective, but it adds some volatility as well. So you're buying some amount of gas, and you're hopefully not using it because you're going to lean on those renewable resources, but as those renewable resources are displaced throughout the day, whether it's cloud cover or decreased wind, you're going to have to rely on those peaking units, which are not the most efficient generators. You're not going to get the best output out of them, but you're going to have to use them to assure that customers have reliable service. They always have to be there to back that up until we have storage technology that's commercially viable and reasonable from a customer perspective, a cost perspective. It's going to be hard to see where those conventional peaking plants are not going to play a very important role for a long time to come.
Finis: I think that's exactly right, and that's one of the things I think a lot of the general public doesn't recognize is that the utilities have to be prepared to supplement or replace a lot of renewable energy sources on pretty much on a moment's notice if the wind should stop blowing or a cloud cover comes in or whatever the case may be. You do have to firm up that energy with something that is dispatchable.
In some cases, hydropower can be used as a dispatchable resource because of the somewhat predictable nature of river flows. Hydro can help mitigate that somewhat, and so I think that's an important element, to realize the fossil fuel fleet does need to be maintained, or the baseload fleet, which includes some hydro, does need to be in play to help firm up the intermittent renewables.
Michael Goggin: Wind energy directly displaces on a 1:1 basis electricity that would have come from the most expensive power plant that is currently operating, which is almost always the least efficient fossil-fired power plant. Wind energy displaces more expensive and polluting forms of energy because wind energy has no fuel cost, and this is a win-win for consumers and the environment. Wind energy's variability is nothing new for grid operators, who have always accommodated large fluctuations in electricity demand as well as the unexpected failures of conventional power plants. Those other supply and demand changes are still many times larger and more costly to accommodate than the gradual and predictable changes in wind output. States like Iowa and South Dakota now reliably produce more than 20 percent of their electricity from wind, and another seven states obtain more than 10 percent of their electricity from wind. At times wind energy has reliably provided more than 60 percent of the electricity on the main Colorado utility system and more than 35 percent on the main Texas system.
PE: Much of the discussion dealing with wind power right now relates to finding more efficient and effective ways to transmit power from wind power projects, which tend to be in remote areas, and places with high energy loads that can use the electricity. How do you think this is progressing, and what can be done to more effectively transmit power produced by wind?
Goggin: High-voltage transmission has been used to cost-effectively and efficiently transport all types of energy for more than a century. A large share of our best wind energy resources are currently left untapped because our power system is obsolete and congested, and the solution is getting policies in place that allow private investors to build needed transmission upgrades. Texas and much of the Midwest have established themselves as leaders in that area. Texas is wrapping up a major grid upgrade that will allow the state to nearly double its use of wind energy, while large parts of the Great Plains and Midwest are making progress towards grid upgrades that will similarly allow them to more than double their wind energy use.
PE: The majority of solar generation in the U.S. is currently provided by photovoltaic technology, but there are several concentrating solar power projects in progress – a technology that the U.S. Energy Department's Loan Program Office has called game-changing. Do you agree with this assessment, and what other technologies are on the horizon that could help more effectively use renewable generation sources?
Hollis: This is all the brave new world when you talk about solar technologies. For example, five to ten years ago, everyone really had their bets on CSP technology, with or without storage, as being a "game changer" from the perspective of how you would integrate renewables into your portfolio. The primary reason for that is because it's more dispatchable, and the storage gives you the ability to ride through the intermittency. The real game-changer that happened was price; so as solar PV panels became price competitive with every other technology and gets closer to some of the conventional generation prices when you look at peak hour pricing, it's hard to see where the CSP with its current pricing competes.
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