Former Texas Governor and new Energy Secretary Rick Perry recently asked for a 60-day review of the nation’s power grid to assess the impact of federal policies on energy sources vital for grid reliability, resilience and affordability. I’ve said I think Perry — who led Texas as Governor to become a wind powerhouse — is asking the right questions, and he’ll like what the review finds.
Last week, I addressed Perry’s first yardstick — the marketplace and wholesale electricity prices, which have dropped more than 60 percent since 2008. By no accident, this occurred as low-cost wind power grew more than five-fold, joining low-cost natural gas as market leader on price. That’s been great news for businesses and consumers.
Wind Makes Grid More Reliable and Resilient
In this column, I will tackle Secretary Perry’s second line of inquiry: How has the changing energy mix and policies impacted reliability and resilience of America’s grid?
The short answer — as with electricity prices — is more good news for U.S. energy customers. Contrary to doubters, the new business reality of today’s energy market belies outdated notions about the grid from when it was largely coal, gas and nuclear-powered. Competition has spurred a diverse mix of low-cost, home-grown energy choices, and utilities and corporate buyers have voted with their checkbooks. Markets are driving widespread switching from coal to gas and mainstreaming more than 200 GW of renewables capacity. Wind is now No. 1 over hydro among U.S. renewables, and most of this cheap clean power — 13 percent of the U.S. total — is reliably plugged into the grid.
America’s grid has not only adapted to today’s “all-of-the-above” energy mix. It has actually gotten stronger.
More than a decade of experience by utilities working with renewable energy has yielded major improvements in grid flexibility. Today, large amounts of wind power are reliably integrated on the grid without difficulty or disruption.
In Iowa, which has the highest-per-capita wind-generated electricity, grid reliability improved 15 percent over the past decade, MidAmerican Energy reported, at the same time wind power across the state grew more than 15-fold.
Regional Grids Handle 50 Percent Wind and More
Wind’s record for grid reliability is particularly strong in regional markets, where power pools in the Great Plains and Texas have demonstrated they can handle 50 percent or more electricity from wind with no difficulty.
In February, wind generated more than half, 52.1 percent, of electricity on the Southwest Power Pool (SPP) grid, which serves the 14-state region stretching from Texas to Montana. “It’s not even our ceiling,” says SPP’s Bruce Rew, who cites new studies showing SPP can go even higher, “to serve 75 percent of its load with wind.”
PJM, regional grid operator serving the 13-state central Eastern U.S., published a recent study showing its grid can handle 75 percent and higher wind penetration while maintaining resilience and reliability. PJM also reports wind complements gas in strengthening grid resilience against interruption from Polar Vortex events.
Significant upgrades by grid operators over the past decade have transformed the flexibility and efficiency of U.S. power pools, enabling them to accommodate wind and solar intermittency while fully leveraging their lower energy costs, in a mix with other low-cost fuels such as natural gas.
The result of these investments has paid off. Low-cost wind is not only a key contributor to reduced wholesale electricity prices. Independent studies from NREL and others show wind has helped improve overall grid reliability and resilience.
Wind turbines performed well in the 2014-2015 polar vortex when other electric technologies tripped offline. Texas’ primary grid operator, ERCOT, credits wind energy with helping keep the lights on in a 2011 cold snap that caused conventional plants to fail. Wind turbines provide reliability services as well as or better than conventional generators.
New Economic Reality Delivering
Some may not like this new economic reality, but it is a reality driven largely by the marketplace. And it’s delivering cheaper electricity to millions of U.S. businesses and consumers, over an improved grid that has proven its resilience and reliability in the new energy mix. Wind, gas and solar are the market’s current preferred choices based on price, and accounted for more than 90 percent of new U.S. utility-scale electric-generating capacity last year. That was good news for the half a million U.S. workers in those industries, who will number more than million in years to come.
Federal and state policies have a role, encouraging innovation, ensuring a level playing field, eliminating barriers to entry, and enabling a stable investment environment. But the marketplace is, and should remain, the final arbiter of winners and losers, based on price. That’s a competition the U.S. wind industry is eager to continue engaging, and will continue to benefit U.S. energy customers and consumers.
Turning back the clock to high electricity costs and an antiquated grid isn’t the answer — for consumers, businesses or America’s energy future. Nor is arguing with business reality based on ideology. The marketplace has a better solution.
We should keep working to improve that winning proposition.
NEXT WEEK: More on how federal policy can further empower U.S. energy markets, and what can be learned from states and the supply chain.