Midwest Study: Adding More Wind Power Will Save Money

Adding more wind power to the electric grid could reduce wholesale market prices by more than 25 percent in the Midwest by 2020, according to a new analysis.

The report, conducted by Synapse Energy Economics and commissioned by Americans for a Clean Energy Grid, found that wind power could drive down the wholesale price of power by $3 – $10 per megawatt hour (MWh) in the near term and up to nearly $50 per MWh by 2030. Those savings would be passed along to consumers through lowering retail electricity prices by $65-$200 each year.

The analysis also found that new transmission is needed in the region to tap wind power; however, investments in transmission are small compared to the savings they would reap, providing more than a 2 to 1 return on investment throughout various scenarios. The connection between new transmission and cost savings to the consumer is something that the wind power industry has been highlighting for several years.

“This analysis illustrates a basic fact about our power system — building transmission to unleash cheaper, domestic resources makes strong economic sense,” said John Jimison, managing director of the Energy Future Coalition and Americans for a Clean Energy Grid. “Transmission makes up the smallest sliver of the electricity bill, but can make power markets more competitive and drive down costs for everyone. Midwestern states where some of the most valuable and abundant wind power can be found have a real opportunity to capitalize on these findings and continue investing in the infrastructure they need to facilitate additional generation of clean power.”

The study, titled “The Potential Rate Effects of Wind Energy and Transmission in the Midwest ISO (MISO) Region,” evaluated the electric power market in the upper Midwest including all or most of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan and parts of Montana, Missouri, Kentucky, and Ohio.

The report points out that wind as an electricity supply resource has been getting steadily cheaper, and its performance characteristics continue to improve as larger turbine sizes and higher hub heights capture both economies of scale and more of the passing wind. Simultaneously, the projected cost of coal-fired power has begun to climb; the increasingly global coal market has given rise to higher coal prices with new EPA environmental controls contributing to the move away from coal.

Carl Levesque is the communications editor at AWEA. This article first appeared in the AWEA Windletter and was reprinted with permission from the American Wind Energy Association.

Image: Terrance Emerson via Shutterstock

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Carl is Editor & Publications Manager at the American Wind Energy Association, where has worked since 2006. At AWEA he oversees AWEA's online and print publications including the Wind Energy Weekly, Windpower Update, and other products. He has worked as a journalist in the energy industry as a staff writer for Public Utilities Fortnightly magazine and in the association sector as senior editor at Association Management magazine. He also has covered the home-building industry, where his areas of greatest interest were sustainable development and "smart growth," and has written articles for numerous other publications as a freelance writer. Carl received his B.A. from James Madison University and spent some time in New Orleans teaching as well as working with homeless youth.

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