Utility Integration of Wind Power

Wind power is a reality today. More than 2,000 MW of wind generation – enough to serve more than 600,000 average American homes – were installed in the United States in the past two years alone.

RE Insider – March 31, 2003 With continued government encouragement to accelerate its development, this increasingly competitive source of energy can provide at least six percent of the nation’s electricity by 2020, revitalizing farms and rural communities – without consuming any natural resource or emitting any pollution or greenhouse gases. While wind generates only a small fraction (about 0.3 percent) of U.S. electricity today, another way of looking at that number gives a different view: to generate the same amount of electricity using coal would require a train of coal cars more than 500 miles long, each year. Perhaps because of its growing success, wind is increasingly becoming the target of critics within the traditional energy community. They are disturbed by the fact that the wind does not blow all of the time, making a wind plant’s generation highly variable and thus quite different from other utility generating options. As someone who has been actively promoting wind energy since the late 1970s – spending the bulk of that time with the American Wind Energy Association (AWEA), the wind industry’s only national trade group – I’ve had a unique opportunity to follow the progress of the “case against wind,” in all of its various forms, over time. Many of the negative assertions that have been made about wind over the past two decades have had a grain of truth. Yet despite its modest drawbacks, the wind energy industry has continued to advance steadily, weathering a difficult policy environment, and now stands as the “poster child” of the energy crises of the 1970s. This is not because thousands of people have been hoodwinked into ignoring the real facts about wind. It is because those facts are much more positive than critics suggest. Sometimes, common sense really is a helpful guide: wind energy is attractive because it is clean, and it is growing because its costs have declined steadily. In this article, I would like to look at several common complaints about wind, and then dwell briefly on some little-recognized benefits of wind-generated electricity. Complaint: The wind doesn’t blow all the time, so it’s unrealistic to count on it to supply all of our electricity needs. Response: · Why should we require of wind what we don’t require of any other energy source? We don’t expect coal, or nuclear, or hydro to do it all. Why should we expect that of wind? Why would we not opt instead for a mixed portfolio of all five renewable energy sources, taking advantage of their regional availability and their complementary characteristics? · Simply because it is impractical to generate all electricity from wind, it does not follow that we should not make reasonable efforts to increase the amount of wind in the utility generating mix. Wind is far cleaner than the average of that mix and cheaper than most new alternatives, and is therefore desirable from a public policy point of view. · The amount of wind in the U.S. generating mix, and in many regional portfolios, can be substantially increased with little or no operating difficulty. Wind today stands at roughly 0.6 percent of national generating capacity, and 0.3 percent of electricity supply. Grids in California and Texas today operate with roughly 10 times that level of wind energy without difficulty. Grids in Denmark, Germany, and Spain operate with roughly 100 times that level of wind energy and only now are beginning to think about “special” investments in order to allow further expansion of wind energy. Complaint: Electric utilities need “dispatchable” power plants (plants that can be turned on and off as required) to respond to electricity demand. Response: · Critics often suggest that because of its variability, wind cannot serve a given, steady amount of consumer demand. But it’s not that simple. In fact, electricity demand is a constantly moving target. The more accurate picture is one of a number of generating plants moving on and off-line throughout the day to meet that constantly shifting target. At any one time, only some 15 percent of the total generating capacity on-line is consciously “dispatched” to keep load and generation in balance. Obviously, a variable generating source fits into the latter picture much more readily. In fact, at relatively low “penetrations” (where wind is providing less than, say, 10-20 percent of the electricity on a system in any given hour), its variability is essentially lost within the larger, shifting variability of the system. The rule of thumb – admittedly rough – is that until wind provides 10 percent to 20 percent of the electricity on an annual average basis, it can be accommodated without significant added equipment on most transmission grids. · When nuclear power was first introduced in large amounts to the U.S. utility system, a number of “special” investments and changes in operations procedures were required to accommodate it and the possibility it brought, of large, “lumpy” plants suddenly going out of service and imperiling system stability. Wind power is simply another new energy source, with different operating characteristics, that will require its own set of changes to be fully integrated. Complaint: Because it is too costly, wind energy is being heavily subsidized. Response: · Wind is not too expensive for widespread commercial application – new wind plants can and do compete with new generating plants using other technologies. Today, most new generating plants constructed in the United States are fueled by natural gas. Yet, new wind plants are cheaper than new gas plants once the existing stores of natural gas (roughly seven years) are used up and new capital must be spent to discover more domestic natural gas or import it from areas of the world with a surplus. · Utilities in Texas, required by state law to install 400 MW of new renewable generating capacity by January 1, 2003, instead installed more than 900 MW of wind alone a year early. Why? Because it cost less than they had anticipated and less than other alternatives they were considering. · Federal subsidies for wind are dwarfed by those for competing sources. One recent study[1], for example, found that federal subsidies of all types for wind, solar, and nuclear over the past 50 years had totaled US$150 billion – and that nuclear received 95 percent of the total. Complaint: Since a wind plant would generate only 30-40 percent of its total rated electric capacity over a given period of time, the capital and operating costs of a conventional plant for the other 60-70 percent of its operation should be included in wind’s costs. Response: · Is this how the economics of, for example, a gas peaker plant that operates, on average, less than 10 percent of the time are calculated? No. · The correct way to assess the cost of a wind plant is, first, to calculate its life-cycle levelized cost of energy (total kWh generated over the plant lifetime, divided by total costs, adjusted for inflation), and second, to add or subtract any additional utility system costs that are specifically required to modify the system to achieve the same reliability as would have existed but for the wind plant. The latter incremental costs will indeed slowly rise as more and more wind is added to a system, and that is as it should be. · A real-world example of a high-wind utility system can be seen in western Denmark, where the utility ELTRA obtains more than 100 percent of its electricity from wind during some low-load hours of the year (the surplus is exported), and where wind constitutes more than 50 percent of required system capacity and non-dispatchable small combined-heat-and-power plants constitute another 30 percent. If the criticism were correct, such a system should be either inoperable (due to its lack of dispatchability), fantastically expensive, or both. Neither is the case. ELTRA is indeed planning to make changes to its system to improve its operations and to accommodate new offshore wind farms, but there is no indication that a wholesale shift away from wind is needed or desired. Complaint: When the wind blows, other power plants must be throttled back in response. Such throttle-backs cost consumers and should be included as an extra cost of wind energy. Response: · In fact, the “throttle-backs” ALWAYS SAVE money. The plant that throttles back is, by definition, the highest-cost, least-efficient plant on the system at the time the wind picks up. The incremental wind energy, by definition, costs almost zero and avoids the expense of fuel consumption on these “marginal” plants. · In addition, the criticism assumes that emissions reductions have no value. If in fact they do have value – in reduced human health and environmental cleanup costs – then the throttle-backs doubly BENEFIT us all. The plants that are throttled back to make room for the “free” incremental wind energy are almost always the dirtiest as well as the highest cost plants. When the average U.S. utility generating mix is used to generate as much electricity as a single 1 MW wind turbine, 10 tons of sulfur dioxide and 6 tons of nitrogen oxides are emitted each year, as well as 2,000 tons of carbon dioxide, the leading greenhouse gas. · As indicated above, power plants must throttle back anyway, and shut down, and come on-line again, to meet fluctuating customer demand during the course of a normal day. The question is, what additional variability does a new wind plant contribute to that already-dynamic situation? Only that added variability – and any operations costs associated with it – can fairly be assessed against the wind plant. These are some common complaints about wind. But this promising new energy source offers a series of benefits for utilities that are often unrecognized. For the benefit of policymakers, here is a brief check list to be considered [2]: 1. Wind’s fuel cost is constant, providing added value as a hedge against sudden, unexpected increases in the cost of other fuels such as is currently occurring with natural gas. 2. Cost-competitive with traditional generation technologies. 3. No emissions to manage. 4. No flammable or hazardous fuels to manage. 5. No high-pressure steam to manage. 6. No water resources to manage. 7. Breeds new life into a power business that is otherwise matured (leading to new innovations, etc.). 8. Will require that the national transmission grid be improved, making power in general more reliable. 9. An upgraded transmission network (required for the wind industry) will allow the competitive wholesale market to work more effectively. 10. A new industry attracting a well-paid professional work force (engineers, skilled technicians, etc.). 11. Wind power offers new opportunities in rural areas, many of which are in economic decline. 12. The limited onsite operations support required by wind farms will not overtax the limited resources available in a rural setting. 13. Wind farms bring new opportunities for tourism to local rural communities. 14. Wind farms create a new tax base in rural areas. 15. Wind farms will create demand for new support organizations (more heavy lift cranes, more independent electricians, etc.). 16. An expanded U.S. wind industry will attract manufacturers that are currently overseas. 17. The wind industry will create new ways to look at grid power management that will open the door for other emerging technologies (electricity storage, etc.). 18. Wind power will create the demand for more education support systems (“wind smith” training programs, expanded engineering programs, etc.). 19. Wind farms will help to safeguard the nation’s energy supply by increasing the number of dispersed generation stations (not an attractive target for terrorists). 20. The wind industry will lead to new alliances that will create greater understanding overall (alliances between environment groups and energy companies, etc.). 21. Successes with government wind policies will lead to similar policy innovations for other industries. 22. Wind plants improve the nation’s energy security because they do not require imported fuel. 23. Wind plants improve the nation’s energy security because they do not require a fuel transportation infrastructure. 24. No fuel waste residues to manage. 25. Wind plants are compatible with existing land uses (farming, ranching) in many rural areas. 26. No fuel resource depletion. 27. Wind farms are modular and can be installed as demand expands, reducing investment risk. 28. Wind farms are modular, reducing the probability of overall plant outages due to equipment failure. 29. Wind plants can be installed quickly if required in response to energy market conditions. 30. No fuel resource extraction (with attendant management issues and costs). 31. Adds diversity to generation portfolio, reducing business risk. 32. Wind farms can help preserve family farms by providing added income. 33. Where hydro is the dominant generation source, wind farms can help to extend hydro supplies in times of drought. The bottom line? Wind energy’s success in the marketplace, quite simply, reflects the attractiveness of the technology. On balance, it is the most attractive new energy source available to the utility industry today. **** References: [1] Federal Energy Subsidies: Not All Technologies Are Created Equal, Marshall Goldberg, Renewable Energy Policy Project 2000. Available on the Web at http://www.repp.org/repp_pubs/articles/resRpt11/subsidies.pdf [2] Many of the items in this list were originally suggested in 2002 by Steve Williams, a communications consultant formerly employed by American Electric Power. About the Author: Tom Gray is Deputy Executive Director and Director of Communications for the American Wind Energy Association, which he joined in 1980 as manager of its then newly-developed wind energy standards program. He has served AWEA in a number of capacities over the years, including a nine-year stretch as Executive Director (1981-1989). He currently directs its communications operations (newsletters, news releases, publications, Web site, Internet chat lists, etc.) and is also responsible for following avian-wind power interaction issues. Gray has a B.A. from Haverford (Pa.) College and a J.D. from the Catholic University of America. He can be reached at: tgray@awea.org
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