How Wind Energy Saved Customers $1 Billion In Just Two Days
Originally Published on the ECOreport
Wind energy saved customers $1 billion in two just days last year. Frigid Arctic temperatures spread over the 13 Mid Atlantic and Great Lakes states on January 6 and 7, 2014. There was not enough conventional energy to meet demand. According to the American Wind Energy Association (AWEA), spot prices would have skyrocketed if had there not been an abundance of wind energy available.
“This number is conservative,” said Michael Goggin, of the American Wind Energy Association. “We didn’t look at how wind helped to keep gas price spikes in check. We only looked at the impact on electricity.”
January 6 started out as a typical winter day, as the cold cold front moved in that evening the demand skyrocketed. People were turning on their heaters. Many conventional power plants were failing. At the peak of the cold snap, 22% of the system’s generation was down. Demand started exceeding supply, resulting in extreme price spikes that you see in the chart above.
If there had not been abundant wind energy available through-out this period, the utilities would have been forced to rely on their most expensive power plants. In some cases, Goggin says the wind energy meant that lights could stay on. Instead there was sufficient wind energy to keep most expensive forms of generation offline. It also freed up some natural gas, which otherwise would have been needed to produce electricity, so that it could be used to heat homes.
Some of Goggin’s conclusions has been confirmed by other sources. As you can see in the diagram above, a Pembina Institute study of 2013 prices in Alberta found wind energy was substantially lower that all alternative forms of energy. The addition of wind energy invariably lowers spot prices, even in normal circumstances and would have an even greater braking effect in a situation where the alternative was high priced peaker plants. A senior executive from one of the energy storage companies I interviewed confirmed that coal plants go down suddenly and leave far bigger holes in transmission than do renewables. He added that this only happens once or twice a year in his territory.
“One of the primary lessons that has come out of this analysis, is that you don’t want to be overly dependent on one fuel mix,” said Goggin. “No energy resource is 100% reliable. The cost of accommodating the abrupt outages of conventional power plants, especially a large one, is significantly greater than accommodating changes in wind output.”
(An energy storage company confirmed that a coal plant, for example, leaves a much larger hole in transmission when it goes offline and it happens suddenly, but this only happens once or twice a year in his territory – author.)
He said this was not an isolated occurrence. Goggin illustrated wind energy’s usefulness using current data which AWEA printed in their press release:
In the last 24 hours wind set a new output record for the MidContinent ISO (MISO) and for the Southwest Power Pool (SPP), an area that covers much of the Midwest. Wind also performed at near-record levels in the PJM market (PJM).
At about 11 p.m. EST last night, wind set a record output of 11,725 MW of wind generation or enough power for over 9 million average U.S. homes for the MISO region. The MISO area covers all or part of, Michigan, Indiana, Wisconsin, Iowa, Minnesota, North Dakota, South Dakota, Ohio, Missouri and Montana.
At about 6:15 a.m. EST this morning, wind set a record output of 7,625 MW of wind generation or enough power for over 6 million average U.S. homes for the SPP region. The SPP area covers all or part of, Nebraska, Kansas, Oklahoma, Texas, New Mexico, Missouri, Arkansas and Louisiana.
Turbines begin producing energy when there are around 8-9 mph winds. They reach peak production at 20-25 mph and can be used up to 55 mph.
“Most wind turbines aren’t designed to work beyond 55 mph because it almost happens,” said Goggin. “To my knowledge, we didn’t see that happen last year or last night.”
“When you add wind energy it displaced the most expensive energy on the system at that time. Over the long term, you also protect customers from fuel price uncertainty,” said Goggin.
He added, “When your building a power plant today your not just thinking about what the price of fuel is today, you should be thinking about what the price of fuel will be over the life of that power plant. You will always know what the price will be (its’ free, the only costs are mechanical). You can’t say that about any other energy source.”
Note on Images: Aside from the chart of energy prices in Alberta, which comes from the Pembina Institute, all images were taken from the AWEA slide show at Michael Goggins press conference
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