- How much does it cost to integrate wind?
Grid operator data show that the cost of the incremental flexible reserves needed to accommodate wind amount to pennies on a typical electric bill. In fact, the cost of accommodating the unexpected failures of large conventional power plants is far higher.
- How much more wind energy can we reliably integrate?
While U.S. and European grid operators have already reliably integrated large amounts of wind energy, studies indicate that we can go far higher. Studies examining obtaining 40% or more of our electricity from wind have found no major obstacles to doing so. Ten years ago some utilities and grid operators were concerned about reaching 5% wind; they now have a lot more experience to draw from, and over the next ten years, they will surely learn more and be able to continue increasing reliable penetration.
- Don’t grid operators need to add backup to integrate wind?
No. One of main reasons why an integrated power system was first built more than 100 years ago was so that all power plants could back up all other power plants. Because most sources of variability cancel each other out, having a dedicated backup source for each would be highly inefficient and counterproductive.
- What happens when the wind doesn’t blow?
Other plants provide energy at those times, in the same way that all power plants back up all other power plants. Portfolio diversity is the key, as no resource is available 100% of the time. All power plants have reduced output at times, and grid operators plan for wind’s contribution using the same tools they use to evaluate the contributions of other resources. Adding wind power never increases the need for power plants, but rather reduces it. During a number of events wind has demonstrated its contribution to a more reliable and diverse energy portfolio by stepping in when other resources failed unexpectedly.
- Don’t we need baseload power?
Instead of using the term “baseload,” it is more productive to talk about the three main services the grid needs to operate reliably: energy, capacity, and flexibility. Energy is the production of electricity, capacity is the ability to produce power during periods of high demand, and flexibility is the ability to change output to keep supply and demand in balance. Cost-effectively obtaining all three services requires a division of labor among a diverse mix of energy sources, as no resource excels at providing all three. For example, baseload resources typically do not provide flexibility, and there can be lower-cost ways of obtaining the energy and capacity provided by baseload. Wind energy primarily adds value to an energy portfolio as a low-cost and non-polluting source of energy, though it also provides some capacity and can provide flexibility when it is economic to do so.
Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. But I can't by law give you advice, and I do make mistakes. Remember: the unexpected sometimes happens. Oddly enough, the expected does too, but all too often it takes longer than you thought it would, or on the other hand happens more quickly than you expected. The Goddess of Markets punishes (eventually) greed, folly, laziness and arrogance. No matter how many years you've served Her. Take care. Be humble. And don't blame me.
BTW, clicking on most charts will produce the original-sized, i.e., bigger version.
Sunday, February 15, 2015
Wind power reality
This blog post summarises why wind power doesn't cause the grid to be unstable and why it doesn't need massive special "base load" power stations to compensate for wind variability, at last not at the sorts of levels wind power penetration has reached so far.
Read more here. Wind and solar complement each other, and batteries are already being used to stabilise the grid and will be used much more as their costs decline. Wind is now the cheapest source of power in the US, even ignoring the investment tax credit. And solar isn't far behind.