Adding wind energy to the power system drives electricity prices down, as it has zero fuel cost and so displaces the most expensive power plant currently operating. This is great news for consumers, even though lower prices may elicit objections from those who own competing forms of electricity production. A recent analysis by Synapse Energy Economics confirmed that adding wind energy to the grid saves Midwest consumers $65 to $200 per year.
While wind power does reduce electricity prices, the PTC on its own simply enables more wind generation to be built, and does not have a major impact on real-time electricity markets. With or without the PTC, once a wind farm has been built, the electricity it generates is going to enter the real-time electricity market as one of the lowest cost options available.
Instances of power prices being lowered so far that they go negative are very rare, accounting for only 1 out of every 4,500 electricity market price points last year. Moreover, many of those were caused by hydroelectric dams and nuclear power plants, which also have very low fuel costs. Even the few instances that actually were linked to wind will be largely eliminated over the next several years as new transmission allows low-cost wind energy to reach more consumers.
Zycher’s claims about how wind is reliably integrated onto the power system are incorrect. Changes in wind output are generally gradual and predictable, while outages at conventional power plants occur suddenly and without warning.
All forms of energy have their incentives; wind is no exception. However, with the right support, American wind power will continue to diversify our energy mix, invest billions of dollars more into our economy, and create thousands of quality jobs that can’t be outsourced.
Gramlich is senior vice president for public policy at the American Wind Energy Association.