Wind energy protects consumers
Wind energy plays a critical role in providing American consumers with low-cost, stably-priced, reliable electricity.
Wind energy repeatedly proved its reliability and value this winter by protecting consumers across the U.S. from fuel shortages and extreme spikes in energy prices. In region after region, wind energy output was consistently strong as extreme cold drove record demand for electricity use at the same time that the cold caused failures at many conventional power plants. These events compellingly illustrated that all energy sources fail from time to time, so a diverse mix of resources that includes wind energy is critical for reliability and for protecting consumers from price spikes. Here are a few examples from this winter:
Early on January 6, the Nebraska Public Power District met record winter electricity demand with wind energy providing about 13 percent of its electricity. The utility explained in a press release that “Nebraskans benefit from NPPD’s diverse portfolio of generating resources. Using a combination of fuels means we deliver electricity using the lowest cost resources while maintaining high reliability for our customers.” The utility also noted that “NPPD did not operate its natural gas generation because the fuel costs were up more than 300 percent over typical prices.”
Later on January 6, the grid operator for the Mid-Atlantic and Great Lakes states had 3,000 MW of wind output when it faced its most severe challenge of the winter due to the unexpected failure of 20 percent of its conventional power plants in the cold. On January 22 and 23, the region’s wind output was again above 3,000 MW, saving consumers millions as the grid operator saw electricity and natural gas prices skyrocket to 10-50 times normal due to another bout of extreme cold.
Finally, when “a shortage of natural gas triggered by extreme cold weather” hit California on February 6, wind energy provided the state with around 2,000 MW at the time of peak demand, with wind output above 2,500 MW for most of the rest of the evening, allowing the grid operator to avoid calling an energy emergency alert.
Nationwide in January, wind energy produced a record 18 million Megawatt-hours, the highest monthly total in history, enough electricity to power the equivalent of 20 million typical U.S. homes at average usage rates. Wind energy provided 4.86 percent of all electricity produced in the month, a remarkable feat given that the sustained record cold caused January to set a new record for winter electricity demand.
On an average annual basis, wind energy produces more than 25 percent of the electricity in Iowa and South Dakota, 12 percent or more in nine states, and five percent or more in 17 states. In certain hours, wind has supplied more than 60 percent of the electricity on the main utility system in Colorado, and the main grid in Texas has gone above 39 percent, all without any reliability problems.
Thanks to technological advances, today’s wind turbines use sophisticated controls and power electronics to provide many grid reliability services as well as or better than conventional power plants. Because changes in wind energy output are gradual and predictable, while the failures of conventional power plants occur instantaneously and without warning, it is far more expensive to back up conventional power plants than wind energy.
The Mid-Atlantic grid operator recently concluded that even if its use of wind energy increased by a factor of seven, or 28,000 MW, the need for reserves would only increase by 340 MW, about 1/10th of the 3,350 MW of reserves it holds 24/7 in case a large conventional power plant breaks down.
Last month, the American Wind Energy Association (AWEA) released a report demonstrating how wind and the Production Tax Credit are compatible with well-functioning wholesale power markets, and thoroughly debunking claims made by Exelon, the country’s largest owner of merchant power plants. Our report showed that negative prices occur at Exelon’s nuclear plants at a fraction of the rate claimed by Exelon, that the majority of those negative prices are actually caused by the inability of Exelon’s nuclear plants to change their output in response to transmission outages and other factors unrelated to wind, that the rare occurrences of negative prices are relegated to remote pockets of the grid where they have little to no impact on other power plants, and that negative prices are rapidly being eliminated anyway by new transmission lines.
We have since conducted additional analysis demonstrating that low fossil fuel prices and declining electricity demand are having a nearly 1500 times larger impact on the economics of Exelon’s nuclear power plants than occurrences of negative prices.
Wind energy is saving consumers money by displacing more expensive forms of energy. This is a market-driven mechanism that occurs for all low-variable-cost sources of generation, including nuclear. This impact is not caused by the renewable tax credit, but rather occurs due to wind’s zero fuel cost. Wind’s locked-in, zero fuel cost also plays an important role in protecting consumers from increases in the price of other fuels, whether those are short-term spikes caused by extreme weather as we saw this winter, or long-term uncertainty about the price of other fuels.
Goggin is director of Research at AWEA.