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Rising Wind — Time to Take a Closer Look

By Jim Caldwell, Policy Director,
American Wind Energy Association

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 U.S. in the past two years alone. 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 (about 100,000 MW of nameplate capacity) and revitalize farms and rural communities — without consuming any natural resource or emitting any pollution or greenhouse gases.

Perhaps because of its growing success, questions about the feasibility and cost of integrating large amounts of wind into the grid have arisen within the traditional energy community. Some are disturbed by the fact that the wind does not blow all of the time, making a wind plant's generation variable and generally outside human command – thus quite different from other utility generating options.

Many of the assertions that have been made about wind integration issues over the past two decades have a grain of truth. Indeed, it would be better if wind were "dispatchable" like most other generating resources. 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.

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 amounts to 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, and parts of 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.

Critics often suggest that because of its variability, wind cannot serve a given, steady amount of consumer demand. 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 a steadily shifting load. 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 this 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.

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. ELTRA is indeed making 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.

Finally, critics have also suggested that the added costs of incorporating wind's variability will be substantial — 2 cents/kWh or more. But a series of recent studies by Xcel Energy, the Bonneville Power Administration, and PacifiCorp, as well as several European countries, have found the actual cost at "moderate" penetration levels (15-25 percent of the total energy requirement) to be roughly an order of magnitude lower, or, at most, about 0.2 to 0.3 cents/kWh.

The limits to adding wind generation are generally economic, not technical. The technical limit without significant special investment like storage or dedicated export is reached at the point when wind is providing about 40 percent of the total electricity generated on the system on an annual basis. The costs associated with adding wind are negligible at low penetration levels, modest at medium levels, and can be moderated even at relatively high level. What constitutes "low," "medium," and "high" penetration levels is variable, and primarily depends on the size of the region in question, the "tariff" and cost allocation structure that applies to users of the transmission system, the "stiffness" of the transmission grid, and the flexibility of other generation on the system.

When nuclear power was first introduced in large amounts to the U.S. utility system, a number of "special" investments and changes in operating 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.

Wind is cost effective 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 U.S. are fueled by natural gas. Yet, new wind plants are expected to be cheaper than new gas plants as the existing stores of natural gas are used up and as new capital must be spent to discover more domestic natural gas or import it from areas of the world with a surplus.

Given the many advantages that wind offers to utility managers (reduced water use, no emissions or wastes to manage, fixed energy price, added diversity and reduced fuel price risk, strong economic development benefits for rural states and counties), it is time to give this energy source a closer look.
Power Engineering September, 2003
Author(s) : Jim Caldwell

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