Higher electricity prices have drawn sharp attention to the design of organized wholesale electricity markets—particularly to areas where residential customers’ rates will increase because multi-...
Grid reliability is one giant step in mainstreaming the technology.
Wind power is coming of age in the United States. During the past five years, installations have grown by an average 28 percent yearly. Gleaming, high-tech wind turbines now are interconnected to the bulk power grid in some 30 states. The membership of the American Wind Energy Association (AWEA) has tripled in recent years and now includes such manufacturing and energy giants as General Electric, FPL Energy, ScottishPower, and American Electric Power.
As wind power expands, increasingly energy company CEOs are facing the question of whether to invest. Some, like Terry Hudgens, CEO of PPM Energy, or the senior management team at FPL Energy, already have propelled their companies ahead of the wind power curve. Still, misconceptions linger about wind energy's potential (can wind ever be more than a niche market?), its feasibility (won't a variable resource like wind wreak havoc on the grid?), and its cost (doesn't every megawatt of wind need to be backed up with a megawatt of firm power?). This update will dispel some of those misconceptions and spotlight the real challenges and opportunities in bringing more of this new product to the wires.
Can It Be Done?
According to Deputy Secretary of Energy Kyle McSlarrow, the goal of installing 100,000 MW of wind power by 2020 (generating approximately 6 percent of U.S. electricity supply, or about what hydropower provides today) is realistic. 1 McSlarrow, speaking earlier this year, emphasized the importance of technology diversity in power generation. The Energy department estimates that approximately 600 GW of wind capacity (enough to easily provide 20 percent of U.S. power supply, or about what nuclear power or natural gas provides today) is cost-effective at the wind plant busbar when natural gas is at $4 per million BTU. In fact, gas prices that had been hovering at $5 spiked to $20 on the spot market earlier this year. The real issue, then, is the cost of reliably getting wind power from the plant busbar to market-not wind energy technology or the scale of the resource.
On Denmark's Jutland peninsula, wind generates 28 percent of the electricity supply. Several regions in Germany and Spain operate with more than 20 percent wind penetration. In the United States, regulators, utility managers, and transmission system operators in Texas "just did it" (see sidebar) and put in place more than 1,000 MW of wind power while keeping the system as reliable as any in the nation. The question facing decision-makers today is not, "Can it be done?" but "How? And at what cost?"
What About Reliability?
If wind is to contribute ever-larger amounts of electricity to the nation's wires, wind power plants need to be good citizens on the grid.
In Denmark and other regions with high wind power use in Europe, wind turbines now operate with a variety of features that actually enhance grid reliability. At the offshore Horns Rev wind farm in Denmark, for example, turbines can stay connected in the event of a short-circuit and help maintain the system's power quality. Cutting-edge