More wind means more expensive peakers, study finds
Credit: Chris Raphael, March 2, 2010, Energy Prospects West
As intermittent energy such as wind spreads, the grid will need to rely on more expensive thermal generation such as natural-gas peakers to meet demand not met by renewables, according to a February 2010 paper from James Bushnell, director of the UC Energy Institute.
What’s more, adding large amounts of wind won’t reduce the need for thermal generation by that much.
The paper looked at what electricity load would have looked like during 2007, under various levels of wind penetration. Bushnell, also a member of Cal-ISO’s Market Surveillance Committee, found that large investments in wind only modestly reduce the need for thermal generation. In California, going from no wind to more than 11 GW reduces the need for fossil-fuel power only by 1,200 MW — from 20,810 MW to 19,561 MW.
The results were the same in the Northwest Power Pool, the Arizona-New Mexico area, and the Rocky Mountain Power Pool — “the reduction in thermal capacity averages only about 15 percent of the new installed wind capacity,” Bushnell found.
Assuming wind energy would not be evenly produced across all hours, in California, average costs to meet residual energy demand not met by wind rise by $3/MWh — from $75.73 to $78.61 — in a case where wind supplies 14 percent of energy needs. In the case of 28-percent wind penetration, costs rise about 9 percent, or $7/MWh, moving from $81.87 to $88.92. In the RMPP region, costs rise close to 25 percent under the high-wind scenario.
“As the level of wind penetration increases, the investment mix … shifts towards less baseload and more peaking capacity,” Bushnell wrote.
The calculation used hourly load profiles of wind facilities in Western Electricity Coordinating Council studies.
Costs are even higher assuming a carbon price of $25/ton. The average cost to meet residual demand rises from $102.78/MWh in California under a 14-percent wind case to $106.46 under a 28-percent case.
The study also found that as wind penetration rises, the average wind generator earns more revenue with capacity payments than those that pay solely on energy production.
Bushnell offered a few caveats: The study does not model short-term operational constraints of thermal generation — which would favor nimble combustion-turbine technology. It also does not model the potential reallocation from “energy-limited” hydroelectric resources.
“In the Pacific Northwest, this will be an important resource that can go a long way toward counteracting the effects of intermittent generation,” Bushnell said.
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Tags: Wind power, Wind energy
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