The growth of Renewable Energy could usher in a future where our energy is produced at the same place where it is consumed – and power is literally returned to the people.
But well-intentioned government subsidies in the USA and the UK are threatening to turn the wind industry businesses into subsidy junkies, churning out energy for the good of the large utilities instead of benefiting the end users or the environment.
All over America and Britain, regional grid operator are ordering wind farms to reduce output or stop running – a process called curtailment. Letting them all operate at certain times could overload the grid and jeopardize reliable service.
What is worse – the grid operators are PAYING the wind farms each time they are ordered to reduce their output,
Britain’s National Grid has paid out over $50 MILLION in the past year according to industry analysts at the Renewable Energy Foundation (REF).
The problem could get worse in the future, according to the grid operators, if many more wind projects go on line, as planned.
Wind companies knew about these constraints when they built the plants. But utility rules meant to encourage renewable energy let them install feeder lines that meet only minimum standards.
Upgrading transmission lines will take money, and that will come from ratepayers. It’s too soon to say how much the upgrades would cost.
But the investors in wind farms still make money, even if the power isn’t sold on the grid, because of how these projects are financed and the rates companies have negotiated for their energy.
More than 95 per cent of payments to energy firms last Saturday were to constrain energy produced by wind farms in Scotland because there is limited network capacity between Scotland and the rest of Britain creating a bottleneck of supply.
Known as ‘balancing’, the arrangement is intended to compensate firms for energy they are unable to sell.
But as the number of wind farms grows, the rates have hit record levels. Firms are often paid more to turn off their giant turbines than for the electricity they produce.
Last weekend alone in the United Kingdom, householders handed £3.1million to energy firms for doing absolutely nothing as up to 30 wind farms were paid to switch off.
The energy that could have been produced between Friday and Sunday would have powered up to 12,000 homes for a year said REF.
At one point, 40 per cent of all the wind energy set to be transmitted to the National Grid was instead discarded, with the loss being blamed on maintenance work and breezy conditions.
The amount of wind energy discarded that day was almost twice as much as any other day on record, and cost families £1.9million. It was one of three days since May when wind farms were told to cut their output by more than a third.
On June 30, 46 per cent of energy from turbines was constrained.
In total, payments worth almost £15million have been made this year – more than double the amount given in all of 2012. If the trend continues, the bill for the year will be around £30million.
The figures only relate to giant turbines connected to the national distribution network, which make up 70 per cent of wind power.
There are 5,000 giant turbines across the country, with another 1,000 planned. Under EU law, Britain’s energy consumption from renewables needs to reach 15 per cent by 2020.
Payments known as ‘forward trades’ are also made to energy operators by the National Grid. This is where it agrees a payout in advance when the weather is expected to be stormy.
In the USA it is wind farms in Maine, where most of New England’s wind output is located and where far-flung additions are planned, that are most at risk for being taken off line or cut back. That’s because they are located in remote areas most likely to be serviced by dated transmission lines. Boston-based First Wind, Maine’s leading developer, says roughly 20 percent of the power at four Maine projects was curtailed last year, although at least half of that was due to construction in a major transmission corridor.
But these measures won’t eliminate the need to beef up transmission lines closer to the turbines, according to Stephen Rourke, vice president for systems planning at ISO-New England.
“As we get more and more wind, we are going to need to see some enhancement to the network, more transmission lines built, to unlock large amounts of wind,” Rourke said in an interview with the Maine Sunday Telegram. “Our work will help but not solve the problem.”
In neighbouring Vermont, the largest electric utility knew the limits of its Lowell Mountain wind project and that it would be asked to keep electricity generated there off the grid from time to time, the head of New England’s electric grid wrote in a letter to Gov. Peter Shumlin.
Gordon van Welie, the president of grid operator ISO New England, was responding to a letter from Shumlin last month in which Shumlin said he felt ISO New England needlessly kept Lowell Mountain power off the grid at a time of high demand, a heat wave July 19. During that time, the utility, Green Mountain Power, was also asked to produce power with its least efficient and environmentally dirtier jet engine and diesel generators.
Van Welie countered in his letter dated Tuesday that by preventing Green Mountain Power’s wind project from sending all the power it was capable of producing to the grid during the heat wave, it enabled the grid to accept renewable energy from other, unnamed, nearby renewable energy providers.
The wind project “was competing with other wind and hydropower resources for limited space on the transmission system,” van Welie wrote in the letter, dated Tuesday.
The exchange highlights an ongoing difference of opinion between the grid operator and Green Mountain Power and the Shumlin administration about the best, most reliable way to bring electricity produced by wind farms and other renewable energy projects into homes and businesses.
In a recent background paper on the issue, ISO-New England set out the challenges.
The region now has 700 megawatts of installed wind capacity, with 500 megawatts in Maine. That’s enough installed capacity to supply more than 150,000 homes, based on average annual output. Projects that could triple today’s capacity are in the planning stages. The trouble is, most are located in rural areas, far from customers.
“The transmission resources in these parts of New England were built to serve the native load, but not designed to accommodate the addition of generation sources or the movement of large amounts of power,” the paper explains.
A DOUBLE SET OF STANDARDS
More than 8,000 miles of high-voltage lines connect 350 power plants in the six New England states. Many lines are being upgraded, including Central Maine Power Co.’s backbone system that runs from Orrington through southern Maine. As part of CMP’s upgrade, big 345- kilovolt lines were extended to Detroit and Lewiston.
But the Maine Power Reliablity Project wasn’t designed to hook up individual power plants through smaller, 115-kilovolt lines, according to John Carroll, a CMP spokesman.
“The MPRP is the highway and those are access roads to the highway,” he said. “We did improve access, but it’s a long way to the western mountains, where you’re going to have those constraints.”
Conventional power plants that hook into the grid are required to design their connections to meet certain technical standards for voltage and thermal performance. These standards are meant to keep lines from becoming too hot or electrically unstable. But federal utility regulators have allowed wind projects to connect with only minimum standards.
“However,” the ISO paper continues, “this standard does not ensure that the resource will be able to put its full output on the grid. Generators that do not fund additional elective upgrades to enhance their access to the transmission system, or connect to a relatively weak area of the system, are at a higher risk of being curtailed.”
So far, every wind generator that has hooked up to CMP’s system has chosen to meet only the minimum standards, Carroll said.
Compounding the problem for wind is the way ISO-New England schedules power plant output for the next day, based on a generator’s price and ability to run. Wind farms often can’t predict how much power they can produce the next day. And even if they do have power to offer, they may not be called on by the ISO, because firm commitments from natural gas, hydro and other plants already are in the queue.
Power plants don’t get paid when they aren’t selling energy, according to the ISO. The exception is plants that receive capacity payments, essentially a stipend for being available for emergencies.
But even with curtailment, wind companies and their investors can still make money. That’s because wind qualifies for above-average rates, long-term power contracts and production tax credits meant to encourage renewable energy. Some projects also got millions of dollars in federal stimulus money during the recession, and investors received tax benefits.
‘A RECIPE FOR FAILURE’
To critics of wind power in Maine, curtailments are just another reason to limit the number of new projects.
“In the last few years, $1 billion has been spent on wind, and it doesn’t make a material contribution to the grid,” said Chris O’Neil, a lawyer who represents Friends of Maine’s Mountains. “If another $1 billion is spent, how much worse will congestion be, and how much more will that increase transmission rates?”
O’Neil said that locating wind projects on remote mountains, far from cities, “is a recipe for failure.”
Curtailment could become a bigger issue as more wind is placed in the system, First Wind acknowledges.
First Wind had 185 megawatts of installed capacity operating in Maine last year, enough to power 66,000 homes. The company is planning the biggest wind farm in New England, a 186-megawatt project around Bingham that will include 62 turbines. Last week, it received approval to build a 54-megawatt project next to its Bull Hill Wind farm at Township 16, in Hancock County.
First Wind had 20 percent of its power curtailed last year at its Bull Hill, Stetson I and II and Rollins projects, according to John Lamontagne, a company spokesman. At least half of that was due to CMP’s construction, he noted, and that won’t be an ongoing issue.
First Wind also is spending money to upgrade a transmission line in Lincoln, Lamontagne said. That will help projects in eastern Maine but not solve the overall problem.
“While developers can improve the transmission system on a project-by-project basis, we believe the region is in a better position to make upgrades that will benefit the whole region by allowing more wind penetration,” he said.
Wind developers want ratepayers to pick up a larger share of the upgrade costs, and they have a recent ruling by federal utility regulators on their side. To the extent that New England policy makers decide in the coming years that more renewable energy benefits the region, customers will help pay for new transmission lines.
LEARNING TO GAUGE OUTPUT
Beyond upgrading transmission lines, the ISO has some ideas how to improve wind’s availability and reduce curtailments.
The systems operator is planning to incorporate wind forecasting and weather information, as well as historical data, to help schedule turbines. Generators will be asked to automatically communicate real-time power output and weather conditions.
The ISO also is upgrading the algorithm, or data-processing calculations, used to dispatch wind plants. It will let plants know every five minutes how much power they can safely put onto the grid. These and other enhancements are expected to be done in early 2015.
New England also may learn some lessons from Texas, the country’s leader in wind generation.
Three years ago, wind power expansion began to overwhelm the existing transmission network and the state’s grid operator began backing wind down. Since then, it has reduced curtailments with a computerized data tool that helps balance massive amounts of wind power from West Texas with the Gulf Coast and northern Panhandle.
On one day last year, the management tool helped integrate 7,500 megawatts of wind power into the Texas grid, according to a report in Greentech Media. That added up to a record-setting 22 percent of the state’s entire electric load.
Van Welie’s letter referred to above, acknowledged the need to find better ways to integrate small-scale projects into the grid, but it also showed the continuing differences of opinion about the best way to get wind-produced electricity to as many customers as possible, Vermont Deputy Public Service Commissioner Darren Springer said Wednesday.
He said he hadn’t realized that other renewable electricity producers were able to send power to the grid after the Lowell Mountain project was curtailed as van Welie’s letter said.
“Clearly, there are some differences of opinion of ISO’s interpretations of events and the perspective of the state of Vermont and other stakeholders,” Springer said.
“If they’re claiming they were curtailing one renewable to bring on other renewables, that would be interesting. We’d like to talk more about that,” he said.
Van Welie’s letter said the restrictions on the Lowell project would be reduced, but not eliminated, once a specialized piece of equipment known as a synchronous converter is installed.
Green Mountain Power spokesman Robert Dostis said that what was missing from van Welie’s letter was a plan and timeline for achieving maximum use of existing and planned renewable energy resources in New England. The letter also failed to note that GMP had worked with ISO New England for at least two years in planning the Lowell project without being told there would be interconnection issues, he said.
“If, as a region, every state wants to incorporate more renewable (power) generation, it’s important that ISO New England give greater certainty that when those resources are producing power that they are incorporated into the grid and they are not curtailed,” Dostis said.
In the UK, where farms are being given around £30million a year in compensation to switch off or slow down their turbines, nearly half the electricity they make is not needed.
The cash, which comes from household bills, is paid when the National Grid is unable to cope with the extra power produced during high winds or periods of low demand.
But Dr John Constable, director of the Renewable Energy Foundation, said: ‘The increasing volume of discarded wind energy presents a very strong case for revising UK’s ambitious commitment to EU green targets. Allowing subsidised generators to name their price to stop causing problems is a lousy solution.
‘They are abusing their position by holding a pistol to the head of Government and effectively saying we will not get off the grid unless you pay handsomely. Ofgem must do something about this.
‘It’s already a record year and it’s set to be a bumper one looking at the costs. We are on track to spend more on constraining wind than all of the previous years combined. And the problem just seems set to be getting worse.’
Generous taxpayer-funded subsidies for wind farms are set to continue until at least 2020.
Onshore wind farms have been guaranteed at least £100 per megawatt hour, which is a unit of energy equal to using a million watts of power in one hour. This is double the current wholesale rate of £50. Offshore wind farms receive £150.
Last weekend, two Scottish windfarms charged £200 per megawatt hour to shut off.
With greater wind production becoming available all the time, experts warn the overall cost of these payments is set to rise.
Energy analyst Mulu Sun said the spikes in constraint payments may be partly due to a lack of capacity, adding: ‘National Grid’s infrastructure should be keeping pace with the building of wind farms, but that is not necessarily the case. This can cause bottlenecks.’
A spokesman for Ofgem said: ‘We have powers to take action against licensed generators if we consider they are gaining excessive benefit when constraints occur.’
Maf Smith, of the wind industry body Renewable UK, said: ‘Wind is a flexible energy source that can be managed to fit our electricity demands by shutting down and powering up easier and quicker than other forms of energy.
‘That is partly why the National Grid calls on wind developers to constrain their power.’