With temperatures plunging again, the wind industry’s trade group said last year’s “polar vortex” was tempered for consumers by the availability of wind energy.
The American Wind Energy Association said its analysis shows electricity consumers saved $1 billion when utilities shifted to wind power as natural gas spot prices escalated during a cold snap in January 2014.
During the polar vortex, extreme cold weather conditions were felt farther south, with temperatures in some places plunging more than 30 degrees below normal. The colder weather prompted record winter demand for electricity and natural gas as customers turned up their heaters.
“In many regions of the country, wind power made a critical contribution to keeping the lights on and also keeping power prices low,” said Michael Goggin, research director for the association.
Goggin’s analysis looked at which power plants were used and fuel prices during the Jan. 6-7, 2014, polar vortex. In most circumstances, grid operators are required to run the lowest-cost generation first.
The analysis focused on a region that includes 60 million customers in the Mid-Atlantic and Great Lakes areas. Wind power utilized during the 2014 polar vortex saved customers there about $1 billion, or 27 percent, from the estimated wholesale fuel sales in that period.
“The fuel cost is always free, and you can guarantee that for the life of the project,” Goggin said.
As utilities used wind instead of natural gas generation, it also freed up some natural gas supplies for home heating, Goggin said.
The association said its estimates were conservative because they didn’t look at how wind helped keep natural gas price spikes in check.
The Oklahoma Property Rights Association, which has opposed some wind farm projects in the state, said the wind association report on savings doesn’t take into account federal and state incentives used to build wind farms.
Subsidies lower prices
“The price of wind-generated electricity is subsidized by federal and state production tax subsidies that artificially lower the price of the electricity,” the property rights association’s Rick Mosier said in a statement. “Without the enormous wind power subsidies, Oklahomans would pay lower taxes and government would still have additional money to spend on education and other essential services.”
The wind association said incentives don’t affect electricity market prices, whose main fluctuations come from changes in fuel costs or transmission issues.
Displaces costly fuels
“Wind’s true market impact is competing with and displacing more expensive forms of energy,” the association said. “This market-driven impact occurs for all low fuel cost sources of energy, including nuclear.”
A September report for the North American Electric Reliability Corp. (NERC) on the 2014 polar vortex said more than 35,000 megawatts of generation was knocked offline by either fuel-supply issues or frozen equipment. Natural gas fueled 55 percent of the generation outages, followed by coal at 26 percent.
“Increased reliance on natural gas during the polar vortex exposed the industry to various challenges with fuel supply and delivery,” the NERC report said. “This increased reliance, compounded by generation outages during the extreme conditions, increased the risks to the reliable operation of the BPS (bulk-power system).”
The report on the utility industry’s response showed the Southwest Power Pool among the least affected regions. The pool covers Oklahoma and parts of eight other states.
“Excluding Florida, SPP (Southwest Power Pool) experienced the lowest number of cold-impacted outages, despite being one of the first areas impacted by the polar vortex,” the report said.
Meanwhile, this week’s falling temperatures and high winds led to record amounts of wind power generation in several regions of the country, the wind association said.
Wind supplied more than 7,600 megawatts of electricity to the Southwest Power Pool early Wednesday, surpassing the previous record of 7,200 megawatts set in March.