Daniel Englander
Gridding for Battle March 6, 2008 at 12:12 PM
If a wind turbine explodes in the woods and no one’s around to smooth the load, do utility customers get pissed off? Last year, U.S. wind grew by about 45 percent, adding 5,244 MW on $9 billion overall investment. In wind-leading Texas, however, grid operators are beginning to feel the negative effects of the wind boom. From today’s Wall Street Journal:
“A cold front blew through West Texas on Feb. 26, temporarily lifting wind production. When it subsided, wind speeds dropped, turbines slowed and productivity dropped by 80% to 300 megawatts from about 1,700.”
Without grid-level storage or next-gen, high efficiency transmission to smooth loads, adding intermittent or non-dispatchable capacity will eventually cause enough headaches and price fluctuations that people lose interest. But we already knew this, right? So, until the babassu-powered economy gets off the ground, what’s a utility to do?
Utility investment in grid infrastructure is embarrassingly low. Since rate making mechanisms place a premium on generation and commodity sales, utilities typically under invest in infrastructure because such investments cut into their revenue stream. In the past this wasn’t a problem because generation sources - coal, natural gas, hydro, and nuclear - could be sited near high demand areas and cash outlays for high efficiency wires weren’t necessary. Transmission distances were short and efficiency losses could me made up by generating and selling more electricity, which built up revenue to above-bar rates of return.
However, unlike traditional power generation sources, centralized wind and solar plants need to be located in areas with a high resource density - deserts, mountain passes, and offshore. The future energy mix will be made up of a number of different power generation sources. Linking these sources together is necessary both to make up for the lower reliance on big capacity fossil fuel plants and to make pricing on these new plants economical. One mixed solar and wind project in central California’s Tehachapi Mountains will rely on a new $1.8 billion transmission investment to distribute electricity to the northern and southern parts of the state.
Ultimately, project developers will need to start building in the cost of transmission infrastructure into their cost outlays. As more capacity comes online, the effects of intermittent generation will compound, driving up wholesale power prices for utilities and LCOEs for consumers. This happened in Texas last week, where high demand and low capacity drove wholesale prices to $1,055/MWh in West Texas while prices remained around $299/MWh in the rest of the state. If an adequate transmission infrastructure had been built before the wind capacity, power from high wind areas could have been transferred to West Texas.
One solution here is to stop blowing (get it?) federal money on the renewable fuels mandate, and transfer that funding to building up the grid. It’s a necessary step in building a green energy economy. Otherwise, our renewable energy future will resemble the palsied and confused as the dancer in this video.
