Fact Check: Wind Power and Natural Gas

In an article published Thursday, Edgar Gaertner of the Wall Street Journal, regrettably, gets it wrong with respect to wind power and its ability to reduce the use of natural gas in Europe (which depends heavily on Russia for natural gas supplies). According to Gaertner:

Wind turbines generate electricity very irregularly, because the wind itself is inconsistent. Therefore wind turbines always need backup power from fossil fuels to keep the electricity grid in balance."

This is incorrect. Customer demand for electricity varies throughout the day, just as wind does, and wind adds little variability to a utility system. Other power sources are needed not to "back up" wind, but to meet peak demand.

Gaertner goes on to note that gas-fired power plants are ideally suited to match up with wind, because their output is very flexible (true) and ascribes increasing use of gas in Spain and Germany to those countries' growing use of wind (probably not true). Here's one reason gas consumption is increasing in Germany:

...Greens and even parts of the governing Christian and Social Democratic parties are fervently opposed to the construction of new coal plants.

The U.S. Department of Energy has found that wind can generate 20% of U.S. electricity by 2030. In the process, it would reduce the use of natural gas for electricity generation by 50%, even though an additional 90,000 megawatts (MW) of gas generating capacity would be needed. Why is this? It's because even though there would be more gas plants, they would run much less and use much less fuel. Mr. Gaertner's commentary, therefore, misses the mark.

Utilities are building wind today because it provides them with zero-cost energy. It is primarily an energy resource, not a capacity resource. Society today faces three major issues: rising electricity demand, high (and volatile) fuel prices and global warming. Fuel prices and global warming have nothing to do with capacity, but rather with fuel consumption.

Regards,
Tom

Using Wind as a Fuel Price Hedge

Yesterday saw a very strong recognition of wind power's ability to protect against volatile natural gas prices, as European financial giant Fortis agreed to buy 1.1 billion kilowatt-hours of wind-generated electricity over the next 10 years from a 63-megawatt (MW) wind farm in Texas that is owned by Enel North America, a subsidiary of a major Italian utility. According to the Wall Street Journal blog, Fortis will sell portions of the hedge to power and financial companies.

Regards,
Tom

Costs of a Renewable Portfolio Standard?

Marlo Lewis of the Competitive Enterprise Institute complains that the Energy Information Administration has found that the Bingaman Renewable Portfolio Standard (RPS) would cost consumers a net of $18 billion through the year 2030.

It should be noted that a similar analysis in March by Wood Mackenzie, a respected oil & gas research firm, found that the same RPS provision would save consumers more than $100 billion through 2026. From the Wood Mackenzie press release:

According to the report, the adoption of a 15% Federal RPS will require a flood of new wind and other renewable projects well beyond current proposed projects, leading to a 500-percent increase in renewable capacity from current levels by 2026. This increase translates into an incremental construction cost of $134 billion (2006 dollars) between 2006 and 2026. The report also shows the switch to renewable energy will drive down demand and price of natural gas. "The lower fuel costs and fossil fuel consumption will lead to lower electricity costs," continued Sannicandro. "Over the next 20 years, the Federal RPS case leads to a savings of $240 billion (2006 dollars) in wholesale power costs, outweighing the higher capital investment to build the additional capacity."

Regards,
Tom

Natural Gas Prices Drift Higher; More Wind Needed

USA Today reports today that natural gas prices are edging higher:

The cost at the pump isn't the only high gas price nowadays.

Sparked by worries about hot weather and a busy hurricane season, natural gas prices have jumped in the last week to the highest since December. Tuesday, the price for natural gas trading in New York for delivery in July closed at $8.064 per million British thermal units. Although that was slightly lower than the previous day's close, it was 25% above the price seen a year ago.

For consumers, the higher natural gas prices mean heating costs could be elevated this winter for the most popular heating source in the USA if the gains hold. Increased natural gas prices also could lead to higher electricity costs later this summer to power air conditioners, because a large amount of electricity is generated with natural gas.

Generating electricity with wind power helps to conserve natural gas and also exerts some downward pressure on natural gas prices, according to the American Wind Energy Association. Natural gas generators can be "turned up and down" rapidly, one of the primary way utilities cope with varying customer electricity demand throughout the day, and so they are also the easiest to adjust when clean wind power is being delivered to the utility system. Also, the oldest and dirtiest gas generators are usually the most expensive to run, and the first to be turned down or off when wind power is being produced.

Regards,
Tom

Delaware 'Sinking' About Wind?

Slacktivist points out that concern about global warming may be a factor in Delaware citizens' enthusiasm for a proposed offshore wind power plant. Why? Well, you can check his map yourself, but it looks as though about 1/3 of the state would be submerged by a 14-meter sea level rise (admittedly still a fairly remote scenario).

Slacktivist also discusses the wind development situation in Vermont, a state where I live and in which, in my opinion, the public debate has been dominated by a relatively well-to-do group of anti-wind folks who have done an excellent job of sowing confusion and mistrust. There are still a couple of proposed wind projects making their way through the permitting pipeline and we may yet see them built. Wind remains a good idea for New England, despite all of the misinformation, because of its ability to save natural gas. For more on why, see A Night to Remember, a case study with some zing from Citizens for Pennsylvania's Future (PennFuture).

Regards,
Tom