Archive for the ‘Wind Power’ Category
July 3rd, 2010 | 
Author:
Ed DeMeo, Renewable Energy Consulting Services, Inc.
Wind power plants generate electricity when the wind is blowing, and the plant output depends substantially on the strength of the wind. Because the wind cannot be accurately predicted over daily periods and it often fluctuates from minute to minute and hour to hour, electric utility system planners and operators are concerned that wind plant variations may increase the operating costs of the system as a whole. This concern arises because the system must maintain an instantaneous balance at all times between the aggregate demand for electric power and the total power generated by all power plants feeding into the system. Utility operators and automatic controls perform this highly sophisticated task routinely—based on well-known operating characteristics for conventional power plants and a great deal of experience accumulated over many years.
Wind Power Impacts on Operating Costs
System operators are concerned that variations in wind plant output will force the conventional power plants to provide compensating variations to maintain system balance, thus causing the conventional power plants to deviate from operating points that are chosen to minimize the total cost of operating the entire system. The concern is certainly valid. The question is: To what extent does the variability of the wind increase operating costs? The operators’ concerns are compounded by the fact that conventional power plants are generally under their control, whereas they have no control over wind plants because they are controlled by nature. Another concern expressed by utility operators who are unfamiliar with wind plant operating characteristics is that the output of a wind plant will change from full power—say 100 MW—to zero in one second or less, causing a huge transient impact on the system. Practical experience with many wind plants has alleviated this concern. Wind plant output does not change that rapidly. Even a single wind turbine has sufficient mechanical inertia to damp rapid changes in the wind. More important, a wind plant generally consists of a number of turbines, and the spatial variations in the wind over the area of a typical plant are sufficient so that variations in output from the entire plant are much less pronounced than those from a single turbine. Hence, the plant output shows substantial smoothing relative to output from a single turbine. Consequently, wind plants have no adverse impact on the power system’s stability. System stability can be upset by abrupt events that happen within a fraction of a second, such as a sudden outage of a major power plant, loss of a transmission line, or abrupt connection of a large electrical load like an arc furnace in a steel mill. Abrupt events such as these do not occur with a wind plant unless its connection to the electrical grid suffers a fault. In such a case, the wind plant is similar to a conventional power plant. Impacts in the time frame from a few seconds to a few days can be significant, however. Utility operators tend to address the system-balance issue in the following different approximate time frames:
- • Regulation: one second to a few minutes
- • Load following: a few minutes to a few hours
- • Scheduling and commitment of generating units: a few hours to a few days.
Regulation
Customers are continually turning appliances, production processing equipment, and other electrical loads on and off. Consequently, the system constantly experiences random variations. These are routinely handled without difficulty by the system through generating units that are assigned this function. Operating these plants in the regulating mode incurs costs to the system. Wind plants add to these variations, but in a random and uncorrelated manner. In principle, they will add to the regulating burden and hence to the cost of regulation. To date, however, studies with wind plant penetrations in the range of 5% to 20% of system load estimate this cost impact to be minimal to negligible.
Load Following
Aggregate utility loads generally follow fairly predictable daily and weekly patterns. For example, loads will increase in the morning hours as people wake up, businesses begin their operations, and manufacturing processes ramp up. Conversely, loads will drop off later in the day. These variations are handled by load-following generating units that are ramped up and down by system operators or by automatic equipment. The presence of wind power in the generating mix will generally increase the requirement for load-following generation because the behavior of the wind over a several hour period is generally not as predictable as customer load patterns. This increase results in increased operating costs. However, studies to date suggest that for low to medium wind penetrations (up to about 5% of system load), the resulting cost impact is on the order of 0.05 cents/kWh of wind energy.
Scheduling and Commitment
Large thermal power plants generally require lead times of several hours to as much as a day to reach system service readiness. Consequently, operators need to make decisions about plant operations hours before the plants will be needed. Plants that are already warm or can be started quickly need to be scheduled. Those that have not been brought up to operating temperatures need to be committed. These decisions will be affected by assumptions made about wind plant operation. If the wind could be forecast accurately, reliable assumptions would be possible. However, even with perfect forecasting, variations in wind plant output would necessitate more variations in conventional plant output than would be needed if the wind plant outputs were steady. These additional variations imply additional costs because the conventional plants would be operated more often under non optimum conditions and because maintenance costs are likely to increase. However, those knowledgeable in power plant operations feel such additional costs would be small compared to those resulting from imperfect wind forecasting. For example, suppose a thermal plant has been fired up to serve expected load during the next day because no wind is expected. If the wind actually blows the next day, then the additional thermal plant is not needed and the cost associated with firing it up were unnecessary. Conversely, a decision to rely on wind power that does not materialize causes extra expense to obtain makeup power—often from spot markets at high costs. Today, wind forecasts are generally accurate for about half an hour up to one or perhaps two hours. Although the ability to forecast is improving, accuracy over periods of a day or two is not likely in the foreseeable future. Several preliminary studies of forecasting-error impacts have been conducted. These suggest that, for wind penetrations of 5% to as much as 20%, the operating-cost impacts of “bad” decisions caused by errors in forecasts are in the range of 0.15 cents to 0.5 cents per kWh of wind-generated electricity. These studies have incorporated several conservative assumptions, so the impacts may actually be overstated.
Conclusion
Results to date, coupled with actual experience from operating wind plants, suggest that system operating-cost impacts are not a showstopper for wind. To strengthen this conclusion, and to determine conditions under which it may not apply, additional studies are needed. These studies should examine such effects as (a) different mixes of conventional generation; (b) a range of wind penetrations; (c) a sliding scale of forecasting accuracy (i.e., very accurate for an hour or two, and decreasing in accuracy out to 48 hours); and (d) differing assumptions on the purchase of makeup energy and the sale of excess energy.
Posted in 
Ed Holt, Energy Smart Consulting
Although the scope varies from state to state, utility regulation generally encompasses review of utility load forecasts, certificates of need for new generation facilities, resource planning and acquisition (including power purchase agreements as well as build to own), transmission and distribution planning, rate cases (cost of service studies and cost allocation to different rate classes), utility rate design, and fuel cost adjustments. Many states that regulate investor-owned utilities are guided by integrated resource planning (IRP) requirements.
Integrated Resource Planning
Although IRP is frequently thought of in the context of long term resource planning, it can also be used as a framework for utility planning and regulation. This planning process can be used to identify the lowest practical cost at which a utility can deliver reliable energy services to its customers, taking into account demand-side and supply-side resources, portfolio diversity and risk management, and environmental costs and benefits.
Analyzing avoided cost provides the common economic framework for comparing disparate resources such as base load plants, peaking plants, intermittent resources like wind, and demand-side resources. Avoided cost analysis provides the means to compare the costs of alternative energy resources and decide which are cost effective and which are not, but it is commonly misunderstood. Avoided cost is what a resource is worth to a utility, or the most a utility should be willing to pay for it. To figure this out, a utility should look at the specific operating characteristics of the resource under consideration and compare it to existing or planned resources that it would displace. A resource that provides electricity at a cost lower than its avoided cost is cost effective and worth acquiring.
Public Participation
From a process standpoint, IRP gives interested parties an opportunity to participate through a regulatory proceeding. By helping to investigate the range of analysis and resources under consideration, wind advocates can ask questions and propose alternatives for consideration. Participating in the regulatory process can be time consuming, but at a minimum, stakeholders can review and comment on draft IRPs.
IRP in Restructured Markets
In theory, competitive markets add energy resources to the electric system in response to price signals. In practice, markets are imperfect and frequently ignore non-traditional alternatives. If capital cost is the primary consideration, for example, generation developers may flock to combined-cycle natural gas plants. Without a broader framework in which energy investment decisions are made, the market will exclude non-monetized values such as environmental costs and benefits, demand-side and renewable energy resources, portfolio diversity, and the value of distributed resources. Portfolio management is a new term being discussed by regulators for restructured states. Like IRP, portfolio management allows the economic comparison of resources with very different characteristics, but the responsibilities for implementation and opportunities for public participation may be different. First, someone with a public interest in the entire market and grid should take responsibility for long-term strategic oversight.
This often falls to a state government agency, but it may be shared with regional transmission organizations. The portfolio architecture established by these actors would broadly include things such as grid interconnection standards, transmission policies affecting access and pricing, and the public interest in environmental values associated with renewable energy and energy efficiency. Second, a provision must be made for customers who don’t actively choose a supplier, through what is called default generation supply. The default supply provider may be the distribution utility, or it may be selected through a competitive bid process. In either case, regulators will determine the factors to consider in default supply. Finally, the agency responsible for portfolio management should use the planning process to inform and coordinate the various participants in restructured markets. Periodic review by regulators can provide additional opportunity for public review and comment.
Ed DeMeo, RECS, Inc.
Brian Parsons, National Renewable Energy Laboratory
Presented May 22, 2003, to the All States Wind Summit, Austin, Texas
1. Wind plants are controlled by nature and not by utility operators. Hence they can’t be relied on; 100% backup from dispatchable generation is required.
Responses:
True, wind plants are not dispatchable in the conventional sense. However, electricity demand is also not controlled by utility operators. The utility system is designed to accommodate fluctuating loads, and additional incremental variability imposed by adding amounts of wind up to at least 10% to 15% of system generating capacity is small and has not been costly – as discussed further in the next item.
No power plant is 100% reliable. During an outage, backup is provided by the entire interconnected utility system. The system operating strategy strives to make best use of all elements of the overall system, taking into account the operating characteristics of each generating unit and planning for contingencies such as plant or transmission line outages. Wind’s need for support of this type from the rest of the system will differ in degree from that required by conventional plants, but not in kind. Wind simply needs to be integrated into the overall system operating strategy.
Wind’s ability to support growth in utility loads will in general be less as a percentage of nameplate rating than that of conventional dispatchable plants. All power plants can be characterized by an effective load carrying capability that is a fraction of the rated power output. Its magnitude depends on a statistical evaluation of contributions made by the plant to overall system needs during the entire year. Contributions during periods of high system load are most important. In general, the fraction for typical fossil-fueled plants ranges from about 70% to about 90%. For a wind plant, the range is typically 20% to 40%. Hence a wind plant generally can’t be relied on to serve as much load growth as a conventional plant of the same rating, but its effective load carrying capability is not negligible. Historically the Mid-Continent Area Power Pool and recently The PJM RTO have recognized this in their system reliability calculations and rules by incorporating a simplified, historic performance- based calculation to assign reliability ratings to wind power plants.
Many wind plants are being installed to reduce fuel consumption by and emissions from conventional power plants. In fact, this is the primary value of wind power today. When the wind blows, the conventional plants can be turned down, thus reducing fuel combustion and emissions. In these cases, wind is only providing energy, so the issue of load carrying capability is moot. The existing conventional plants provide system reliability, and there is no cost associated with additional backup for system reliability. The only incremental costs are those associated with minute-to-minute and day-to-day operation, generally referred to as ancillary services costs.
2. Since wind is not dispatchable, the ancillary services required to accommodate its variability will make wind energy uneconomical.
Responses:
Wind’s variability does increase the day-to-day and minute-to-minute operating costs of a utility system because the wind variations do affect the operation of other plants. But investigations by utility engineers show these costs to be relatively small – less than about 2 mills/kWh at penetrations under 5%, and possibly rising to 5 mills at 20% penetration.
The biggest “reserve” in the integrated utility system is called first contingency or n-1 reserve. The grid is designed to withstand the loss of the single largest element (big generator or transmission line tripping off). Until a single wind plant approaches the level of the first contingency loss, incremental operating costs are likely to increase only slowly as wind penetration increases.
3. If wind energy displaces energy from existing coal plants, then rates will go up.
Responses:
Rates for electricity from wind plants being installed today are comparable to wholesale electric power prices of 2.0 to 3.0¢/kWh. Estimates for energy from a new wind plant slated for North Dakota are below 2.5¢/kWh. The incremental cost of wind power, if any, will be negligible when distributed among all customers. Several studies looking at the rate impacts of wind have considered the costs of various renewable portfolio standard percentages from 5% to 10%, and average residential bill impacts are predicted at 5-25¢/month. In fact, some studies predict the accompanying decrease in demand for conventional fuels will reduce fuel prices enough to fully compensate for slightly higher costs for renewables. Many of these studies are several years old, and wind plants continue to be installed at lower and lower prices, so any price increment derived by assuming low (and stable) conventional fuel prices is shrinking.
4. Yes, but wind needs a production tax credit (PTC) of 1.8¢/kWh over 10
years (about a penny over 30 years) to achieve these economics.
Responses:
That’s true, but the tax credit for wind only compensates for subsidies provided for conventional energy technologies that are paid in our tax and health-care bills – not in our energy bills. These hidden costs have been estimated at levels comparable to the value of the PTC.
Examples: public-health costs for treatment of respiratory diseases; nuclear accident liability limitation; nuclear waste management; oil and gas depletion allowances; maintenance of oil access by the USDOD.
5. New natural gas power plants will provide cheaper energy than wind plants.
Responses:
This is not likely at today’s gas prices, and these prices are rising with time. At $3/MBTU, the fuel cost alone is 2.5 to 3¢/kWh, and capital and O&M costs add a comparable amount. And gas prices have spiked to over $10/MBTU in the past three years. Betting on low gas prices over the foreseeable future is highly risky, while energy costs from wind plants will be relatively stable over time.
Gas price volatility is not going away. Planned power plant construction countrywide is nearly 100% gas fired and the success of these plans is heavily dependent on natural gas production meeting growing demand. The economics of these plants are based on low gas prices into the future. Witness the CA power crisis and the impact of price volatility on the general health of our economy.
6. The production tax credit and accelerated depreciation are helpful only to big, out-of-state developers. The economic benefits aren’t local, and rural electric cooperatives and municipal utilities can’t receive the same benefits.
Responses:
It’s true that only entities that pay federal taxes can use the tax credits to reduce their tax liability. But those tax credits result in lower wind energy costs for the benefit of all electricity customers. However, if local entities assume equity positions in wind plants, then they can receive the taxcredit benefits. Whether or not the wind-plant equity is locally held, wind plants result in jobs for the local community and the need for local services—both during construction and during operation. And to the extent debt financing comes from local sources, debt-service payments stay within the local community.
In some cases, a number of farmers have joined together in a cooperative arrangement to build and own a wind plant. In aggregate, they can have enough tax liability to make full use of the tax credits.
In other cases, an external entity with a tax appetite can hold majority ownership – even as much as 99% – for 10 years while the tax credits apply, with the remainder of ownership vested in the cooperative. After the initial 10-year period, the ownership portions can be shifted so that the cooperative becomes the majority owner. In this way, the cooperative is the major owner in the long run, the external entity gets its return on investment over 10 years with the aid of the tax credits, and the overall cost of energy from the plant over its operating lifetime is lower than it would have been if the cooperative were the sole owner.
7. In many rural areas, local load growth is small, so export of wind energy is the only option. But often no transmission capacity is available.
Responses:
It’s true that transmission availability is often the major factor limiting wind development. However, a community wishing to do so could provide a substantial portion of its local energy needs from wind and then cut back on imports from the transmission and distribution grid. In some cases, this would violate terms of the contract with the wholesale supplier, but in other cases it would not.
The transmission problem is often driven by historic methods of evaluating and allocating the power-carrying capability of the wires. Historic use rights are often fully committed in an administrative sense. Electrically, there is often actual capability that goes unused much of the year. Changes in evaluation and allocation rules associated with transmission reform are expected to allow further generation expansion without requiring additional wires.
8. Large, utility-grade wind turbines can’t be installed on the distribution grid
without expensive upgrades and power-quality issues.
Response:
In situations with weak distribution grids (long lines with thin wires and few customers—maybe even single-phase), this is often true. However, in many cases, wind generation can be connected to the distribution system in amounts up to about the rating of the nearest substation transformer. One study of a rural mid-western county estimated that several tens of MW of turbines could be installed on the local distribution grid with a minimum of upgrade expense and minimal power-quality impacts.
9. All-source requirements imposed by the regional G&T wholesaler preclude wind installations by distribution co-ops.
Responses:
In some cases, this is true without modification of current contracts. Sometimes an exception can be granted, and G&T’s can be responsive to the distribution co-op’s desires. After all, the distribution co-ops are their customers and often part owners as well.
Some G&T’s (e.g., Tri-State and BPA) allow distribution co-ops to generate a portion of their electricity locally from renewables without penalty. However, rules for backup energy in the event the local generator doesn’t deliver may need to be modified to avoid substantial demand charges.
In most cases, the major barrier to wind plant additions by a distribution co-op is the absence of experience with generation of any kind.
10. Small projects that might be suitable for co-ops or small municipal utilities are uneconomic.
Responses:
Small projects generally have a higher cost per MW than larger wind plants. However, the incremental costs on customers’ bills are likely to be small. The energy premium for a small project is unlikely to exceed 50%. If the project provides a small portion of the community’s needs—say 2%—then the premium is reduced to about 1% if distributed among all customers. Most folks don’t lose sleep over a 1% impact.
The real value of small projects stems from utilities and communities obtaining experience with and learning about the technology and its positive environmental and economic impacts.
Some communities have succeeded in covering the premiums for energy from a small project by offering a green-priced product to their ratepayers or green tags to a broader customer base.
11. Wind turbines kill birds and thus have serious environmental impacts.
Responses:
Bird kills have caused serious concern at only one location in the U.S.: Altamont Pass in California. This is one of the first areas in the country to see significant wind development. Over the past decade, the wind community has learned a great deal about siting wind plants in ways that avoid locations that might pose problems for birds. Modern wind installations are simply not raising avian concerns.
One to two bird kills per turbine per year is at the high end of the range observed in U.S. wind installations. The majority of deaths are common species. Compared to bird deaths resulting from other manmade structures, highway traffic, and housecats, bird kills by wind plants are numerically insignificant and are not expected to impact bird populations. Of course, deaths of endangered species are of greater concern, but again the only location with a suggestion of this problem is Altamont. And even in that case, experts disagree on the severity of the problem.
Environmental impacts are relative. All energy technologies have some negative environmental impacts. Society makes tradeoffs when making power plant choices. Wind plants may result in some bird fatalities or other unwanted impacts on wildlife and their habitats. Coal plants cause premature human deaths from respiratory problems. Maintaining open channels for free flow of oil causes military deaths. Society needs to choose from these alternatives, and it cannot assess a single energy technology in isolation.
12. Many people say they’d be willing to pay more for clean, renewable energy, but when the time comes to sign up for a green product, only a few actually do this.
Responses:
Green pricing is a relatively new thing, and early customer percentages are not out of line with new offerings of other products. Successful green pricing programs demonstrate concrete actions—not just vague promises—and seek a minimal premium. If folks are asked to pay too much—say, a premium of 50% or 100%—then unless they are fanatical supporters of clean energy, they shy away because they know that the clean energy benefits will be shared by all—even the free riders. Also, people in general need multiple exposures to something new before they decide to buy.
Willingness to pay doesn’t necessarily mean costs should be covered through a green-priced product offering. If most people in a community say they’d be willing to pay a premium for clean energy, then the justification exists for a rate-based project whose premium, if any, would be shared by all. In most cases, the premium would be truly negligible. In this case, there is no need to conduct the effort or incur the marketing costs associated with a green pricing program.
The search for new and innovative ways for sustainable energy has reached its peak in our society. People are looking for alternative ways to counter the depletion of our natural resources and at the same time find ways to eliminate or avoid high cost energy and pollution. Aside from solar power and hydropower, lately, a great deal of attention has been directed utilize the power of the wind. It seems that the answers to these new age problems may after all lie behind it and these old contractions we call wind turbines.
How It All Started
Contrary to what most people know, wind machines have been in existent for as early as 200 B.C. in Persia. In those times, these contractions served the purpose of simple tasks like grinding corn and even drawing up water from rivers and lakes. Although it was not till 1887 that scientists started using windmills to produce electricity. The year after that, the first windmill producing electricity in the United States was born. And in 1908, electric generators with powers up to 25kW were already in production. It took a total of 75 windmills working together in order to produce the electricity needed to jolt up that many kilowatts. And by 1931, the modern wind generators were in full service in the USSR. A few more years after saw the birth of the first utility grid-connected wind turbine in the UK.
The Benefits
Wind powered turbines, compared to other source of energy, is clean. It does not produce any carbon dioxide as emissions or any other waste products. Not only is it making the world cleaner, it also slows down climate change. It is renewable therefore making it low cost and reduces or completely gets rid off electricity bills. Since wind power is free and its supply is practically infinite, therefore it costs less to put up and maintain. It also is very useful in times when electricity is very much needed since it maximum production occurs in windy and cold winter days.
Some Fun Facts
* Did you know that wind power is actually another form of solar energy? Wind patterns and strength are dictated by the heat of the sun.
* Some wind turbine blades actually reach the size of a football field.
* The top three countries in terms of wind power capacity are the U.S., Germany and Spain.
* A single wind turbine can actually power around 250 homes.
As world grows, so does the need for energy. Since its invention, more and more countries are looking into the benefits of wind turbines and how it could affect the growing need of its people. It seems that the future of renewable energy might just be blowing in the wind.
About the Author:
Arthur Markham is an environmentalist and a wind turbine enthusiast. His current home is powered by both solar and wind powered generators.