The “hidden cost” of wind power – less than conventional power plants

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The American Wind Energy Association has just come out with some facts and figures about the so-called hidden cost of wind power. That cost has been touted by the fossil fuel industry as an argument against integrating more wind power into the grid, but according to AWEA’s calculations the “hidden cost” for conventional power plants in Texas is 17 times more than wind.

So…what does the fossil fuel industry have to say about that?


Image (cropped) by Images of Money.

Contingency Reserves And The Hidden Cost Of Wind Power

AWEA’s “hidden costs of wind power” calculations apply to the cost of contingency reserves needed in case of power plant failure.

According to AWEA’s calculations, a typical Texas household with a monthly electricity bill of $128 per month would be shelling out 4.3 cents per month for the additional contingency reserves required by wind power.

Those same contingency costs also apply to conventional power plants, as AWEA underscores by providing the example of Texas grid operator ERCOT. The ERCOT grid requires 2800 megawatts of fast-acting contingency reserves to kick in, in case of a conventional power plant failure.

Those costs, according to AWEA, come to 76 cents per month for a typical Texas household.

Assuming AWEA’s figures are on point, contingency reserves are far more expensive for conventional power plants than for wind. The figure of 17 times more might actually be understating the case in favor of wind, since AWEA has some additional statistics in its pocket that indicate a figure of more than 20 times.

When you look at individual households, neither 4.3 cents nor 76 cents monthly seems particularly onerous. However, if you add up the total economic costs across all consumers and figure in higher expenses for non-residential customers that’s a significant drag, especially for conventional power.

The 800-Pound Gorilla In The Room

Now, here’s where it gets interesting. In order to make the case that wind energy is more expensive to integrate into the grid, the fossil fuel industry has been ignoring the cost of integrating conventional power plants.

Instead, the industry prefers to talk about something else entirely, the cost of building new transmission lines for wind power.

In Texas the transmission line angle is an especially big deal because of the new billion-dollar CREZ wind power transmission project. Designed to funnel Texas’s vast wind power potential from thinly populated parts of the state into the urban centers, CREZ has put Texas’s wind industry on a collision course with fossil fuels.

Other high-profile wind power transmission projects in the works are Kansas’s Grain Belt Express, and a network of transmission lines to tap into Atlantic Coast offshore wind power.

“Hidden Cost Of Wind Power”

As described by Michael Goggin of AWEA, that focus on transmission lines bubbled to the surface in last Thursday’s House Subcommittee on Energy and Power hearing, as well as a hearing last year (break added):

Tom Tanton, who is affiliated with fossil fuel industry-funded groups, gave Congressional testimony attacking wind energy for its “hidden costs,” referring primarily to integration costs. Yet he was completely silent about the far larger integration costs associated with other energy sources.

Similarly, Jonathan Lesser, who works as a consultant for competing energy sources, last year gave Congressional testimony attacking wind energy for its integration costs. When asked in a direct written question from a Congressman about the integration cost of conventional power plants, he attempted to dodge the question by wrongly interpreting “integration costs” to mean transmission costs, and only answering that question.

Take a look at Mr. Tanton’s written “hidden costs of wind power” testimony and you’ll find a similar dance around the topic of conventional power grid integration:

However, wind generated electricity is of much less value to the grid, as it provides energy but no capacity, and thus requires so called backup. Further, because it is highly volatile, it also requires balancing to keep the grid in operational balance between instantaneous demand and supply.

Tanton doesn’t seem to be a particularly big fan of the production tax credit for wind power, either. Here’s one snippet:

The Production Tax Credit has led to building of enormous amounts of variable and volatile electrical generation threatening State reliability of the electrical grid.

I guess if you repeat “volatile” often enough it starts to sound downright scary and bad. We prefer the term intermittent and there are already a number of solutions for that, including utility scale energy storage.

For example, Texas happens to be home of the largest wind-centric energy storage facility in the US, and the Obama Administration has just signed up three Washington State utilities in a $14 million demo of wind integration. The energy storage component of the demo includes flow batteries as well as lithium-ion batteries.

As for using scarybad words like “volatile,” it’s not surprise to do a little digging into the Tanton affiliates mentioned by Goggin and come up with the Tea Partyesque same of The American Tradition Institute.

ATI is the former name of the much more intelligent sounding Energy & Environment Legal Institute, and for those of you tracking the anti-wind activities of the Koch brothers, yes, there has been a Koch connection with ATI/E&E.

Tanton is referred to as the organization’s Director of Science and Technology Assessment.

ATI/E&E is already notorious for a 2012 memo exposed in The Guardian, which outlines the organization’s plans for creating a grassroots anti-wind campaign:

The intent is to target the identified audiences with consistent messaging…In addition to have the appropriate message, it needs to be communicated optimally. We need to study and apply good communication skills.

Weren’t we just saying that if you repeat something often enough it begins to sound scary and bad? So, let’s give Tanton his Brownie points for sticking with the strategy.

 Source: CleanTechnica. Reproduced with permission.  

  • In a quick review of the following page
    (linked in the article above) it appears that the AWEA is comparing the following “apples and oranges”:

    1) The amount of fast-response reserve (similar to FCAS in the Australian NEM) the market operator needs to hold to cater for unexpected events as:
    (a) Generators tripping (whether it be thermal, or renewable)
    (b) Large loads tripping
    (c) Sections of the transmission tripping – hence disconnecting generation, or load, or both.

    2) My understanding is that this is not quite the same as the argument being made by some with respect to the amount of capacity that needs to remain installed, waiting for the need to supply when intermittent resources cannot generate. In markets where there are capacity payments (the NEM and Texas are not amongst them) perhaps the cost of this could be seen in the amount paid for capacity each year?