Sat Dec 17, 2011, 03:02 PM
jpak (27,400 posts)
I retrieved this from the carcass of DU2....
Wind energy reduces electricity prices, says independent study
The review ‘Wind Energy and Electricity Prices’, a comprehensive assessment of studies of the impact of wind energy on electricity prices, was carried out by the independent consultancy Pöyry AS on behalf of EWEA. It brings together, for the first time, the findings of case studies in Germany, Denmark and Belgium.
The report finds that in the studies reviewed by Pöyry, electricity prices were reduced by between 3 and 23 €/MWh depending on the amount of wind power. It concludes that the studies “essentially draw similar conclusions” and that “an increased penetration of wind power reduces wholesale spot prices.”
“It has already been well-established that wind reduces CO? emissions,” said Christian Kjaer, EWEA’s Chief Executive. “But now we have stronger evidence than ever before that wind power also reduces electricity prices for consumers. The message is clear – if you want affordable CO?-free electricity, increase the amount of wind power in your electricity mix.”
Wind power replaces CO? -intensive production technologies, the report finds. The technology that sets the price on the wholesale market is usually hard coal. Wind replaces hard coal power plants during hours of low demand and gas-fired power plants during hours of high demand in all the countries the report analysed.
Wind Power in New England - Reducing Pollution from the Electricity Sector
A network of power lines, called the electricity “grid,” connects power plants with electricity users. The grid operator— the Independent System Operator (ISO) of New England—continually monitors the flow of electricity from more than 350 power plants and coordinates their output to match energy demand. Generally, ISO New England orders the power plants on the grid with the least expensive electricity to operate first to meet hourly demand. When demand increases and the most expensive plant currently operating reaches its full capacity, the next least expensive plant is turned on, and so forth. When wind energy is added to the grid, less electricity is needed from conventional power plants, so the most expensive power plant operating is turned down, or even off. As a result, the emissions associated with this plant are reduced.
Most of the time in New England, natural gas power plants are the ones turned up or down to match rising and falling energy demand. During times of peak energy use, however, especially in the winter, wind energy can displace more polluting oil-fired power plants. At periods of low electricity use, wind occasionally displaces coal power generation.
Sometimes a hydropower plant may also be displaced, which usually allows more water to be stored behind the dam for displacing fossil fuels at a later time.
Periodically, ISO New England examines the emissions associated with the power plants that are turned up and down as demand fluctuates (known as marginal emissions). Based on this emissions analysis,<1> if the region’s currently proposed wind projects are built, millions of tons of pollution could be avoided each year.
The Facts About Wind Energy and Emissions
For those who have not been following this misinformation campaign by the fossil fuel industry, here is a brief synopsis. Back in March 2010, AWEA heard public reports that the Independent Petroleum Association of Mountain States (IPAMS), a lobby group representing the oil and natural gas industry, was working on a report that would attempt to claim that adding wind energy to the grid had somehow increased power plant emissions in Colorado.
Perplexed at how anyone would attempt to make that claim, AWEA decided to take a look at the relevant data, namely the U.S. Department of Energy’s data tracking emissions from Colorado’s power plants over time. The government’s data, reproduced in the table below, show that as wind energy jumped from providing 2.5% of Colorado’s electricity in 2007 to 6.1% of the state’s electricity in 2008, carbon dioxide emissions fell by 4.4%, nitrogen oxide and sulfur dioxide emissions fell by 6%, coal use fell by 3% (571,000 tons), and electric-sector natural gas use fell by 14%. (Thorough DOE citations for each data point are listed here (PDF).) Two conclusions were apparent from looking at this data: 1. the claim the fossil fuel industry was planning to make had no basis in fact, and 2. the fossil industry was understandably frustrated that they were losing market share to wind energy.
In early April, AWEA publicly presented this government data, and when the fossil fuel lobbyists released their report later that month it was greeted with the skepticism it deserved and largely ignored. Case closed, right? We thought so, too.
After the initial release of the report fell flat, the fossil fuel industry tried again a month later. John Andrews, founder of the Independence Institute, a group that has received hundreds of thousands of dollars in funding from the fossil fuel industry, penned an opinion article in the Denver Post parroting the claims of the original report. Fortunately, Frank Prager, a vice president with Xcel Energy, the owner of the Colorado power plants in question, responded with an article entitled “Setting the record straight on wind energy” that pointed out the flaws in the fossil industry’s study and reconfirmed that wind in fact has significantly reduced fossil fuel use and emissions on their power system. Having been shot down twice, we thought that the fossil industry would surely put their report out to pasture.
Study: In Texas, wind power beats natural gas
Wind power is worth it, according to the Electric Reliability Council of Texas.
ERCOT studied the costs and benefits of wind power in three scenarios and concluded that expanding wind power in Texas would outweigh the total costs of boosting the state's electrical grid with conventional technologies. (Renewable Energy Access has a more detailed story here.)
The organization estimated the costs of putting in 5.1 gigawatts (GW), 11.6GW, and 18GW of new wind energy as well as the required grid connections. The 5.1GW plan would bring with it a $3.8 billion premium, but save $1.2 billion in fossil fuel costs a year. The 11.6GW plan would cost $4.9 billion, but save $1.7 billion in fuel costs annually. (Estimated fuel cost savings were not included for the 18GW scenario, but will be included in a future study.) Either way, both programs would pay off in about three years. Wind turbines last for decades; thus, new turbines would save billions over time as well as cut down on greenhouse gas emissions.
Wind Power Costs, Prices Dropping Worldwide
“Prices have dipped below €1m per MW for the first time since 2005, according to the latest edition of Bloomberg New Energy Finance’s Wind Turbine Price Index,” Bloomberg New Energy Finance wrote in February, 2011. For us Americans, that translates to about $1.48 million per MW.
“The cost of electricity generated from wind is now at record lows: several projects in high resource areas (US, Brazil, Sweden, Mexico) display a levelised cost of energy – excluding the impact of subsidies but after including the cost of capital and maintenance – below EUR 50/MWh ($68/MWh). This compares to current estimated average costs of $67 per MWh for coal-fired power and $56 per MWh for gas-fired power.” (In $/kWh, the figures would thus be less than $0.068/kWh for wind, $0.067/kWh for coal, and $0.056/kWh for gas-fired power.)
The Department of Energy, which seems to use this 30-year assumption, found the price of electricity from new wind farm plants ranged from 4 to 9 cents per kilowatt-hour in 2009, which is competitive with other new power plants and essentially the same as AWEA reported above. However, if a 30- or 40-year lifespan were used for the projects, the costs would be much lower, as the huge majority of a wind project’s costs are from the initial investment (wind, the ‘fuel’, is free and there are minimal operating and maintenance costs).
Wind is MUCH Cheaper than Coal & Natural Gas (if You Know How to Add)
Now, as I hinted at the top, if you take the full health costs and environmental costs of various energy sources into account, wind comes out looking even better. A recent study out of Harvard found that if one adds in the hidden costs of coal then its actual price in the U.S. is more like 9-27 cents higher per kilowatt hour. The authors write:
Blustery States Boost Wind Power Over Gas With U.S. Tax Break
A U.S. tax break has helped wind power stem the growth of natural gas as a power-plant fuel in blustery states.
The natural-gas share of electricity generation increased by less than 1 percent over the past decade in states such as North Dakota that have strong winds to drive turbines, a Bloomberg Government Study found. It grew 17 percent in states such as Florida, where there was no wind to compete with gas.
A production tax credit valued at 2.2 cents for every kilowatt-hour of wind energy has encouraged the growth of the alternative energy source. Natural gas accounted for 16 percent of U.S. electricity generation in 2000 and grew to 24 percent in 2010, according to the study.
“With the benefit of the federal and state subsidies, wind-generated electricity has tended to push out the more expensive sources of electricity generation,” Paul Hughes, a senior economic analyst for Bloomberg Government, wrote in the study. “In many cases that displaced energy has been generated from natural gas.”
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