Sharp increases in windpower output on the Pacific Northwest electricity grid has lead to a number of problems. This has fallen into the lap of the Bonneville Power Administration (BPA), the Pacific Northwest federal power marketing authority that must integrate the large influx of wind energy into the electricity grid.
In 1998, the BPA’s wind generation was roughly 25 megawatts (MW). Today, it totals 2,780 MW and, with the Oregon Renewable Portfolio Standards passed in 2007, over 6,000 MW of wind power is expected to be on-line by 2013. Often overlooked are the impacts of increasing wind generation on the reliability and affordability of electricity that might very well outweigh any of the environmental benefits that are proclaimed to exist.
The negative aspects of wind are quite apparent. Obviously, wind is unpredictable and inconsistent, creating a significant problem for BPA and electric utilities. To prevent brownouts or overloads on the grid, BPA has to schedule energy production in advance and the ability to predict when and how hard the wind will blow is extremely limited (usually a two or three day window) and is often inaccurate.
Because wind power is so unpredictable, every MW must be backed up by an equal amount from reliable, reserve energy sources to replace the energy lost when the wind dies down. This means BPA must have a “balancing” reserve equal to or greater than the wind power capacity utilized at any given time. In the Pacific Northwest the backup source has traditionally been federally owned hydroelectric dams, which are shut on and off to respond to fluctuations in wind energy.
According to BPA, the ability of the federal hydro system to serve as a balancing reserve is between 3,000 – 3,500 MW of installed wind generation. This means that BPA can only back-up roughly half of the projected increase in wind power. In the near future, BPA will be forced to consider other options to establish a satisfactory reserve for integrating the large influx of unreliable energy.
Some efforts to rectify the integration problem include evaluating the feasibility of dynamic scheduling, which means breaking down the periods of time wind generation is scheduled (e.g. from hour-to-hour to 30 minute increments). Additionally, BPA is analyzing better ways to forecast wind speed and is researching storage technologies (such as compressed air or flywheel technology).
Such advances are generally decades-off, and better forecasting can hardly be said to alleviate the problems inherent to ramping wind-balancing generation; therefore BPA will eventually be forced to either buy additional dispatchable generation capacity from third-party suppliers or to build additional back up capacity. This leads to increased costs for BPA, the utilities which purchase power from BPA, and ultimately Oregon ratepayers.
Where this additional back-up power comes from is a critical question. PGE has begun the permitting process for a natural-gas fired plant in North-Central Oregon, and plans for the completion of a second natural gas plant in 2015 are underway. These facilities will become even more necessary as the ability to use hydroelectric dams as back up is strained and wind generation capacity keeps expanding due to legislative mandates
Building new natural gas facilities to serve as a balancing reserve for additional wind sources has several related problems. First, natural gas is subject to price volatility, similar to buying gasoline at the pump. Uncertainty in production and delivery lead to significant fluctuations in natural gas costs.
Further, natural gas facilities produce greenhouse gas emissions, which at least partly negates the purpose of the renewable energy mandates. When asked if wind power was reducing carbon emissions, Deb Malin, a BPA representative, answered, “No. They are, in fact, creating emissions.” This is because when a natural gas facility is ramped up and down to respond to fluctuations in wind power output, it can see its efficiency drop to between 35-50 percent.
Thus not only are electricity rates increasing because of additional wind generation, but the subsequent increase of natural gas reliance further exacerbates the problem by introducing volatility and greenhouse gas emissions.
Wind = Higher Rates
In 2009, BPA requested the Oregon Public Utility Commission to allow an electricity rate increase to reflect the costs of integrating wind. BPA proposed an increase of $2.79 per kilowatt-month, and the OPUC set the final rate increase at $1.29.
Likewise, Pacific Power customers most likely will see a significant increase in their electricity rates, starting January 2011. The second-largest investor-owned utility in Oregon filed a 20% rate increase with the OPUC. 13% of the rate increase is designed to cover costs associated with two new transmission lines and finalized construction of two new wind farms in Wyoming. Seven percent of the increase is to cover “the expiration of long-term contracts for low-priced hydropower, the expiration of a fixed-price gas contract, and costs associated with integrating intermittent wind power”.
So not only will consumers have to pay more money to build additional wind farms (mandated by the state Renewable Portfolio Standard) but also to integrate the intermittent production of these wind power facilities. According to the article, a monthly bill of $80.96 in 2011 will increase to $96.78.
This increase is “a whopper,” said Bob Jenks, executive director of Citizens Utility Board of Oregon, a ratepayer advocacy group. “In the economy we’re in today, where many of their [Pacific Power’s] customers are struggling to pay their bills, this is going to be really difficult for folks.”
Interestingly enough, Oregon already has a 100% voluntary system to allow ratepayers to purchase renewable energy if they wish to do so. Green power programs available through all the major utilities give ratepayers the option of paying the above market costs associated with renewable energy. PGE boasted the highest participation rates in the nation during the past few years at a rate of approximately 9%.
Conclusion: Bad Deal for Consumers
It does not seem wise to force Oregonians to purchase an energy source that has so many associated costs. At best, wind power simply replaces a clean reliable and affordable energy source of power: hydroelectricity. At worst, it invites increased price volatility and the prospect of more greenhouse gas emitting facilities. Ultimately increasing wind generation leads to financial burdens on businesses and individuals across the state that ought to be considered further. Legislators should not attempt to choose winners in emerging energy technologies nor force costly energy sources upon ratepayers. Instead utilities should allow ratepayers to pay for the full cost of renewable energy voluntarily and expand renewable energy according to ratepayer demand.
Eric Lowe, formerly a research associate at the Cascade Policy Institute (CPI) in Portland, Oregon, is a master’s degree candidate at the University of Maryland School of Public Policy. He thanks Todd Wynn of CPI for his help. The full-length version of this report was originally published by the Cascade Policy Institute, and can be found at: Think Twice: Why Windpower Mandates are Wrong for the Pacific Northwest.