Emissions, Renewables, Wind

Wind energy a good fit for wholesale power markets, report shows

BOULDER, Colo., April 25, 2002 — A recent report says that newly developing wholesale power markets are well suited to incorporate wind generation.

“Utilities considering developing wind generation don’t need to ask whether it’s technically feasible to integrate wind generation into wholesale markets — it is,” said Eric Hirst, a renowned expert on bulk-power reliability and wholesale energy markets, and co-author of the report, published by Platts Research and Consulting’s E Source Green Energy Service.

Such integration is increasingly possible because of the open and competitive wholesale-energy markets now developing around the country. “These markets have considerable flexibility, which can accommodate the lack of control, unpredictability, and volatility inherent in wind-farm output,” says Hirst.

The report, Wind Energy: Integrating an Intermittent Resource, explores the technical and economic questions that are being raised as a result of the rapid development of wind energy. “Market rules that dictate how wind energy is valued are a huge unknown — they still vary by region within the U.S.,” says Adam Capage, director of the E Source Green Energy Service at Platts Research & Consulting.

Just over 1,700 megawatts (MW) of wind generation was added to the U.S. electric grid in 2001 — a 65% increase in wind capacity in just one year. Technological advances, favorable tax credits, and state policies mandating renewable generation have all contributed to this rapid development of wind generation.

The report states that the real issue for utilities and wind generation developers and policy makers is the increased system cost of integrating wind energy. “Somebody has to pay for the generators that offset the variability of wind output. I think wind generators ought to pay for the costs they impose on the system,” says Hirst. “The good news is that we can calculate those costs and decide what is fair — blanket statements that suggest wind energy is impractical because it is intermittent are just not true.”

The E Source Green Energy Service is a membership-based service designed to assist utilities with “green pricing” renewable energy.

Platts is a provider of energy information and marketing services. Additional information is available at www.platts.com and www.plattsmetals.com.