Wind Energy Can’t Stand Alone

A new Cascade Policy Institute–Reason Foundation study finds that wind energy is not suited to be the lone or primary source of a grid’s total electricity, due to its variable nature. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs because it requires expensive storage facilities or continuously available carbon dioxide-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup to wind power has been provided by the Columbia River hydro system. However, hydroelectricity has even less carbon dioxide associated with it than does wind power. Displacing hydropower from the grid in favor of wind is actually a step backwards from the standpoint of reducing greenhouse gas emissions.

 

Two factors drive Oregon’s policy preference for wind power: subsidies to producers and Senate Bill 838’s Renewable Portfolio Standards. The Renewable Portfolio Standards force large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion-dollar tax on ratepayers, with net negative benefits for environmental quality.

 

As this study shows, policies favoring wind power are a mistake from both an environmental and an economic standpoint. Oregon legislators should repeal SB 838 and all wind power incentives in 2013.

 

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

Wind Power Can’t Cost-Effectively Be a Large Grid’s Main Source of Electricity

PORTLAND, Oregon—Because of its variable nature, wind energy is not suited to be the lone or primary source of a grid’s total electricity, according to a new Cascade Policy Institute–Reason Foundation study. If used to produce more than 10-20 percent of a system’s electricity, wind power increases operating costs, due to the need for expensive storage facilities or continuously available CO2-emitting backup power generation facilities.

 

In the Pacific Northwest, the backup mostly has been provided by the Columbia River hydro system. However, since hydroelectricity has even less CO2 associated with it than wind power does, displacing hydropower from the electricity grid in favor of wind is actually a step backwards―if reducing greenhouse gas emissions is a policy objective, as it has been for Oregon legislators.

 

The new Cascade Policy Institute–Reason Foundation report uses a full year’s worth of hour-by-hour power grid data from PJM Interconnection, which manages the electrical grid in part of the Eastern United States, to simulate how wind would have supplied the necessary power to customers in 2009. The models show wind power would have failed to supply all the electricity PJM customers needed over 50 percent of the time.

 

Thus, if wind were to produce a large percentage of a grid’s electricity, it would be necessary to build expensive energy storage facilities, or to reserve power generation facilities to supply power, when there is insufficient wind to meet energy demands at any given time and to prevent brownouts and blackouts.

 

“Consumers will have to pay twice for power, since they will be supporting two duplicate generation systems,” said Cascade Policy Institute President and CEO John A. Charles, Jr.

 

The study shows that as more reserve power is needed, the environmental benefits of wind power decrease due to the C02 emissions from those facilities, which rely on fossil fuels and must operate even when not being used, in order to ensure reliability of the electrical grid.

 

In the future, the hydro system will be over-committed due to salmon mitigation requirements; thus, natural gas will have to be the backup for unreliable wind. Since gas-powered generators must be kept running 24 hours per day even if no electricity is required (the so-called “spinning reserve” mode), this practice will dramatically increase total energy consumption and greenhouse gas emissions for the region.

 

The study concludes that, given the costs involved, the practical upper limit for wind power’s contribution to the electricity grid is 10% of the total energy mix. This would result in a 9% reduction in CO2 emissions.

 

The current mania for wind power in Oregon is being driven by two factors: (1) subsidies to producers; and (2) SB 838 Renewable Portfolio Standards, forcing large utilities to procure 25% of their total power from politically designated “green power” sources by 2025. Both policies amount to a multi-billion tax on ratepayers, with net negative benefits for environmental quality.

 

“Very high wind penetrations are not achievable,” said William Korchinski, author of the Cascade Policy Institute–Reason Foundation study. “As wind’s share increases, system reliability will be adversely affected disproportionately—unless adequate reserve power is available. That power reserve is expensive and lowers any possible environmental benefits.”

 

“As this study shows, policies favoring wind power are a mistake,” Charles concluded. “Oregon policy makers should repeal SB 838 and all wind power incentives in 2013.”

 

Full Study Online

 

“The Limits of Wind Power” is available online here.

 

About Reason Foundation

 

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason Foundation produces respected public policy research on a variety of issues and publishes the critically acclaimed Reason magazine and its website www.reason.com. For more information, please visit www.reason.org.

 

About Cascade Policy Institute

 

Founded in 1991, Cascade Policy Institute is Oregon’s premier policy research center. Cascade’s mission is to explore and promote public policy alternatives that foster individual liberty, personal responsibility, and economic opportunity.

To that end, the Institute publishes policy studies, provides public speakers, organizes community forums, and sponsors educational programs. For more information, visit www.cascadepolicy.org.

Oops! Renewable Energy Costs Oregon Billions

In 2007, Oregon legislators decided they would force Oregonians to purchase renewable energy whether or not they wanted it or could afford it. Legislators proclaimed this would help the Oregon economy and make our energy system more affordable and reliable. They were wrong.

 

Last year, one in 30 Oregonians had their electricity cut off due to inability to pay, and enrollment in the low-income energy assistance program has increased significantly. On January 1, 2011, electricity rates increased significantly for Oregon households: Pacific Power rates increased by 14.5% and PGE rates by 4.2%. PGE also added a “Renewable Resource Adjustment” to ratepayers’ bills in January 2010. Currently, this rate is set at 0.22 cents per kWh, or approximately $2.13 extra per month, for an average household. Rate increases such as these will be the norm over the next fifteen years as utilities work to comply with restrictive energy policies on the state and the federal levels.

 

But legislators proclaimed that the 2007 renewable energy mandate would help “accelerate the transition to a more reliable and more affordable energy system.” What went wrong?

 

Unfortunately, renewable energy costs more than traditional energy sources and is often less reliable. Although generating energy from wind turbines and solar panels is essentially free, the costs of construction, maintenance and integrating inconsistent energy into the grid are prohibitively expensive. Thus, adding more renewable energy will increase costs and cause substantial economic hardships for Oregonians and Oregon businesses.

 

A Cascade Policy Institute report, The Economic Impact of Oregon’s Renewable Portfolio Standard, exposes the cost of renewable mandates on the Oregon economy. Over the period of 2015-2025, the average Oregonian household will pay an additional $1,706 in higher electricity costs. The average commercial business will spend an extra $9,641 and the average industrial business an extra $80,115. Over the same period, the mandate will cost Oregonians an additional $6.811 billion over conventional power, within a range of $4.009 billion and $9.310 billion.

 

Higher costs will lead to loss of jobs as well. By 2025 the Oregon economy will lose an average of 17,530 jobs, within a range of 10,025 jobs under the low-cost scenario and 24,630 jobs under the high-cost scenario.

 

Legislators may be able to justify higher electricity costs if environmental benefits, in terms of reduced emissions, outweigh the costs. However, it is unclear that the use of renewable energy resources, especially wind and solar, actually reduces emissions. Due to their intermittency, wind and solar require significant backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. As a result, a recent study found that wind power actually increases pollution and greenhouse gas emissions.

 

Also, businesses and industries with high electricity usage likely will move their production, and emissions, out of Oregon to locations with lower electricity prices. Therefore, increasing renewable energy in the state will not reduce global emissions, but rather send jobs and capital investment outside the state.

 

In the end, renewable energy can and should expand according to voluntary purchases that reflect true demand. Government should not be mandating that citizens purchase a product they may not value or cannot afford.

 

It is time to face the truth. Legislators thought that by forcing Oregonians to purchase renewable energy they could make electricity more affordable and reliable. They were wrong. As a first step, legislators should repeal the renewable energy mandate and other restrictive energy policies before electricity costs spiral out of control. In addition, future energy policies need to be subject to a rigorous analysis of economic costs and environmental benefits.

Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

Todd Wynn

Cascade Report: Think Twice Why Wind Power Mandates Are Wrong for the Northwest

by Todd Wynn and Eric Lowe

New report by Todd Wynn and Eric Lowe highlights the problem with the legislature picking winners and losers in the energy market.

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Watch an Interview with Todd Wynn about the perils of forcing wind energy on the grid.

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