Negative Prices for Clean Power

How do you know that congestion on high-voltage transmission grids is stranding valuable renewable energy? When the price of electricity goes negative. American Wind Energy Association electricity industry analyst Michael Goggin delivers a snapshot of the phenomenon in a recent column for Renewable Energy World.

Goggin points to data from the Electricity Reliability Council of Texas or ERCOT, the state’s grid operator, showing an increasing incidence of generators paying buyers to take their power. According to Goggin, such conditions track the explosive installation of wind farms in West Texas — and are very bad news for their operators.

Prices fell below US -$30/MWh (megawatt-hour) on 63% of days during the first half of 2008, compared to 10% for the same period in 2007 and 5% in 2006. If prices fall far enough below zero that the cost for a wind plant to continue operating is higher than the value of the US $20/MWh federal renewable electricity production tax credit plus the value of other state incentives, wind plant operators will typically curtail the output of their plants.

Worse still, consumers in adjacent areas are paying top dollar for power because the transmission lines between them and the excess wind power are overloaded.

Texas is running into trouble because it pushed wind power harder and faster than other states, but it is also leading the way to address what is really a nationwide problem. This summer the Public Utility Commission of Texas approved a scheme called the Competitive Renewable Energy Zone (CREZ) process to incentivize construction of new transmission lines to evacuate stranded wind power. Earlier this month a consortium of major utilities including MidAmerican and AEP announced their intention to do so.

For a detailed yet accessible look at Texas’ renewable energy transmission challenge and efforts to clear out the bottlenecks, see this overview from the State Energy Conservation Office.

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This post was created for Tech Talk – Insights into tomorrow’s technology from the editors of IEEE Spectrum.

Anticipating Wind Power’s Uncontrollable Ebbs and Flows

Two months ago, on the evening of February 26, power grid controllers at the Electric Reliability Council of Texas (ERCOT) found themselves in an uncomfortable position: they were rapidly running out of power. As consumption outstripped supply the frequency of the alternating current — nominally 60 hertz — began to slide, threatening to damage utility and customer equipment. At 6:41 pm the grid controllers declared a grid emergency and began ‘shedding load’ to restore the grid frequency. Which is to say, they shut off the power to some customers.

These customers had agreed in advance to participate in such “demand-response” situations and would be compensated for their trouble. Nevertheless, saying no to a buyer is as much a measure of last-resort for the power industry as for any other.

Wind power got the blame early on, because wind turbines in West Texas were delivering less power than their operators had projected. But subsequent studies showed that other factors were more important. In the 40 minutes leading up to the emergency conventional power plants delivered 350 megawatts less than they had promised, while wind generation slipped just 80 megawatts relative to plan. At the same time consumption rose by a whopping 1,185 MW more than ERCOT had forecast. ERCOT’s report to the Public Utility Commission of Texas highlights that electric load growth as a key cause.

Still, smarter integration of Texas’ wind power could have prevented the trouble. As ERCOT’s report shows, an independent wind power forecast prepared for ERCOT on February 25 under an ongoing pilot project predicted the February 26 wind power drop with “good fidelity.” Unfortunately ERCOT’s grid operators never saw the forecast and hence could not take steps in advance to ensure that alternate power supplies were available.

My story on today, Scheduling Wind Power, shows that grid controllers increasingly get the message: Integrating wind forecasting into grid planning is not only key to reliably accomodating much greater levels of wind power. It will also maximize the pollution reductions achieved in the process.

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