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.

Realistic Expectations for Renewable Energy

RenewableEnergyWorld’s Inside Renewable Energy podcast returned to the potential green bubble this week. Carbon-Nation readers will recall that in May this podcast reviewed our reporting on organic photovoltaics, and the allegations that researchers developing that very promising (but still quite nascent) approach to solar power had overstated their advances. This week’s entry, “Keeping the Industry in Check”, broadens the issue to take on overheated hyperbole coming from the renewables industry writ large.

Podcast Editor Stephen Lacey’s quotes from wind energy expert Mack Sagrillo capture the conversation’s overall message: Buyer beware. “It’s great that people are looking for alternatives, but it’s amazing how little people know when they seek them out. That leaves people open to purchasing a product that is less-than-reliable. We are a very gullible culture, we’re always looking for the magic bullet,” says Sagrillo.

Lacey brings me in to speak to media’s role. Some of my touchstones: Asking uncomfortable questions; providing caveats that make the story a little more messy but a lot more accurate; and letting readers know when technology advocates are providing only half the story.

The most important audience for the above? The editors that serve as the ultimate gatekeepers for the reader and, all too often in my opinion, underestimate their audience’s appetite for complexity.

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