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Wind and the Myth of Widespread Negative Pricing
The two people being quoted are:
American Wind Energy Association (AWEA) Transmission Policy Manager Michael Goggin
and
An economics researcher for the nuclear and fossil industries, Jonathan Lesser
I strongly urge reading the entire article.
Wind and the Myth of Widespread Negative Pricing
Does wind power reduce grid pricing and grid reliability?
HERMAN K. TRABISH: MAY 20, 2013
...“Nobody disputes the fact that adding more wind energy to the grid displaces more expensive sources of generation,” explained American Wind Energy Association (AWEA) Transmission Policy Manager Michael Goggin. “That has two impacts. One, it reduces the total use of fuel and therefore the total fuel cost. It also drives the market price for electricity down, which is creating billions of dollars in savings for consumers."
...
“The wind production tax credit (PTC) has greatly exacerbated the number of hours where electric prices are negative,” economist Jonathan Lesser, a researcher for the nuclear and fossil industries, recently testified to a Congressional subcommittee. “As schedulable generating plants shut down because it is uneconomic for them to operate, they jeopardize reliability, and increase the costs of maintaining reliability because additional gas-fired generators must be placed on standby or operated at a higher cost.”
...
<snip>
In extremely infrequent instances, in isolated regions where wind development is ahead of the transmission build-out needed to move it to larger load centers, the market price is set by wind, Goggin explained. When there is nothing but wind to sell, wind project owners can pay grid operators to take their output. With the PTC, they can sell as low as negative $23 per megawatt-hour and still break even.
“This almost never happens,”...
...Wind only sets the market price if it is the most expensive resource on the system, and that almost never happens because wind has a zero fuel cost, Goggin explained. If wind is setting the price, it means that everything else in the area has been turned off, and that only happens on very localized parts of the grid..
Does wind power reduce grid pricing and grid reliability?
HERMAN K. TRABISH: MAY 20, 2013
...“Nobody disputes the fact that adding more wind energy to the grid displaces more expensive sources of generation,” explained American Wind Energy Association (AWEA) Transmission Policy Manager Michael Goggin. “That has two impacts. One, it reduces the total use of fuel and therefore the total fuel cost. It also drives the market price for electricity down, which is creating billions of dollars in savings for consumers."
...
“The wind production tax credit (PTC) has greatly exacerbated the number of hours where electric prices are negative,” economist Jonathan Lesser, a researcher for the nuclear and fossil industries, recently testified to a Congressional subcommittee. “As schedulable generating plants shut down because it is uneconomic for them to operate, they jeopardize reliability, and increase the costs of maintaining reliability because additional gas-fired generators must be placed on standby or operated at a higher cost.”
...
<snip>
In extremely infrequent instances, in isolated regions where wind development is ahead of the transmission build-out needed to move it to larger load centers, the market price is set by wind, Goggin explained. When there is nothing but wind to sell, wind project owners can pay grid operators to take their output. With the PTC, they can sell as low as negative $23 per megawatt-hour and still break even.
“This almost never happens,”...
...Wind only sets the market price if it is the most expensive resource on the system, and that almost never happens because wind has a zero fuel cost, Goggin explained. If wind is setting the price, it means that everything else in the area has been turned off, and that only happens on very localized parts of the grid..
http://www.greentechmedia.com/articles/read/Wind-And-The-Myth-of-Widespread-Negative-Pricing?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily
