Independent grid operator study confirms wind power's economic, environmental value

on October 29, 2013 | 6 min read

New research released by an independent grid operator confirms that wind energy is drastically decreasing both the price of electricity and emissions of harmful pollutants. The study was led by PJM, the independent grid operator for all or parts of 13 Mid-Atlantic and Great Lakes states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia) and DC. The results are posted here.

Highlights of the study:

– Wind energy produces massive reductions in electricity production costs and wholesale prices. Obtaining 20% of PJM’s electricity from wind energy reduces the cost of producing electricity by $9 billion annually (about 25% of overall production costs of $37 billion), while 30% wind reduces production costs by $13 billion (about 35%) each year. Wholesale electricity prices are reduced by $9-21 billion annually across the 20% and 30% scenarios, with the high offshore scenarios producing the largest wholesale price reductions of $21 billion. This occurs because offshore wind tends to produce more during times of peak electricity demand, offsetting more expensive gas generation.

– Wind energy drastically reduces pollution. The 20% wind case reduced fuel use and carbon pollution by 18% more than the 2% wind base case, while 30% wind reduced fuel use and carbon emissions by more than 29% relative to the 2% wind base case. The 20% wind case reduced annual carbon pollution by around 80 million tons, while the 30% wind cases reduced pollution by around 140-200 million tons annually. These results include detailed modeling of how changing the output of fossil-fired power plants affects their emissions and efficiency. Even at high levels of wind energy, this power plant "cycling" has no significant negative impact on the efficiency or emissions of fossil-fired power plants, further confirming the results of a study released last month showing that such cycling only reduces the CO2 benefits of wind by 0.2%.

– The study found that obtaining 30% of electricity from renewable energy would cause no reliability problems, noting that “all the simulations of challenging days revealed successful operation of the PJM real-time market.” This confirms the results of dozens of other wind integration studies and independent grid operator analyses of real-world wind operations data. As PJM’s Senior Vice President Andy Ott and other experts explain in this video, changes in wind energy output are reliably accommodated using the same tools grid operators have always used to accommodate fluctuations in electricity demand as well as abrupt failures at conventional power plants.

– The PJM study also found that the grid upgrades needed to accommodate additional wind energy would have a reasonable cost, accounting for only 6-8% of the value provided by wind energy in nearly all scenarios. Importantly, other studies by independent grid operators have confirmed that these grid upgrades would more than pay for themselves by providing other benefits, such as improved electric reliability, reduced electricity prices, more competitive electricity markets, and higher efficiency of electricity transmission relative to today’s congested electric grid.

Photo credit: David K. Clarke

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