Debunking the Myths about Wind Energy and Negative Pricing | The Energy Collective
he increasing penetration of wind energy on U.S. grids is affecting electricity markets in a big way.
First, the good news.
“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."
Now, the other concern.
“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.”
Lesser is conflating the two effects of wind, Goggin said, and exaggerating the significance of the second.