Wind energy has a major problem when conventional wisdom holds that it can meet 20% of electricity needs, perhaps 30%. Even George Bush has publicly said he believes in 20% wind, a statement the American Wind Energy Association was quick to seize and run with. But the trouble with targets, even unintentional targets, is that they all too rapidly evolve into limits. What 20% tells the world is that wind energy has limited potential. The natural reaction of anyone not aware of the struggles of the wind lobby for even that level of recognition is to conclude that if 20%, or thereabouts, is all wind can achieve, is it worth the trouble? The answer quickly becomes "not really" when in its current literature the European Wind Energy Association (EWEA) tells us "that wind does not replace base load generation." Not true.
The fact is that there are no technical barriers to how much wind energy a large power system can rely on, as this magazine has consistently demonstrated in the past. Increase a system's reserves and back-up and wind power can meet all of demand for increasingly longer periods. Eventually it will start to replace base load generation too. The question has been whether there is an economic limit. At what point does the overall cost of wind power, including the cost of increasing the volume of extra reserve and back-up, require asking the consumer for more money? The answer, provided in our analysis of the economics of high wind penetration in this issue (pages 51-56), will surprise you. Even at 70% wind penetration, a consumer stands a good chance of saving money. Given the rising price of gas, wind's "variability penalty" of just €15/MWh might well be offset by its cheaper generation costs. That logic explains why a number of utilities, especially in America, have forsaken the "dash for gas" for "we want wind."
But no smoke without fire. If the facts are that clear and there are not even serious economic limits to wind energy penetration, where does 20% come from? A walk down the short annals of wind power industry explains a lot. Thirty years ago, when knowledge of wind power was in its infancy, British utility manager John Wright aired the 20% figure at the World Energy Congress. He was quoted, widely, for years. Fifteen years later it was enshrined by EWEA in a much acclaimed EU-backed strategy for wind energy, widely circulated. Even among EWEA executive committee members in 1991, 20% was highly controversial-some considered it to be unrealistic. With such self doubt, perhaps it is not so surprising that 20% passed into wind power mythology.
What neither Wright, nor EWEA claimed, however, was that 20% was an upper limit. That just happened to be the limit of knowledge at the time. The past 15 years have brought far greater experience. Our analysis of wind power penetration economics-and its encouraging results-required the availability of enough operational data to undertake the arithmetic. It builds on work published in the past year by Danish power system operator Energinet, which demonstrates the feasibility, without storage, of building enough wind power to potentially meet 100% of consumer demand. In practice, the wind power is operated in conjunction with flexible thermal plant (also hydro in other countries) which is stood down when not needed. The effective wind penetration level is 70%. That is not an upper technical limit, but at current electricity prices looks like the sensible economic limit, presuming that a possible rise in overall electricity price of 10% is the allowable maximum. Should the day come when the huge reduction in C02 emissions afforded by that much wind is realistically valued, the wind power lobby would be out of a job.
Out of date
Indeed our analysis is in many ways a worst-case scenario for wind. It assumes that the virtual "all wind" system envisaged by Energinet has no links to neighbouring markets and surplus power on windy days has little or no value. In practice, it could be sold to a neighbour. And as wind levels increase, other markets will open up for surplus power, such as producing hydrogen for transportation. Even storage might become viable. Focusing our analysis on the small system of western Denmark also works against the economics. The bigger system, the less likely that wind's variable supply will incur extra costs. As we demonstrate, the "variability penalty" is far lower in Britain and it will be lower still in locations with more predictable winds, like California. What's more, new approaches to efficient use of electricity bode well for wind. Requiring electric appliances such as freezers or immersion heaters to switch on and off as system frequency rises and falls will make the system easier to manage, reducing the cost of reserve and wind's variability penalty in the process. Let's face it, talk of 20% puts us way behind the times.