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The U.S. gets only 4.9 percent of its electricity from wind but that proportion is rapidly growing, with help from natural gas-fired power.

Natural Gas is Helping Build the U.S. Renewable Energy Portfolio

Published
American Association of Petroleum Geologists (AAPG)

Wind power generation is growing rapidly. However, new installations have lagged since the initial expiration of the production tax credit in 2012 and the revised expiration in 2014. The EPA Clean Power Plan (CPP) will boost wind energy. This and other wind information comes from the U.S. Department of Energy (Lawrence Berkeley National Lab, LBNL) “2014 Wind Technologies Market Report” that came out in early August. We get our natural gas statistics from the Energy Information Administration, EIA.

The U.S. now has 65.9 gigawatt (GW) of wind generating capacity, but the U.S. gets only 4.9 percent of its electricity from wind. In comparison, Denmark gets 40 percent of its electricity from wind. LBNL reports that 96 GW of wind power projects are waiting to get approval for transmission interconnection—wind power will certainly continue to grow.

Growing wind generation requires more than installing a wind turbine; it also requires building new transmissions lines to move power from rural generating areas to population centers that need the power. Wind energy also requires that system operators have sufficient reserve generating capacity, usually from hydro or natural gas, for use when the wind is not blowing—luckily, natural gas generation has grown 27 percent in the past six years.

Helping wind power growth is the fact that turbine size and efficiency are rapidly growing, pushing down wind prices; however, low natural gas prices cut demand for wind generation.

CPP may be a huge incentive to wind and other renewable power. The plan requires 28 percent of power generation from wind and other renewables in 2030. This level would require subsidies and/or incentives, given that the EIA 2015 projects that without CPP only 19 percent of electricity would come from renewables in 2040.

The LBNL wind power report  explains that after plummeting in 2013, wind capacity additions rebounded to almost 5 GW of new generating capacity in 2014, although lagging well behind the approximately 13 GW installed in 2012. This pattern of growth results from the expiration of the production tax credit—projects had to be at least “under construction” by the end of 2014.

Twenty-nine states and DC that have renewable portfolio standards (RPS), regulations requiring increased production of energy from renewable energy sources, also incentivize wind power. The existing state RPS can support 4-5 GW of renewable energy additions annually through 2025—wind would be a large part of that amount. Of course, CPP would require much more renewable construction.

Wind generation is highly regional: Texas has over 20 percent of the nation’s capacity—Texas gets over 10 percent of its electricity from wind (EIA). The U.S. does not have any operational offshore wind generating facilities although several are in various stages of planning and development.

For clarification: generating capacity is different from, and always much larger than utilization rates—how much power we actually get from a source. Utilization is based not only on when and where the wind is blowing, but also on safety and reliability decisions by system operators. System operators choose which power sources to dispatch based on not overloading transmission lines and recognizing how fast a source can come online. Secondary considerations include requirements to use renewables and dispatching the cheapest source first.

Wind generation capacity factor (wind utilization) was 33.9 percent in 2014. Natural gas combined cycle (utility-scale generators) was 47.8 percent in 2014. For comparison, coal and geothermal were over 60 percent and conventional hydro was 37.5 percent. (EIA)

Texas is an example of the factors affecting utilization rates. Texas wind production increased by 7,000 MW from 2006-09 creating congestion in the rural west and north. This led to significant curtailments of wind power (temporary, mandatory power load reduction taken when there is a risk that the utility cannot meet its power requirements and retain a prudent reserve margin). Curtailments declined from 2011 to 2014 with the addition of 3,500 miles of transmission lines that helped move power to population centers in the eastern half of the state.

On April 2 Platts, The Barrel, article reports that the record usage of Texas’ 14,100 MW installed capacity was about 9,500 MW. Recently some wind energy has been priced at $0.00, which some producers can afford because the PTC—2.3 cents per MW-hour—is available for 10 years, but only if they are producing. This suggests a wind energy surplus in Texas, but additional generation capacity—to 18,000 MW—is planned for the next couple of years.

Texas has not neglected natural gas. Texas average daily electricity demand is 52,000 MW. Texas has 32,000 MW of base-load coal-fired and nuclear capacity. In addition, it has almost 32,000 MW of low-priced, gas-fired intermediate and peaking capacity.

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