Wind vs. Natural Gas

[wtmusic]

(WSJ article requires a subscription, but this is an excellent analysis in its own right.)

"Today's Wall St. Journal includes a very interesting article on the real-world competition between wind power and electricity generated from fossil fuels. At least in Texas, steadily increasing wind generation has apparently come mainly at the expense of natural gas, rather than displacing coal-fired power, as might have been anticipated by many wind advocates. That has implications for the effectiveness of renewable energy policy as a means of reducing greenhouse gas emissions, as well as for the utilities and independent power generators that are complaining that wind has been given overly-preferential treatment.

Texas makes an interesting laboratory for demonstrating the practical consequences of our shift towards renewable energy. ERCOT, the Texas grid, has little connectivity with neighboring grids; power generated within Texas must, for the most part, be used in Texas, while demand in Texas must be met mainly by generators within the state. That makes the relationship between wind and fossil fuel generation more transparent than it would be in another region with larger imports and exports. The resulting statistics on gas generation displaced by wind, as presented in the article, are unlikely to surprise those familiar with the technologies involved."

http://theenergycollective.com/TheEnergyCollective/60026?utm_source=feedburner&utm_medium=feed&utm_campaign=The+Energy+Collective+%28all+posts%29

[unhappycamper]

1. Damn. I thought this was about Boner and McConnell. n/t

[bemildred]

9. I was thinking it was about Congress, but yours is OK too. nt

[Statistical]

2. Which is why we need a carbon tax.

Natural gas is cleaner than coal however it costs more than coal.
While electricity by nat gas would rise under carbon tax the price of electricity by coal would rise by almost 3x as much.

The problem is coal is very cheap. The plants are moderately expensive to build (more than nat gas, cheaper than wind, solar, nuclear) but once the plant is built the "marginal cost" per kwh is about 2 cents. Nothing comes even close to that.

So wind has replaced NEW COAL but not OLD coal.

NEW Coal would be the cost of constructing new coal plant. The capital cost for new plant plus interest is amortized over the lifetime power generation (30-50 years). Wind edges out new coal.

The problem is the 800+ existing coal plants. They capital costs have long since been paid for so from today onward the only cost is the "marginal cost" = fuel + maintenance + repairs.

Coal with its ultra cheap marginal cost will be very difficult to remove. A carbon tax would change that. Carbon tax would "reflect" the higher pollution cost of coal compared to natural gas. It would cause the marginal cost of coal to rise higher than wind + natural gas. Rather than natural gas getting displaced by wind it would be coal. Otherwise it likely will take decades not years before coal power is phased out.

[damntexdem]

3. Not just a carbon tax -- in Texas, a cabron tax.

;-)

(Sorry, on here I don't know how to put the accent over the o.)

[FBaggins]

4. This isn't necessarily true.

In a properly designed system, this would be true... but haven't recent cap/trade proposals given large breaks to coal?

[Statistical]

5. Yeah they have.

The devil is always in the details.

Coal lobby is pretty strong. I prefer a carbon tax as opossed to C&T but either way there will need to be some flexibility.

The goal would be to have enough flexibility so the system isn't unworkable (stop all coal in 30 days nonsense) while not having so much that it is a paper tiger.

Even a bill that gives large breaks initially designed to slowly decrease to nothing over a decade would be preferable to the status quo.

The current status quo is the most horrible form of power ever devised is by far the absolute cheapest. Unless that changes any attempt to slow emissions growth will be very difficult.

[joshcryer]

13. We won't get a carbon tax because NG is Americas fuel of the future.

[joshcryer]

10. Completely agreed.

[phantom power]

6. It's displacing NG cuz NG can follow the intermittency, and coal can't.

[kristopher]

7. Not exactly...

It is because of the way power is marketed. Everything is built around large scale centralized thermal generation, including the priorities in the markets. The short term market bids are based on fuel costs and since wind has 0 fuel costs, it bids that into the short term market so that it's output is always accepted. The actually get paid the price of the highest winning bid (which is usually gas) and thus make a profit. It is this structure that is causing it to compete directly with natgas.

As the penetration of wind increases it will overwhelm this market. We are going to need some regulatory fixes to address this issue. A carbon tax or cap & trade could be effective over time.

Another possible approach that has never, to my knowledge, been explored here would be to use regulatory changes to require full utilization of renewables and only then utilize the other generating sources to shape output around renewables - essentially turning the current structure on its head. That isn't likely to happen here, but it is what China is doing. Of course there, the built infrastructure is at a low enough level to make equity to existing generating sources less of an issue.

[Fledermaus]

8. You know nothing and understand less

[bananas]

17. Expected to double in 3 years to 12% of Texas electricity

From the WSJ article in the OP:

The Texas wind figure is expected to double by 2013 as more transmission lines are built. In the past three years, wind has come to provide 6% of the Lone Star State's power, up from 2%. Gas's share has dropped to 42% from 46%.

If it continues to double every 3 years, in 2013 it will 12%, 2016 24%, 2019 48%, 2022 96%, 2025 192%, ...
It will be interesting to see how long that goes on, Texas has tremendous offshore wind as well as solar resources, which is also doubling every 2-3 years. And the Texas grid will be connected to the eastern and western grids with superconducting transmission lines: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=226387&mesg_id=226411

[Merchant Marine]

11. Not surprising, NG is the most expensive and dangerous of the FF trio

Coal is cheap as hell and doesn't have any special storage or transportation requirements. Coal will be the last to go because of simple economics.

[joshcryer]

12. NG will also get cheaper as we start tapping the vast reserves of it that we have.

Like wind, it is cheap to set up a small NG plant, as most costs are in fuel, not running a simple gas turbine.

[NNadir]

14. Um, by shattering every bit of rock underlying the continent, and destroying ground water forever.

Heckuva job.

Gas is an environmental nightmare. Two hundred years from now we will seem like the worst pigs that ever lived, and be treated with total disgust because we thought "gas was cheap."

[joshcryer]

16. You think I want to see that happen?

I hope to fucking god it doesn't but we're expanding NG like mad.

[bananas]

18. But according to the OP, wind is reducing both coal and NG use - is the OP full of shit?

The article in the OP claims that wind isn't reducing coal use, it's reducing NG use.
However, from the WSJ article in the OP, wind is reducing both coal and NG use:

The Texas wind figure is expected to double by 2013 as more transmission lines are built. In the past three years, wind has come to provide 6% of the Lone Star State's power, up from 2%. Gas's share has dropped to 42% from 46%.

Not mentioned in the article, but apparent from the charts, is that both coal and NG have declined. If wind continues to double every 3 years, in 2013 it will 12%, 2016 24%, 2019 48%, 2022 96%, 2025 192%, ... and there will be no need for coal or nuclear. Texas has tremendous offshore wind as well as solar resources, which is also doubling every 2-3 years. In a few years Texas will be connected to the eastern and western grids with superconducting transmission lines, allowing load balancing across three time zones, further reducing the need for storage or coal or nuclear: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=226387&mesg_id=226411

[NNadir]

15. Since wind is a trivial form of energy in Texas, I can't see how they can claim this.

It really doesn't displace anything:

http://www.eia.doe.gov/cneaf/electricity/st_profiles/sept05tx.xls

All of the so called "renewables" combined have done almost nothing to stem dangerous fossil fuel waste dumping in Texas.

The wind industry would, however, collapse completely without the gas industry, not that anyone would notice the wind industry at all going missing, either in Texas or anywhere else, since the wind industry does go missing relatively regularly.