Economic Benefits

Anti-renewable energy special interests attack businesses growing American wind power

Anti-renewable energy special interest groups misunderstand how the electricity grid works.
Anti-renewable energy special interests attack businesses growing American wind power
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Say you deposit $20 in the ATM near your office. A short time later, you withdraw it from the ATM near your house. You now have a different bill than the one you deposited, but that’s irrelevant; you still have $20.

This aspect of the banking system is analogous to how the electric power system works: it aggregates all sources of electricity supply and demand over a large geographic area, allowing one to add wind energy in one area and use an equivalent amount of electricity somewhere else on the grid.

Just as it would be impossible and pointless to insist that the $20 bill you withdrew in the banking example be the same one you had deposited earlier, it would be impossible and pointless to require an electricity user to specify the exact power plant they receive energy from.

The integrated nature of the grid allows companies who wish to use wind energy to add it where it is most cost-effective to do so, even if the location of their primary demand center is in an area that is less suitable for wind generation. Many large companies are now using this strategy to increase the percentage of clean energy on the grid, adding supply in one area and using an equivalent amount of electricity in another. Purchasing wind energy in this way allows these companies to meet their sustainability goals while saving money.

Amazon, Microsoft, Google, and Procter & Gamble are recent noteworthy examples. Typically, these companies enter into a long-term contract and agree to purchase electricity from a wind project at a fixed rate for a number of years, using a mechanism called a Power Purchase Agreement (PPA). Similar to a fixed-rate mortgage, a PPA gives the project owner a guaranteed customer for a designated time period, while the electricity purchaser receives protection from fluctuations in the price of conventional fuels such as natural gas. It’s a win for both parties. This video explains more about PPAs.

Unfortunately, anti-renewable energy special interest groups are trying to criticize such purchases by using faulty logic and incorrect assumptions. Among their claims is that the company buying the wind energy is not truly powered by renewable energy.

What they’re missing is how the power grid works.

As explained above, the grid combines all sources of electricity supply and uses them to meet all sources of electricity demand. A factory’s electricity needs will be met by the system mix, and it’s always impossible to track the exact source that generated that electricity. This Department of Energy infographic further explains how the electricity grid works.

Remember our ATM analogy: Amazon’s wind farm puts wind energy onto the grid to balance out the energy its data centers take out, so it’s covering a significant portion of its electricity needs with renewable energy, even if transmission lines from the wind farm don’t run directly to the data center. Amazon has established a goal to add enough renewable energy to the grid’s supply to meet all of its data center’s electricity demands.

Would the anti-renewable special interest groups claim that the $20 you withdrew from your bank account was not actually your money because it was a different bill than the $20 you deposited?

American wind power opponents also claim that because wind is a variable resource, it can’t generate electricity at 100 percent of capacity. But the truth is that no energy source runs at 100 percent capacity 24/7, 365 days a year; and wind’s percentage is actually comparable to the average hydroelectric or natural gas-fired power plant’s output factor.

Powering a data center on a single fossil or nuclear plant would not work either, because those plants experience unexpected shutdowns or maintenance outages about 10 percent of the time (and often cannot or do not run flat-out the rest of the time). Nuclear and most fossil plants also cannot easily change their output in response to changing electricity demand, so they alone couldn’t meet the facility’s needs for this reason as well. In almost all cases a data center or factory is a poor place to build a power plant of any type, whether it be fossil, nuclear, or wind, as most sites lack the fuel source and other services needed for operation.

This is why we have a diverse and integrated power system: so that all variations in supply and demand are combined, and together all those power plants become reliable. We built a large integrated power system because it was by far the most cost-effective way to produce energy.

With its stable fuel price, lack of harmful emissions, and immunity against large instantaneous failures, wind energy contributes valuable diversity that makes our energy portfolio more reliable and better for consumers.

In reality, some of the most well-known companies in American have turned to wind energy because it’s a clean, reliable, and cost-effective way to get their electricity.

Advances in technology have helped cut wind’s costs 66 percent over the last six years, and the Department of Energy recently analyzed the benefits of generating 20 percent of the country’s electricity from wind energy by 2030.

This is an American success story that some don’t want told, but wind energy truly is helping us – and Amazon, and Procter & Gamble – build a cleaner, more affordable future.

Economic Benefits

As Senior Director of Research, Michael oversees AWEA's analytic work. Michael Goggin has worked at AWEA since February 2008. Prior to joining AWEA, he worked for two environmental advocacy groups and a consulting firm supporting the U.S. Department of Energy’s renewable energy programs. Michael holds an undergraduate degree with honors from Harvard University.ojlklkl

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