Report

Cold? Take comfort. Wind energy is saving you money

Cold? Take comfort. Wind energy is saving you money

As the Midwest faces extreme cold this week, wind energy is once again helping to save consumers money.

During the “polar vortex” deep freeze that occurred one year ago today, wind energy saved electricity users in the Mid-Atlantic and Great Lakes states at least $1 billion in just two days. That’s according to new analysis that the American Wind Energy Association released today.

Wind energy saved consumers money during this time because it is stably priced. During the polar vortex event, natural gas power plants had to buy fuel at prices dozens of times higher than normal, translating directly into dozens of times higher electricity prices. In contrast, wind energy’s “fuel” was stable at what it always costs: zero.

Prices also skyrocketed as grid operators scrambled to deal with unexpected outages at more than 20 percent of their conventional generating fleet, while wind plants continued producing at or above expectations, keeping the lights on and prices low. These events are a powerful reminder that wind energy plays a critical role in diversifying our energy mix, improving energy reliability and protecting consumers from price spikes.

For the two days of Jan. 6 and 7, 2014, alone, the savings from using fixed-price wind energy added up to about $15 per consumer on the Mid-Atlantic and Great Lakes power grid (PJM) — or enough to buy every single person in the region a movie and popcorn. As seen in the chart below, PJM’s electricity prices were much higher on these dates than the average (indicated by the red line), but the green area shows that power prices would have spiked much higher were it not for abundant supplies of wind power during this critical time period.

Fast forward to today: The Midwest grid just set a new wind energy record in the past 24 hours, which has helped to keep power prices low there despite high electricity demand for heating and all those things we like to plug in when we’re stuck indoors.

In both last year’s cold snap and the current one, wind energy is providing large quantities of critical electricity supply when it’s needed the most, helping keeping the lights on and reducing the impact of energy price spikes. By replacing generation from the most expensive and volatilely-priced power plants with fixed-price, zero-fuel-cost wind energy, consumers are made better off, as shown in the table below.

 

Wind energy

Power plant displaced by wind energy

Cost

Zero fuel cost

Highest fuel cost

Fuel price stability

Fixed price

Volatilely-priced

Pollution

Zero emissions

Least efficient

Wind energy always provides these benefits by making our energy portfolio more diverse, but the benefits can become particularly pronounced when the electric grid is stressed – like today.

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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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