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Fact check: Reason Foundation FAIL on wind and emissions

Fact check: Reason Foundation FAIL on wind and emissions

A number of fossil fuel-funded groups recently set out to attack wind energy by paying for a new report (http://reason.org/news/show/the-limits-of-wind-power) claiming wind energy is difficult to integrate onto the utility system and doesn’t provide the expected benefits. The only problem? The Reason Foundation’s analysis ended up producing results that contradict those claims and actually support the opposite conclusions.

Despite using a seriously flawed methodology that understates the benefits of wind and overstates the challenge of integrating wind onto the grid, the analysis found that adding wind to the grid greatly reduces pollutant emissions and that wind energy can readily and reliably provide 50% or more of our electricity.

– Reason Foundation agrees: Wind energy significantly reduces fossil fuel use and harmful emissions

As we’ve explained before, a large body of government, utility, and grid operator data confirms that adding wind energy to the utility system significantly reduces the use of fossil fuels and the pollution they create (see links at bottom). Every system operator or government study that has examined the issue has reached the same conclusion. Even though it is not peer-reviewed and contains numerous serious flaws, we can add the Reason Foundation’s new report to that list of studies. The Reason Foundation even included the following chart that nicely sums up their finding that adding wind energy to the grid significantly reduces emissions, and that the savings increase at higher levels of wind output. As explained in the report’s text, the analysis found that obtaining 10% of electricity from wind reduces emissions by 9%, 20% wind reduces emissions by 18%, and 50% wind reduces emissions by 54%.
 

It should be pointed out that the report’s findings actually understate the emissions savings of wind by incorrectly calculating an increased need for “backup” power plants as wind levels increase, and then incorrectly assigning wind plants a 10% emissions penalty for that “backup.” As we’ve explained previously, adding wind to the utility system does not cause a need for backup power plants (see links at bottom). First, all power plants are already backed up by all other power plants. It’s much easier for system operators to deal with gradual and predictable changes in wind output than the immediate and unexpected failures of large fossil and nuclear power plants. Utility operators already have a large supply of reserve power plants to accommodate unexpected failures at fossil and nuclear power plants as well as even larger and often unexpected changes in electricity demand. As a result, there is no need to build new power plants to “back up” wind. Second, even if wind did cause a need for new power plants to be built (which could theoretically happen as one approaches 100% wind power), the report incorrectly assigns the emissions associated with operating those power plants to wind (which double counts those emissions), when it should have only assigned the emissions associated with building those power plants, which the report itself acknowledges are trivially small. Even with that mistake, the Reason Foundation found that wind energy results in very large emissions savings (9% at 10% wind, 18% at 20% wind, 54% at 50% wind); correcting for that mistake would increase those savings by another 10%.

– Reason Foundation agrees: Large amounts of wind energy can be reliably accommodated on the utility system

Having shot its emissions argument in the foot, the Foundation’s report tries to get back on track by arguing that even though wind does produce significant emissions reductions, those savings cannot be achieved because a “10% wind penetration is the upper limit” for what can be accommodated on the power system. For the moment, let’s set aside the fact that the supposed 10% limit has already been broken by utility operators in Iowa and South Dakota, where last year wind energy provided around 20% of electricity, and utility operators in Germany, Ireland, Spain, Portugal, Denmark, which last year had wind levels of 11%, 18%, 18%, 19%, and 29% respectively. And the fact that wind energy regularly provides more than 50% of the electricity for Xcel Energy’s utility system in Colorado, and over 90% of the electricity on Portugal’s electricity system.

In its own attempt to prove that a 10% limit exists, the Reason Foundation analysis itself finds that the largest power system in the U.S. can reliably obtain 50% of its electricity from wind energy. Once again, the report includes a handy chart to show that its findings directly contradict the argument the report set out to make. Here we can see that 50% wind is reliably accommodated with zero need for wind curtailment, a level of energy storage use that falls well below the amount of pumped storage that is already built into the power system (it was installed decades ago to accommodate new nuclear power plants), and increases in reserve generation that only account for a few percent of demand.


 
As the report’s emissions calculations, its already benign findings on this issue actually greatly overstate the difficulty of integrating wind, due to several major flaws in the report’s methodology.

Most importantly, the report ignores the fact that a fleet of wind turbines large enough to power 50% of the PJM grid will have much smoother output than the wind turbines that currently power less than 1% of that grid.  As any prudent investor will tell you, a portfolio of 50 stocks will almost always have less variability than any single one of those stocks. In fact, the diversity benefits of adding new wind plants to a portfolio are far greater than for stocks. Whereas stocks can all be influenced simultaneously by the same market forces, wind plants are spread across hundreds of miles and cannot be influenced by the same weather forces simultaneously.

In this case, the Reason Foundation report was attempting to model the behavior of hundreds of wind plants spread from Illinois to New Jersey, meaning that it would take many hours if not days for a single weather event to affect a large share of those wind plants. Instead of using statistical techniques that have been used in dozens of wind integration studies to correctly model the diversity in the output of wind energy plants, the author simply took the output of the existing wind plants in that region and multiplied their output by 50, a serious mistake that is guaranteed to greatly overstate the challenge of integrating wind onto the power system. In contrast, wind integration studies that have used the correct statistical techniques have unanimously found that wind energy only incrementally adds to the large amount of variability that already exists on the utility system due to large changes in electricity demand and supply from conventional power plants, causing a smaller increase in reserve and storage needs than the already small amount calculated in the Reason Foundation report.

– Reason Foundation uses decade-old cost data from Europe in attempt to hide that wind energy is cost-effective and affordable in the U.S. today

Having lost the two main pillars of its argument, the report tries to fall back on the argument that wind is just too expensive, although that effort similarly fails. The report relies on the following cost data to claim that wind energy is too expensive, though there are two main problems. First, the data in the chart is between 5 and 9 years old. The cost of wind energy has fallen dramatically in recent years as cutting edge wind turbines have become larger, more productive, and less expensive. (http://eetd.lbl.gov/ea/ems/reports/wind-energy-costs-2-2012.pdf) Second, because wind energy output per turbine is between 30% and 100% greater in the U.S. than in most European countries, due to higher quality wind resources in the U.S., using wind energy cost data from Europe greatly overstates the cost of wind energy in the U.S.

In contrast, current figures for the U.S. show wind energy to be a remarkably effective tool for reducing consumers’ electric bills. A May 2012 analysis by Synapse Energy Economics found that building 20 GW of wind and the supporting transmission infrastructure in the Midwestern U.S. would reduce the electric bill for the average household by between $63 and $147 per year in 2020. (http://cleanenergytransmission.org/wp-content/uploads/2012/05/Full-Report-The-Potential-Rate-Effects-of-Wind-Energy-and-Transmission-in-the-Midwest-ISO-Region.pdf) Other analyses, summarized here, have found similar results. (http://www.awea.org/learnabout/publications/factsheets/upload/Consumer-Benefits-Fact-Sheet.pdf)

– The Bottom Line? Reason Foundation Fail

Despite the Reason Foundation report’s heavily skewed analysis, it actually supports key facts about utility integration of wind power.
 

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Michael Goggin is Vice President at Grid Strategies LLC, a DC-area consulting firm working on grid and markets issues for clean energy clients including AWEA. He was previously head of Research at AWEA.

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