PacifiCorp report: Wind integration getting cheaper
By Christina Williams
Sustainable Business Oregon editor
Cheap natural gas is bringing down the cost of integrating wind power into PacifiCorp's energy mix. But the loss of the Production Tax Credit could still blow up the economics of utility-scale wind power.
A biannual report from PacifiCorp that analyzes the cost of integrating wind power into its energy mix shows that cheap natural gas prices have dramatically reduced those costs over the last two years.
Because wind energy is a fluctuating resource, it requires utilities to keep power in reserves for use when the wind isn't blowing. In PacifiCorp's case that's an extra 200 megawatts of reserve power, part of a total of 587 megawatts the utility keeps in reserve.
Cheap natural gas has dramatically reduced the cost of generating that reserve power. What cost $9.70 per megawatt in 2010, now costs just $1.89 per megawatt.
Less expensive and cleaner than coal, natural gas is also an attractive source of backup power because it can be fired up and dialed back in response to demand.
But Bob Gravely, Pacificorp spokesman, cautions that wind is only an economical source of renewable power for utilities if the federal Production Tax Credit is in place.
"I wouldn't conclude that lower natural gas prices are good for wind," Gravely said. "Wind has been economical but the loss of the Production Tax Credit will significantly alter the economics of wind power."
An ongoing push from wind energy players has yet to shake loose an extension of the tax credit which is set to expire at the end of the year. Some worry that Washington's preoccupation with the so called fiscal cliff could jeopardize an 11th hour Production Tax Credit extension.
The company's 2012 Wind Integration Resource Study, completed every two years for resource planning purposes, will be finalized as part of the company's integrated resource planning process next year.
PacifiCorp has just over 1,700 megawatts of wind in its system and is the second-largest utility owner of wind behind its sister utility in Iowa, MidAmerican Energy.
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