Ever wonder what an unraveling paradigm looks like? The energy revolution that has been building for the last decade is now beginning to eat away at the assumptions that underly our antique electrical grid.
I’ve written here how in Germany, torrents of new renewable energy have outstripped the country’s transmission system, resulting in negative pricing of power in some regions. We’ve seen it , here and there, in some renewable energy early-adopter regions in the US. Now its coming on in a big way, and starting to undermine the assumptions for the “hub and spoke” centralized system of large thermal power plants. Near zero and negative pricing sounds like a good thing for you and me, but its an urgent signal that something fundamental is changing in the way we produce power, ready or not.
It’s an alarm bell for policy makers that the new energy technologies are going to change the energy business similar to the way the internet changed..well, everything.
The rumblings discussed here are a warning. Wind energy prices in my moderate-to-good wind resource region are now about half of what they were just 3 years ago, and still heading south, as technology improves. Wind energy observers tell us that wind-baggers in congress and elsewhere may slow progress down, but can’t stop the rush to wind energy.
Looking to the near future, solar photovoltaics will be the “new wind” of this decade.
We can learn a lot from looking at Germany to see how they reconcile the new logic a distributed energy systems with the legacies of the outmoded old grid. What Germany will have to sell to the rest of us will be the expertise that they are building on now. We can ignore the lessons and stumble on the same rocks, or we can learn, and perhaps leapfrog Germany’s huge lead in these areas.
Yesterday’s headline on Bloomberg news was “Nuclear Industry Withers in US as Wind Pummels Prices”, and raises a complaint about “government subsidized wind power” outcompeting (government subsidized) nuclear power, and even undercutting the much touted shale gas. Italics are mine.
A glut of government-subsidized wind power may help accomplish a goal some environmentalists have sought for decades: kill off U.S. nuclear power plants while reducing reliance on electricity from burning coal.
That’s the assessment of executives and utility experts after the U.S. wind-energy industry went on a $25 billion growth binge in 2012, racing to qualify for a federal tax credit that was set to expire at year’s end.
The surge added a record 13,124 megawatts of wind turbines to the nation’s power grid, up 28 percent from 2011. The new wind farms increased financial pressure on traditional generators such as Dominion Resources (D) Inc. and Exelon Corp. in their operating regions. That’s because wind energy undercut power prices already driven to 10-year-lows by an abundance of natural gas.
The wind power boom has benefited consumers in regions where wind development is fastest, contributing to a 40 percent wholesale power-price plunge since 2008 in the Midwest, for example. Yet the surplus is creating havoc for nuclear power and coal generators that sell their output into short-term markets.
Continue reading “Renewables Changing the Math of Energy Grid”








