No Advantage from Importing Land Based Wind Power into PJM

Last week, several Web sites publicized a report that Synapse Energy Economics just published.  The report was the result of a study that PJM Interconnection commissioned to study the impacts of several different levels and sources of wind power on electricity prices in PJM, through 2026 when most state renewable portfolio standards in PJM will expire.

The study compared three scenarios: one in which renewable power penetration, primarily wind power, was limited to the targets set by state RPS targets, one in which wind penetration was more than twice the RPS targets but with all wind power generated from within PJM’s region, and a third scenario with the same level of wind penetration as the second scenario, but with 6000 MW of capacity coming from imports of land based wind power from outside PJM, from the Midwest.

Articles about the study hailed the fact that in the three scenarios, the more wind power was added to the model, the cheaper wholesale electricity prices in PJM fell.  If you have been reading The Power Line, you know that this is not news.  As I reported here, this change is happening in the real world, right now in Germany.  We don’t need any models to show us that when installed renewable power capacity reaches a certain level, electricity prices fall.

The importance of the Synapse study lies in what it tells us about land based wind power as opposed to offshore wind power.

In all three scenarios, Synapse assumed that PJM would use 4000 MW of offshore wind power capacity.  But then, on page 23 of the report .pdf (as opposed to the report page number) Synapse published the results of a “sensitivity analysis” which is essentially a fourth scenario in which 5000 MW of offshore wind capacity is substituted for the 6000 MW of wind power imported from the Midwest in the third main scenario.

This increased offshore wind power analysis shows that the net savings, compared with just meeting RPS targets (scenario 1), would be $5.9 billion by 2026.  This compares with savings of $6.9 billion by 2026 from scenario 3 which imported 6000 MW of wind power capacity from the Midwest.

There are several interesting aspects of the increased offshore wind power analysis that should be noted:

  1. On .pdf page 14 of the report, at the bottom of Table 3, you will see a list of capacity factors that Synapse used in their modeling.  Capacity factor is simply the percentage of time that a generator actually provides electricity to PJM.  Wind power generators have relatively low capacity factors, because wind does not blow all the time.  Synapse projected that PJM only wind generators would have a total capacity factor of less than 40% over the period ending 2026.  The authors projected a slightly better capacity factor from Midwest generators imported into PJM, because wind resources are a little higher quality in the Midwest.  But the highest capacity factor was allocated to offshore wind producers at 45%, because the wind resource off the Mid-Atlantic coast is so superior to any land based resource.  You can see this readily on that old 2006 DoE wind resources map.
  2. If you look at the sensitivity analysis Table 12 on .pdf page 23 of the report, you will see the following entry in the table:  “5 GW additional offshore wind, PJM Mid-East and PJM-South locations; 6 GW less onshore wind buildout; 1 GW less CT resource buildout; small change in timing of CT and CC additions in later years (2020+)”  This means that adding 5000 MW (same as 5 GW, there are 1000 MW, or megawatts, in a GW, or gigawatt) will replace 6000 MW of imported wind power.  Here’s why – because offshore wind power has a higher capacity factor, PJM will not need the extra 1000 MW of gas fired power plant capacity (CT means “combustion turbine” and CC means “combined cycle”) that is required to fill in for the lower capacity factor land based wind power.  Because the wind blows more often offshore, PJM also needs less gas fired power for backup.
  3. In the Synapse model, increasing the amount of offshore wind in the sensitivity analysis did reduce the calculated savings of added wind power by $1 billion.  But this $1 billion difference is derived only within the limits of the model’s assumptions.  There is a big difference between building new transmission to carry distant wind generated power into PJM and actually building new offshore generating capacity in PJM.  Not only that, but if you generate that power offshore, you actually save building transmission capacity for electricity imports from an extra 1000 MW of imported capacity.  And this doesn’t even count the permanent indirect economic impacts of manufacturing and fabrication from the offshore wind buildout as projected in this recent US Dept. of Energy study.

The Synapse authors essentially say the same thing at the bottom of .pdf page 23:

The results of the sensitivity run illustrate that significant net benefits still accrue to a scenario with more offshore wind, but the overall net benefits are not as great as seen in the onshore wind scenario. This is driven primarily by the higher capital costs of the offshore wind. We do note though that there are synergies between the level of offshore wind development, and the level of increased transmission need beyond the RPS overlay that we have not captured in this sensitivity run that could have the effect of making the higher offshore wind case closer in net benefits to the onshore wind case. To gauge the level of required transmission in a reduced onshore/increased offshore case, additional model iterations would be required to assess if lower transmission investment (onshore) would result in acceptable levels of congestion and/or curtailment of onshore wind.  Further analyses are required to test this. Also, while 5 GW of offshore wind is a sizable increment above the base case level of 4 GW of offshore wind, we understand that PJM is analyzing “high offshore wind” cases with much higher levels of offshore wind.  Such increases could lead to significantly lower onshore transmission buildout requirements. [emphasis mine]

If you want to see transmission impacts in PJM from similar wind power scenarios, you should take a look at this power point presentation from the PJM TEAC (Transmission Expansion Advisory Committee) meeting in late 2012.  For each scenario, you will see a map of the location of projected generation capacity followed by a map of PJM’s projected transmission problems as a result of new power flows in those areas.  Note that in none of these projections are there any substantial congestion or reliability problems.  And I thought PATH was supposed to be a green power express.

PJM projects that there will be some transmission upgrades AND NEW LINES in some areas, mainly in IL, NJ, MD and PA to accommodate new power flows from increased wind generation near the boundaries of either offshore wind connections or Midwest wind import connections.

The transmission needs shown on PJM’s 7 GW offshore wind scenario show clearly why offshore wind development makes the most sense for all of PJM.  Right now, the most congested load zones in PJM are in MD and NJ.  It makes sense, as we have said since PATH was first proposed, for the people with the problem to pay for new transmission needed to solve the problem.  With offshore wind, MD and NJ produce their own new electricity and do their own transmission upgrades to deliver that power, over very short distances, to their homes and businesses.

And now the Synapse report provides another demonstration of why that makes so much sense.

Why didn’t “green” media outlets who reported on the report see that as well?  Could it be that they have swallowed too much of the AWEA propaganda pumping up new transmission lines for land-based wind power?

2 thoughts on “No Advantage from Importing Land Based Wind Power into PJM

  1. I will say again: The problem with the wind industry, as embodied in AWEA, is that it wants to become “Big Wind,” replacing “Big Coal.” I would like to think that citizens (if not governments) have learned that Big Anything is generally a bad idea for the public.

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