UK Wind Boom Spikes Prices, Threatens Plants: Study
Date: 02-Jul-09
Country: UK
Author: Nigel Roddis
An aerial view of a wind farm near Middlesbrough, northern England December 18, 2008.
Photo: Nigel Roddis
LONDON - The dramatic growth in wind turbines around the British Isles may lead to huge spikes in power prices by 2030 and threaten the viability of backup plants needed for calm periods, according to Poyry Energy Consulting.
Britain and Ireland have ambitious targets to reduce their carbon dioxide emissions, with wind turbines expected to reduce most of the climate warming gasses from the power sector.
But the level of wind energy envisaged will lead to extreme price swings by 2030, with times of negative prices when the wind blows hard and spikes to almost 8,000 pounds per megawatt hour when the wind drops, according to a new study by Poyry.
The price volatility casts serious doubts on whether the current power market mechanisms will ensure investment in the plants needed as back up, with the UK market even less able to cope with the wind power boom than Ireland's.
"If significant wind energy is achieved ... we predict power stations which are built now will face much more uncertain revenues in the future," the report says.
"Uncertain to the point that plant may only operate for a few hours one year and then hundreds of hours the next year."
After studying extremes of low and high wind from 2000-2007, Poyry found output varied even annually by almost 25 percent in the Irish market and 13 percent in Britain.
Britain could need 35-45 gigawatts of wind turbines to be installed by 2030 to meet longer term emissions cut targets, while Ireland's wind power capacity could reach 8 gigawatts.
"Our worry at the outset of the study that the very dynamics of variable wind output would challenge the system operators, has moved to concern that the economic environment for thermal plant will be highly challenging," principal consultant James Cox said.
Using data for January 2000 to mode conditions in 2030, the study found electricity demand soared on frosty nights when there was almost no wind to turn turbines.
When winter temperatures rose in strong, relatively mild south-westerly winds there was less need for electricity but almost full wind generation output.
EDF Energy warned that keeping the lights on during cold, calm days in winter and keeping up with cooling demand on hot, still days in summer would require utilities to make huge investments in plants on shaky economic grounds.
"Keeping this backup plant available will be expensive and would have an impact on customers' bills," EDF Energy said.
"The result could potentially be a reduction in the security of supply standards we enjoy today."
The 8,000 pounds/MWh spike is nearly 10 times the highest levels in the UK power market seen in 2008.
For the full report click here: here%20Public%20Report%202_0.pdf
(Reporting by Daniel Fineren)
