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Texas power suppliers facing wind challenges

A doubling of wind-generated electric capacity anticipated in Texas by 2015 will alter operations of every power plant in the state, industry sources said on Wednesday. The rise in wind to an expected 18,500 megawatts of installed capacity will force aging, natural gas-fired power plants to shut, limit output at times from coal-fired plants and create a need for nimble, simple-cycle gas plants that investors are wary to build in the current market, said members of an industry panel at the Gulf Coast Power Association conference.

AUSTIN (Reuters) - A doubling of wind-generated electric capacity anticipated in Texas by 2015 will alter operations of every power plant in the state, industry sources said on Wednesday.

The rise in wind to an expected 18,500 megawatts of installed capacity will force aging, natural gas-fired power plants to shut, limit output at times from coal-fired plants and create a need for nimble, simple-cycle gas plants that investors are wary to build in the current market, said members of an industry panel at the Gulf Coast Power Association conference.

"There will be epic changes," said Dan Jones, director of the independent market monitor for the Electric Reliability Council of Texas (ERCOT), the state's primary grid operator.

By 2015, more than 2,300 miles of new transmission lines will be built to move the abundant wind resource in West Texas and the Panhandle region to power-hungry cities like Dallas and San Antonio.

But because wind patterns don't match consumer power use the grid operator and other generators will have to adapt to integrate wind-farm output to avoid problems that could lead to blackouts.

On an annual basis, 60 percent of the wind production will occur when the... more [truncated due to possible copyright]  

AUSTIN (Reuters) - A doubling of wind-generated electric capacity anticipated in Texas by 2015 will alter operations of every power plant in the state, industry sources said on Wednesday.

The rise in wind to an expected 18,500 megawatts of installed capacity will force aging, natural gas-fired power plants to shut, limit output at times from coal-fired plants and create a need for nimble, simple-cycle gas plants that investors are wary to build in the current market, said members of an industry panel at the Gulf Coast Power Association conference.

"There will be epic changes," said Dan Jones, director of the independent market monitor for the Electric Reliability Council of Texas (ERCOT), the state's primary grid operator.

By 2015, more than 2,300 miles of new transmission lines will be built to move the abundant wind resource in West Texas and the Panhandle region to power-hungry cities like Dallas and San Antonio.

But because wind patterns don't match consumer power use the grid operator and other generators will have to adapt to integrate wind-farm output to avoid problems that could lead to blackouts.

On an annual basis, 60 percent of the wind production will occur when the state's power need is below 30,000 megawatts, or less than half that used during the hottest afternoon in the summer, Jones said.

That means when wind generation is high, coal plants and even nuclear generation would have to be pared, according to power models that dispatch power in the most economical manner.

Projections also show that in 2015 non-wind generators will need to react more often to dramatic, real-time changes in wind generation, by quickly increasing or reducing output to keep overall supply and demand in constant balance.

The state currently has few gas "peaker" plants to fill that need since peakers run only in times of high demand and are only profitable when power prices skyrocket.

"We don't see the incentives we need to build the flexible gas capacity we will need," said Mark Walker, director of regulatory affairs for NRG Energy, the state's second-largest power producer that uses a mix of nuclear, coal, gas and wind generation.

Even with six new coal units planned or under construction and two proposed nuclear units, some in ERCOT worry that the pressure on wholesale prices from additional wind generation will deter investment in new gas plants in the years to come.

Not only will ERCOT need to carefully calculate the region's power reserves in the future, but whether "we have the right units," said Brandon Whittle, a vice president of Deutsche Bank's energy trading unit who follows Texas regulatory issues.

In other U.S. power markets, capacity payments are required to encourage power-plant investment, but Texas regulators have rejected use of a capacity market, instead relying on energy price volatility to signal that new generation is needed.

While a capacity market is "not ideal," Austin regulatory attorney Marianne Carroll said the current ERCOT market design and low wholesale prices creates a risk that power-plant developers will not be able to recoup their investment in Texas and will choose to invest elsewhere.


Source: http://www.reuters.com/arti...

OCT 7 2009
http://www.windaction.org/posts/22546-texas-power-suppliers-facing-wind-challenges
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