Westar Energy Annual Report 2006

A candid assessment of wind energy's limited capacity credit (a.k.a. effective capacity), i.e. the utility industry’s standard for measuring a generating source's contribution to system reliability and peak demand

Selected Extract:


Policy Debate and Reality: Collision or Convergence?

Electricity plays an ever more essential role in every aspect of contemporary life. As a practical matter, any electricity policy that would degrade electricity's reliability or supply will fail. (emphasis added)

Many people assert that renewable sources of electricity, primarily wind and solar, coupled with conservation and efficiency, can eliminate the need for new coal or nuclear plants. In 2005, 9% , about 1 of every 11 kWh, of electricity consumed in the U.S. came from renewable resources. Total electricity generated in the U.S. in 2005 was 4,025 billion kilowatt hours. It is estimated that by 2030 electricity consumption in the U.S. will grow 44% to 5,788 billion kWhr. The EPA estimates that by 2025 conservation and efficiency can cut projected demand by 20%. As Figure 9 shows, even the leading forms of renewable sources of electricity were a tiny portion of installed U.S. generation capacity at the beginning of 2006. Perhaps this is why reliable cost information is elusive. However, even wind, which is identified as one of the lower cost sources, is about 5-8 cents per kilowatt hour- well above the 2.98 cents per kWh for Westar's coal-fueled generation in 2006. Figure 10 shows their annual capacity factor, that is, the amount they actually produce relative to what they would produce if they operated continuously at full capacity.

Figure 9, when compared with Figure 7, illustrates another important fact. Because conventional sources of electricity are generally more reliable than renewable sources, they account for a larger portion of actual energy production (fuel mix) than implied by their share of total capacity.

Now, while capacity factor is an industry-accepted measurement for reliability for most forms of generation, wind and solar present special challenges because regardless of how well maintained the plant is, it only produces electricity when the wind blows or the sun shines. For example, while a coal or gas fueled plant, even a plant fueled by biomass, can be predictably put in operation when need is highest, sufficient wind must blow to produce electricity with a wind turbine; a requirement beyond control of the operatior.(emphasis added)

Figure 11 shows the output of electricity from the two wind farms in Kansas that were operational on July 17, 2006, a day Westar Energy's customers set a record with their demand for electricity. In the early evening as the need for electricity rose, output from these wind farms dropped. Without other resources, residents would have come home in mid-summer heat without adequate energy to cool and light their homes or prepare evening meals.





Wr 2006 Annual Report

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APR 26 2007
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