WIND SAVES MONEY FOR RATEPAYERS – STUDY

With more wind energy, PJM could save customers $7 billion per year

Jeff Postelwaite, May 9, 2013 (Electric Light & Power)

“The PJM Interconnection could save its customers $6.9 billion if it more than doubled the amount of wind energy it currently plans to build…according to a [new] study…By the end of 2012, about 3.4 percent of PJM's total installed capacity was generated from wind. Over the next 13 years, with the advent of renewable portfolio standards, states within the PJM system will expand their wind energy capacity to 11 percent of their total installed capacity…

“…Production cost efficiency gains from improved average wind resource performance (from a portion of wind resources sourced from the higher-performing MISO region) are roughly offset by the increased transmission costs to deliver those resources to PJM…PJM carbon emissions in the wind scenarios are 14 percent lower than base case emissions…[which] include the effect associated with retiring roughly 58 GW of coal-fired plants in PJM.”

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“Load-weighted average annual energy market prices…for the PJM zones in aggregate are roughly $1.74/MWh lower for the wind cases, relative to base case prices. The price differences are greatest in the non-summer months, when wind output is highest, load is lowest and supply margins are greatest…The wind cases see more summer peak period energy from "peaking" fossil resources…[from] using economically optimal unit commitment and dispatch while respecting fossil-fuel plant operating constraints and the time profiles of wind output.

“If all production cost efficiency gains flow to consumers based on consumers paying the annual revenue requirements for incremental wind installed in the PJM region, then consumers are clearly much better off economically with increased wind resources, relative to a base case with less wind and more gas…Increasing the amount of "PJM wind" that is sourced from further west regions…leads to incrementally greater wind performance and higher production cost efficiencies. These savings are roughly offset by increased transmission costs…[and would further reduce] PJM carbon emissions…”

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