This means wasting a significant percentage of wind generation is still a net savings. Currently curtailment aka excessive wind production is relatively low percentage of generation, but based on current prices it’s cheaper to build more wind just to offset more natural gas use.
You end up needing to pay for the generators either way. So, currently the breakpoint ends up being when 1/2 of all wind power is wasted resulting in 2 x 10$/MWh your at breakeven with fuel costing $20/MW-hr.
However, current natural gas prices are market driven. Reduced demand will lower prices, but that’s still a net win for power companies. In the coming years as new wind power comes online the economic situation will change, but for now massive investments look like a very good deal.
Natural gas has negative pricing right now due to being stranded in production!
The article translated whatever the price was when they wrote it into 20$/MWh. I assume it’s still reasonably accurate as it was published yesterday and the price has been fairly consistent recently.
Just because there stranded natural gas exists doesn't mean the market prices are below zero.
They do make a statement, I think you might have missed this paragraph:
> That puts wind in an incredibly competitive position. The report uses an estimate of future natural gas prices that show an extremely gradual rise of about $10/MW-hr out to 2050. But natural gas—on its own, without considering the cost of a plant to burn it for electricity—is already over $20/MW-hr. That means wind sited in the center of the US is already cheaper than fueling a natural gas plant, and wind sited elsewhere is roughly equal.
The implication of this claim is that in operation it’d be cheaper to build both a gas plant and a wind farm, to reduce the amount of gas that you burn, rather than just building a gas plant. If that’s correct your discussion of intermittency wouldn’t be relevant.
> Wind is even cheaper at the moment because of a tax credit given to renewable energy generation. But that credit is in the process of fading out, leading to long term uncertainty in a power market where demand is generally stable or dropping.
Or from the government report itself:
> The magnitude of growth beyond the current PTC cycle remains uncertain, however, given declining tax support, expectations for low natural gas prices, and modest electricity demand growth.
So what is it? Is wind power cheaper or was that a tax subsidy effect?
Just on this point, the article talks about curtailment:
At times, strong winds can cause wind farms to produce an excess of power relative to demand, causing a farm's output to be reduced. This process, called curtailment, remained a small factor, with only two percent of the potential generation lost this way. Put differently, if the curtailed electricity had been used, it would have only raised the average capacity factor by 0.7 percentage points.
It sounds like 'short bursts' is really not a problem.
However now, in that case actually no renewable source of energy - wind, solar, geo thermal.. (other than perhaps hydro) can fulfill the need of sudden burst of energy - wind is like any other.
You would have to incorporate assumptions on lifespan, maintenance and/or amortization.
Wind or solar is actually often commissioned using a power purchase agreement for a certain price per kWh, guaranteed over a certain period.
This is currently HN's title, and the article's subtitle. But the article makes no statement to prove this assertion.
It does not even make sense to me. I guess the author meant that for firms that have high energy needs. But it is stupid to imply that the electricity provided by fossil fuel can always be replaced by wind turbines. If the need is for regular bursts, high volumes on short periods, wind won't be of much use.
Moreover, the article is a digest of a report that is less emphatic. The US Department of Energy expects a slow-down of wind capacity after 2020, once the tax credit will end. For a project that would start now, there would be no tax credit, so it would be hard to reach a competitive price.