How RECs Can Save Wind
A wind developer contemplating a project in New York laments that the project must be put on hold due to electrical power prices currently at an all-time low because of oversupply of natural gas. See www.windaction.org “Galloo Island Wind Farm "on hold" for at least six months; low price of electricity cited “
At some point, the electricity produced from wind has to enter the market and is subject to the current market price. Sometimes, the developer acquires a power purchase agreement with a utility or supplier at a price that provides a hedge against sudden decreases in market pricing. In this case, the utility or supplier gets caught in a losing proposition, and, most likely, will look to the ratepayers for a bailout.
Believe it or not, sometimes buyers of wind power, when caught in this situation of low market prices, finds help from entities who are normally considered “ the watchdog for the ratepayer “
A study commissioned by the Maine Public Utilities Commission undertaken by London Economics International reveals some interesting thoughts on the Renewable Portfolio Standards adopted by 5 New England States. The survival of wind power just might be within the mechanisms designed in these RPS.
Have you heard about RECs ( Renewable Energy Certificates ) ? They play a big part in the advancement of wind power. Anyone selling electricity within states with a RPS is mandated to acquire and sell a set percentage of renewable power, mainly supplied by wind projects.
So, basically, wind receives income by way of the market, by way of RECs, and, by way of the Federal Production Tax Credit, which are determined by “ Megawatt/ hours “ of production.
If the income from the market goes down or the PTC is decreased or eliminated, the RECs are left to bring income back to foster investment. The PUC determines the upper limit for the REC price with what they call ACP ( alternate compliance payment ). A low ACP or a zero ACP, which is in line with the free market approach, hurts wind. A high ACP can be a great aid to advancing wind. A high ACP also adds to the ratepayer’s bill.
The London Economic International study indicates the developer’s cost for new on-shore wind is $109 per megawatt/hour.
Currently, the market average price is around $33 per megawatt/hour. The PTC pays
$22 per megawatt/hour. The ACP price set by the PUC is about $62 per megawatt/hour.
The PUC has the power to reset the price for ACP.
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Comment
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Comment by Frank J. Heller, MPA on July 8, 2012 at 12:25pm
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BIG BROTHER NOW CONTROLS YOUR ENERGY USAGE!
"In June 2010, for example, a violent storm in the Northwest caused a simultaneous surge in wind power and in traditional hydropower, creating an oversupply that threatened to overwhelm the grid and cause a blackout.
As a result, the Bonneville Power Administration, the wholesale supplier to a broad swath of the region, turned this year to a strategy common to regions with hot summers: adjusting volunteers’ home appliances by remote control to balance supply and demand.
When excess supply threatens Bonneville’s grid, an operator in a control room hundreds of miles away will now dial up a volunteer’s water heater, raising the thermostat by 60 more degrees. Ceramic bricks in a nearby electric space heater can be warmed to hundreds of degrees.
The devices then function as thermal batteries, capable of giving back the energy when it is needed. Microchips run both systems, ensuring that tap-water and room temperatures in the home hardly vary.
“It’s a little bit of that Big Brother control, almost,” said Theresa Rothweiler, a teacher’s aide in the Port Angeles, Wash., school system who nonetheless signed up for the program with her husband, Bruce, a teacher." http://www.nytimes.com/2011/11/05/business/energy-environment/as-wi...
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This is onlyone part of the problem... the other is the cost of new transmission lines, and expanding old ones.
I wonder with the spate of violent weather, insurers and investors are having second thoughts? How long were wind farms in the line of tornados, thunderstorms, etc. shut down and what damage occured? Any one watching??
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Comment by Kathy Sherman on July 8, 2012 at 11:17am
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Thanks for update on REC prices. In Massachusetts, rate-payers get to pay twice - into the Renewable Energy Trust for funds to develop "community", semi-public and private wind projects, and for the RECs. Massachusetts Tier 1 RECs were the highest in the nation according to Corporate_Renewable_Energy_Index_2011 (CREX, by Vestas/Bloomberg New Energy Finance) at about $40/MWh when a corporation that wanted to be "green" paid at most $3.5 and as little as $0.6/MWh. About a year ago, Hull Municipal Light Plant took the offer of $20/MWh stating that the market value was $10/MWh. The Municipal Utilities in MA serve all rate-payers and are not required to pay into the Renewable Energy Trust (or energy efficiency), yet they receive a great deal of beneficence from it to develop their projects which then earn RECs to benefit all their rate-payers. Mass Clean Energy Center and our regional aggregator CVEC or Cape Light Compact, it is not clear which, have contracts of $45/MWh for the Falmouth MA municipally-owned Wind 1 turbine which has disrupted the health and well-being of more "neighbors" per turbine than any I have heard of. More than being concerned that the high REC rates are unfair to rate-payers of utilities, along with the costs of interconnections and net-metering, I am concerned that they encourage irresponsible siting and continued operation of turbines which are out of compliance and severely impacting health. As with Vinalhaven, it is even more divisive when it is a "community" turbine, and the turbines now operating in Fairhaven and Kingston MA are billboards to say "climate change is coming", the sky is falling & here's how we'll hold it up. Distributed generation is promoted to get people in touch with where their electricity is coming from. I would rather unplug than get mine this way - trite, but something needs to be done to protect not just our own communities but to redress the wrongs in Mars Hill, Vinalhaven and Falmouth. Plus, as our friends in Maine point out, wind and solar are going to the benefit of those heat-islands that line the I-95 corridor. It is my understanding that the taxpayer also gets screwed again since those that purchase "green" (REC-based) electricity can deduct anything more that they pay for it.
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Comment by Gary Campbell on July 8, 2012 at 8:48am
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And keep in mind that in Maine:
1) David Littell, Chairman of the PUBLIC Utilities Commission is also the Chairman of the Regional Greenhouse Gas Initiative (RGGI) which is responsible for marketing these RECs.
2) Pattricia Aho, Commissioner of the DEP, serves on the board of the RGGI, so she is not only deciding wind permits but also helping market the RECs.
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Comment by Thinklike A. Mountain on July 8, 2012 at 8:22am
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This is a dirty industry that operates in the shadows hiding behind a veneer of saving the planet. The media have been very complicit in keeping the people uninformed and misinformed. Academia has blindly lent their support with some piling on in the hopes of getting grant money to parasitize. And the sellout environmental groups have lent their support while taking big money from the wind industry. The average citizen has been completely misled on the travesty that is wind scam. Perhaps people will start paying attention and demand action if the effect of wind were spelled out for them on their electricity bills.
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Comment by Hart Daley on July 8, 2012 at 8:12am
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JUST ANOTHER BAILOUT!! Why on earth should we, the ratepayers, be forced to bail out wind companies with our tax dollars because THEY can't compete in the national market due to their inefficient / costly energy machines? Doesn't it make sense that we, the ratepayers, would want to acquire the lowest priced energy/ electrcity available? Whose pockets are getting padded at our expense...many many many corrupt politicians and companies. Let's all work together, fight together to end this madness.
Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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