Prepared by Kansas Chapter, Sierra Club 9-15-2006
Introduction. Electric utility companies serving Kansas communities have been reluctant to commit to the purchase or installation of a significant amount of wind power in the state. Instead, all major utilities have plans to build new coal-fired power plants (Click Here for the Status of Kansas Coal Plants).
As a result, Kansas has fallen substantially behind other states in the Midwest and Plains states in taking advantage of our vast wind resources. (Click Here for the Wind Rank Table). If nothing is done to correct this situation Kansas ratepayers will see billions of their dollars in future years flow out of the state to purchase coal and natural gas from other states.
Kansas electric utility companies generally give three reasons why they don’t use more wind power. First, they say wind turbines usually operate below rated capacity, and it is cheaper to burn Wyoming coal. Second, they say wind power is too unreliable for their needs. That is, wind power output may not be sufficient when they need power the most such as during summer heat waves in their service areas. Third, they say that there is insufficient capacity in the transmission lines in many parts of Kansas where the wind resource is greatest.
Cost of Wind Power vs Burning Coal. Variations in wind velocity sometimes cause wind turbines to operate below rated capacity. At good sites in Kansas the average capacity factor of new wind farms is 40% or more. That is, on average, a wind farm will produce 40% of the power that could be generated if the wind turbines operated at 100% of rated capacity all the time. The comparable figure for coal fired power plans is about 80%.
However, cost comparisons take these figures into account, and wind power at the very best sites is still reasonably competitive with the cost of a new coal plant. If the federal Production Tax Credit (PTC) for wind farms is taken into account, wind power is significantly cheaper than burning coal assuming that transmission costs are reasonable. The PTC was reauthorized through 2007 and is likely to be renewed again.
Critics say that if wind power were really competitive it wouldn’t need to be subsidized by the PTC. Actually if the true costs of burning coal were being taking into account, including damage to the public health and environment from tropospheric ozone, fine particles and global warming, then the PTC would not be necessary. Furthermore the mining and transport of coal requires vast amounts of diesel fuel and thus benefits from the myriad of subsidies underlying the use of petroleum.
Utilities may claim that wind power is more expensive than their current average electricity production costs. But that is comparing apples and oranges. Kansas utilities’ “fleets” of generating assets consists of base load coal-fired plants (and one nuclear plant) built prior to the early 1980’s. After that they built a number of natural gas fired generating units that are designed to meet heavy demand such as during hot summer days. Thus their coal plants were built long ago with fewer pollution controls at a much lower cost. For example Westar has said its average cost is only 1.5 to 2 cents per kwh.
In the meantime the cost of natural gas has tripled, so the utilities’ newer plants are now very expensive to run. Further, the cost of buying and shipping Wyoming coal has increased substantially in just the past two years. A big advantage of wind power is that there is no fuel cost. Thus once a wind farm is built, the cost of operating it is pretty much set for the life of the facility.
Intuitively it makes a lot more sense to generate wind power in western Kansas and send it eastward on transmission lines as opposed to consuming huge amounts of diesel fuel so locomotives can haul tens of millions of tons of coal, every year, 500 to 800 miles to points in Kansas. Then the coal cars have to be hauled empty back to Wyoming!
The real issue is how does the cost of power from a new wind farm compare to power from a new coal plant taking into account reliability issues that will be discussed below? Secondly, how much of the high cost of natural gas from existing generating units can be avoided when power is being generated by wind farms? A recent study indicated that wind farms in western Kansas would have performed quite well in 2003 when the weather was very hot in Kansas City (capacity factor 60% + on average). That means wind farms could pay for themselves by displacing the use of expensive natural gas now being burned meet intermediate and peak power demand.
Reliability of Wind Power. Kansas utilities say that wind power may not be available when they need it the most, and the natural variability of output causes problems in maintaining the grid.
The wind industry responds that temporary declines in wind generation can be reasonably well predicted in advance and compensated for by other sources on the grid, such as gas fired “spinning reserve” or by purchased power. In other states and countries where a significant amount of wind power is in operation, studies have shown that wind turbine output can be readily incorporated into the grid with careful coordination of generation assets. The Utility Wind Integration Group recently issued a summary of such studies that concluded that there are no fundamental technical barriers to wind power penetration of up to 20% of system peak demand.
Kansas utilities say that wind power is a less valuable form of electric power output because they are required have reliable generating capacity 12% in excess of peak demand. They think building new $1.5 billion coal plants is the best way to achieve that degree of reliability. They don’t say, however, that there are several other ways to achieve that same goal.
First, they can use natural gas-fired generating units that can be quickly brought on line to meet surges in demand from heat waves. In fact all of the Kansas utilities already own a number of such units, and they sit idle much of the time. When they are used, however, fuel costs are very high. As shown in our wind study, these units would rarely need to be used if they invested in wind power. On average, wind turbines in Kansas would perform quite well during the same periods when natural gas fired capacity would normally be used.
Secondly, utilities can purchase contracts for firm power capacity from other producers. Thirdly they can mount an aggressive energy efficiency campaign with their industrial, commercial and residential customers to reduce electricity usage in the summer. In fact it has been shown that it’s cheaper to save energy in the service area than to add new generating capacity
The utility industry also doesn’t mention that coal-fired power plants aren’t all that reliable either. In 1998 KCP&L’s 500 MW Hawthorne No. 5 coal-fired power plant in Kansas City experienced a boiler tube failure and was out for 78 days. In February of 1999 this same plant’s boiler exploded and the whole plant was down for 2 years and four months. That means this power plant had a zero capacity factor for 28 months. On Aug. 29 of 2005 Hawthorne No. 5’s main transformer failed and the plant was down again for 32 days. The company made up for these losses by using other generating units they own, or they bought power off the grid. Same as they would to replace wind power when the wind wasn’t blowing.
So what makes the most sense for both the ratepayer and the environment? Shoot a fly with a cannon and seek reliability by spending $1.5 billion on a new coal fired power plant? Or work smarter by achieving greater efficiency in use of electricity and rely on a combination of wind power and, on just a few days per year, purchased power and natural gas-fired generators.
Furthermore, the more wind farms that are built in Kansas and in neighboring states, the more facilities we’ll have where the wind is blowing in one part of the state or region to make up for lack of wind at another location. Of course this diversification benefit cannot be achieved if Kansas utilities fail to take wind power seriously.
New, near-term technology is in the pipeline that will eliminate any lingering problems with the intermittency of wind power. First is the use of wind power to make hydrogen that either can be stored locally or used in place of natural gas. Secondly photovoltaic cells produce solar power in fairly close symmetry with air conditioning demand in the summer, and costs are declining rapidly. As solar power use in home and building construction increases, its output will fit nicely with that of wind farms.
Need for Transmission Lines. This is indeed a very serious problem. But the utility companies are traditionally the parties who finance and build transmission lines. So if there is a shortage, they are the ones best equipped to do something about it, and they aren’t.
In the 2005 legislative session the Kansas Chapter’s Legislative Director, Charles Benjamin, worked very hard to help create the Kansas Electric Transmission Authority. KETA has the power to finance new transmission lines if the utility companies don’t. It is critical that KETA quickly facilitate the construction of new transmission lines in the state so all citizens can benefit from our vast and valuable wind resources.
Final Notes. Up to now we have been discussing utility scale wind power issues. There’s also community scale wind power which generally means wind farms smaller than 20 megawatts that serve specific municipalities, agricultural coops or schools. These projects may need to rely, in part, on transmission lines owned by Kansas utilities. But as explained on page 5 of the April/May 2006 issue of the Planet Kansas, utility companies have been of no help in this initiative either.
The failure of our country to institute strong electric power efficiency measures, and an unwillingness to exploit renewable energy resources will eventually lead to the construction of hundreds of coal-fired power plants. This would cause the US (and Kansas ) to become much less competitive in the world economy. We are already highly vulnerable because of our dependence on foreign sources of petroleum.
In the final analysis, however, we just can’t afford to build any more coal-fired power plants. A strong consensus now exists that global warming is a very serious and growing problem and most certainly will threaten the future of our children and grandchildren. We will be judged harshly for our failure to act.