It is a time of excruciating uncertainty for U.S. utilities. The generator fleet is aging, and the need to rebuild it is becoming desperate. The big question: what fuels will the new generators run on? The choices are coal, natural gas, uranium, and, believe it or not, wind and solar. Including wind and solar sounds like a bad joke to those who understand the value of dispatchable power. But it’s not a joke and most utilities aren’t laughing.
This is because of something called the renewable portfolio standard, or RPS. An RPS specifies that electric utilities generate a certain amount of electricity from renewable sources. Around 25 U.S. states have mandatory RPSs, another 5 have voluntary standards (according to the Pew Center). The implications of these standards vary depending on definitions of “renewable” and “certain amount.” But the upshot is that wind and solar, two marginal producers of electricity, have been elevated to a status well beyond their capabilities.
Why does this matter? Because if the 25 RPS states set tough targets for renewables, then meeting the targets would require significant parallel investments in conventional generation. This is because wind and solar are inherently intermittent: the wind does not blow all the time, and the sun does not shine all the time. Two thousand megawatts of wind generation capacity is useless when the wind is not blowing; a power system therefore needs two thousand megawatts of power from another source during that time. And it is hard to predict when the wind will blow.
If a specified RPS works out to 7,000 megawatts of capacity, as it does in the province of Ontario, this effectively requires parallel conventional generation capacity of 7,000 megawatts to cover whatever shortfall develops when the wind stops blowing. The latter must be the quick response kind, something power system operators can dispatch immediately. i.e., natural gas.
In Ontario, the official plan to double renewables means the province will also require thousands of megawatts of additional natural gas–fired capacity. This is why the main natural gas lobby group, the Ontario Clean Air Alliance, so strongly supports the plan to double renewables. The OCAA’s strategy echoes that of the now-discredited Enron (see article) as well as that of the newly resurgent Boone Pickens. Pickens’s call for massive investments in wind power from Texas to North Dakota is a clever strategy designed to ensure endless demand for natural gas. Pickens is, after all, a gas man.
Most people don’t realize that this will require a massive expansion in transmission capacity. Wind farms have to be connected to the grid, and we will need a lot of wind farms if we want 7,000 megawatts of wind capacity. This presents another problem. Just as generator fleets need to be renewed, so do the existing transmission systems all over North America.
So on top of this necessary expense, RPSs are now forcing an unnecessary expense.