Wind on the Wires1 - Smart Grid (R) Evolution: Electric Power Struggles - page 147

Resource (LaaR) - and curtail their demand. Later analysis of the event by the National
Renewable Energy Laboratory (NREL) highlighted that it could have been avoided with
better wind generation information, more accurate demand forecasts, and better scheduling
of conventional units. While this event was resolved in less than two hours, it garnered a
great deal of media attention - even though similar system incidents which did not involve
wind received scant attention (Ela and Kirby 2008 ). This situation highlighted the need
for integrating sophisticated weather predictions into ERCOT's system management; this
integration is considered by some to be a key part of smart grid. Additional refinements to
grid management have helped to avoid this type of event, even as installed wind power has
grown.
When wind power is on the system, it displaces other generators. While most of the
analyses in Texas highlight that additional wind on the grid displaces combined cycle gas
turbines, periods of high wind and low load could affect coal or nuclear generators too.
The PUCT specifically highlighted these considerations with regard to nuclear generators,
which cannot easily be ramped up and down (Public Utility Commission of Texas 2009 ) .
While policies to promote wind and ensure adequate transmission have been crucial,
the larger economic context has been equally important in developing wind power for the
Texas electricity industry. The marginal prices in the deregulated Texas electricity market
are set by electricity produced from natural gas. As natural gas prices more than doubled
from 2000 to 2009, the marginal cost of electricity in the ERCOT system also increased.
With its policy support and transmission access, wind power became an economically
viable - and profitable - resource. By 2007, more than 4,000 MW of wind power had
been installed in Texas, two times greater than the original RPS goal for 2009. The Texas
legislature revised the state's RPS upward, setting a target of 5,880 MW by 2015 and
10,000 MW by 2025. Both of these goals were surpassed by 2013. While installed capacity
surged and lurched with the expiration and extension of the PTC in 2000, 2002, and 2004,
it then increased steadily until 2013.
6.5 Upper Midwest: Wind and Transmission
Unlike Texas, where electricity transmission can be negotiated primarily among actors
within the state boundaries, in the Upper Midwest the transmission grid connects with
multiple states. Wind resources are linked by long-distance transmission lines to electricity
demand centers in neighboring, or more distant, states. This makes large-scale wind
development dependent on new institutional arrangements to facilitate interstate
transmissionplanningandcostallocation.Inthiscasestudy,weexaminetheshiftingpolicy
and institutional environments shaping wind and grid development in the Upper Midwest,