Wind on the Wires1 - Smart Grid (R) Evolution: Electric Power Struggles - page 159

tensions are having an impact on the development of wind power and smart grid in
Germany.
6.7 Future of Wind and Smart Grid
In this chapter, we have explored the interactions and dependencies between development
of wind power and smart grid in three different regions. In each of these areas large-scale
wind power has been changing the electric system planning, operation, and politics and
smart grid development has been intricately linked with wind integration. The locus of
control for developing wind power has shifted from turbine developers to policymakers,
electric utilities, grid operators, and around again. The growth of wind power has forced
the energy system to evolve in new ways. It has changed the planning, financing, and
operation of the transmission grid and simultaneously forced the development of a smarter
grid. Integrating wind into the electric system requires operators to use detailed weather
information and new control systems to manage resource variability.
While the past decade of large-scale wind development in the United States was spurred
by state Renewal Portfolio Standards (RPSs), it was also shaped by outside factors and
technology developments. In Texas, wind power initially enjoyed a comparative cost
advantage to other generation resources. This cost advantage has been eroded by low
natural gas prices due to shale gas development using hydraulic fracturing, which has
caused natural gas prices to plummet from $9-13/thousand cubic feet to $3-5 per thousand
cubic feet. In the MISO region, state RPS mandates and goals initially spurred wind
development, but the strong wind resources have made wind power a cost-competitive
resource. Thanks to new smart grid control systems in the MISO region, wind bids directly
into day-ahead electricity markets and is automatically controlled when it is needed. In
Germany, the Energiewende continues to drive both onshore and now offshore wind
development, but parallel federal policies to facilitate transmission-line development are
also crucial to alleviate wind integration challenges.
In each of these cases, the control of wind on the system has benefited different
parties, from wind developers to energy consumers. Additionally, large-scale renewables
integration has impacted electric system economics and shifted traditional electric system
boundaries in unanticipated ways. Creating large-scale wind power has affected incumbent
actors in unexpected ways, too. In Texas and the Upper Midwest, wind power has lowered
the cost of energy to the entire system, but the additional transmission costs have not been
cheap. In Germany, the recent losses posted by traditional utilities highlight just how much
renewables like wind and solar have shifted the economics of the power grid. Utilities