BPA releases plan to reimburse wind energy producers (for unneeded production!)

The Daily News ^ | Feb 8, 2012 | Andre Stepankowsky

[epithermal]

The federal agency that sells and transmits most electrical power in the Northwest has proposed a plan to cover half of wind producers' lost revenue when they're forced to shut down wind farms during periods of excess hydropower production.

The plan would affect Cowlitz PUD, which owns interests in two Central Washington wind farms, but would not lower or raise rates significantly, PUD officials said.

"This is not going to do anything that would appear to be a rate-driver," PUD spokesman Dave Andrew said Wednesday.

Over the objections of wind energy producers, the federal Bonneville Power Administration last spring ordered wind farms to shut down to avoid overloading the region's transmission system. Abundant spring runoff in the Columbia River Basin produced too much hydroelectric power for the grid to handle. Since then, the wind power industry has been demanding compensation.

The plan BPA announced Tuesday would not be retroactive to last spring but would cover the period from 2012 through 2015 — should wind farms be ordered to shut down again.

BPA estimates the cost of the plans could range up to to $50 million a year and average $12 million a year, depending on spring runoff conditions. Major customers, such as public utilities, aluminum producers, and federal installations, would face higher rates to cover the costs of the plan, BPA officials said.

For Cowlitz PUD, the proposal is a double-edged sword: The utility is a wind-energy producer, but it's also a BPA customer. So, under the BPA plan, the utility would get compensated for lost wind energy production but then possibly face higher costs for power purchases from the BPA.

[epithermal]

Huh? Green economics 101 - if you produce too much energy then prices go up

[hinckley buzzard]

Typical gubbermint boondoggle--now we will pay some greenie weenie outfit NOT to produce energy. Like the Dept of Agriculture paying farmers not to grow wheat.

[DBrow]

This would seem to be an opportunity for entrepreneurship. Where there is excess electrical energy, capture that energy in electrochemistry, hydrogen production, pumped storage, plating.

I agree with your take- if the supply goes up, costs should come dwn, not be artificially “stabilized” to protect some investment that was, probably, 90% tax funded anyway.

[TLI]

if you produce too much energy then prices go up

Apparently so.

If you are up to your eyeballs in crude oil and gasoline consumption is falling like a stone then of course we see the near record prices we have right now.

Everybody knows a overstocked product's price will go up, not down, right?

.

[BobL]

Paying wind energy producers when the wind isn’t blowing will help them become economical. Yea, right.

[epithermal]

Its the cart before the horse as I see it. The grid needs to be worked on first.

But really it came down to the state of Washington denying hydropower a renewable classification to meet the requirements of the 2006 law. The utilities with no need for additional renewable still have to comply with the law.

You make a good point that all that unused power is attractive. I know they are locating a lot of server farms in Washington counties with cheap hydropower. I wonder if you could just as easily build them at the windmill sites?

[epithermal]

Good point. I wonder if there any true free markets any more?

[Recon Dad]

Only in America! We have the laws of nature.

I bet you can guess how many windmills would be in business if they were made to stand on their own in the free market.
(stand on their own....winds mills, nice visual imagery)