Cheaper Electricity Rates Thanks to Wind Power

Before fossil fuels, wind was man’s major source of power for sailing ship, grinding grain, and pumping water. The beauty of ships and windmills were an endless source of inspiration for painters and photographers. Windmills were once the source of power for providing water in rural America and electricity rates in Tyler, such as the one (see below) in the picture with the giant wind turbines towering over it. Though some criticize the wind turbines for being unsightly, they have a majestic beauty of their own. Their real beauty is in their utility as, once built, there are no fuel costs or emissions. Much of the criticism of wind power has come from the fossil fuel industry, as it is hard to compete against a technology with no fuel costs and few regulatory problems.

Fossil fuels now have a near monopoly on providing energy, and consumers would benefit from more competition in that market. Fossil fuels have served us well and we will certainly need them far into the future – even to develop sustainable energy sources. But there is a trap if we wait too long, as the rising price of traditional fuels will also increase the cost of building the renewable sources, possibly leading to an energy shortage before renewable sources can make up the difference.

As the cost of building new coal fired plants has increased prohibitively, a number of US power companies have taken advantage of wind energy to increase the supply to their customers and lower their costs. Recently, AEP/PSO in Oklahoma was able to meet the demand caused by the heat wave in 2012 by bringing 200 megawatts (MW) of wind energy online. It recently planned to purchase 200 MW more, but took advantage of an opportunity to contract for an additional 600 MW of wind energy from facilities being developed in northwestern Oklahoma. AEP/PSO said the cost was now less than building new coal fired plants, and that the purchase will save an estimated $53 million in the first year and even more thereafter.

The declining cost of wind energy is making it competitive to natural gas as well. Wind contracts in Texas, about one quarter of all US installations, are now regularly below $30/MWh. Even with a tax incentive, this still puts wind well below $50/MWh, while the comparable cost for a new gas plant is above $60 /MWh. New design and siting where there are good wind conditions allows Texas wind farms to get capacity factors around 50%. Nearly half of that occurs during peak load, defying characterizations of wind as essentially an off-peak power source.

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