Wind not lifting wholesale power prices: report

An eight year study of South Australia’s electricity sector has found that large scale wind energy deployment has dramatically reduced carbon emissions.

The study, conducted by global wind energy development company, Windlab Systems, also found that the emission reductions were achieved without increases in wholesale electricity prices or the need for additional back-up generating capacity.

South Australia has installed large numbers of wind farms over the last eight years and about a quarter of the electricity consumed is now generated by wind.

Roger Price, the CEO of Windlab said, “This study is particularly timely and poignant. There is clear evidence that the common complaints made against wind energy are wrong. Wind power does not need continual ‘back-up’ and the costs are not onerous.”

The study indicates that in the last eight years, South Australia has more than quadrupled the amount of electricity that is generated by wind turbines. Between 2005 and 2013, the amount of wind generation capacity in South Australia grew from 388 MW to 1203 MW. Wind now makes up 24% of the state’s installed capacity. Wind also makes up 28% of electricity produced within the State. This indicates that the capacity factor of wind exceeds that of the system, a point that critics often fail to note. In 2014 wind turbines in South Australia will produce enough electricity to meet the annual electricity demands of every house in the state.

During this period of growth there has been little if any change in South Australia’s wholesale electricity costs, in real terms, compared to prices across the rest of the National Electricity Market (NEM). The study also revealed that wholesale electricity prices have not risen, even if the full cost of the renewable generation certificates (REC) is included.

Mr Price said perhaps the finding that the skeptics of wind energy will find most surprising is that there had been no proportional increase in back-up generation capacity.

“In fact the state’s reliance on expensive and emission-intensive peaking plants has dropped, as have imports of electricity from Victoria. As a result, CO2 emissions due to electricity generation have plummeted 34%, while electricity usage remained stable,” Mr Price said.

“The findings should provide clear guidance to the Federal Government’s Renewable Energy Target (RET) review panel that wind energy and by association the RET should not be a scapegoat for explaining increases in domestic and business energy costs. The study further underpins the conclusions of the Clean Energy Council’s commissioned report into the positive cost implications of the RET.”

The report’s co-author Dr David Osmond from the WindScapeTM Institute said, “The study provides strong evidence that wind energy is a cost-effective and reliable means of achieving large scale emissions reductions.

“The South Australian experience provides no evidence that there have been either direct or indirect cost increases for consumers through the introduction of large amounts of wind energy into their market. However, it is clear that there has been a very large reduction in carbon emissions - which of course is the purpose of the RET,” Dr Osmond said.

Windlab used publicly available data from the Australian Energy Market Operator (AEMO) to complete the study.

You can download a copy of Windlab's study here.