Wind Power in the UK (PDF). - Sustainable Development Commission

sd.commission.org.uk

Wind Power in the UK (PDF). - Sustainable Development Commission

4 Costs and benefits of windgovernments give renewable energy sources afinancial boost instead, in the form of supportmechanisms. The advent of the EU EmissionsTrading Scheme will increase the price of fossilgeneration, but only by modest amounts – atleast initially.• Embedded generation benefitsacknowledge that many renewable energysources are small-scale and so connect intolow voltage distribution networks. This meansthat losses in the electricity network may bereduced and, possibly, transmission and/ordistribution network reinforcements delayedor deferred. The calculation of these benefitsis a complex issue and they vary bothregionally and locally. However, these benefitsmay turn to costs if concentrations ofrenewable energy in remote regions triggernetwork reinforcements, as is happening inScotland. In reality, some parts of the UK willexperience embedded generation benefits,whilst others will face some network costs –the net effect of these will be passed on to allconsumers, regardless of location.• Net additional system costs for variablegeneration apply especially to wind and waveenergy as explained in Chapter 3, and theseare discussed below.4.5 System costs from wind energyOf great interest to governments and electricityconsumers is the likely additional cost, in total,of adding specified amounts of renewableenergy to an electricity network. The extra coststhat the electricity system might face, termedthe ‘system cost’, depends on:• All the estimated costs of wind power(increased need for balancing services, higherinstalled cost, and network upgrades)minus• The estimated benefits (reduced conventionalfuel use, displaced costs of conventional plant– ‘capacity savings’).The result is then a figure for the net additionalcost of electricity from the whole system when acertain percentage of wind generation is added.This will be made up from a number of differentcosts and benefits falling on different marketparticipants, and therefore estimates of thesystem cost concentrate on the net overall effect,which will most likely be passed on to consumers.A number of studies have recently appearedwhich set out to quantify this net additionalcost. These are summarised in Table 6. CareTable 6: Summary of recent analyses of net additional cost of wind powerReferenceAmount ofWind, %RelevantdateExtra cost,p/kWhCommentsDale et al 35 (UK) 20Black and Veatch Corp 36 . 10*(Pennsylvania)IWEA 37 (Ireland) 41German Energy Agency 38From 5 to 1520202015202020150.300.02-0.200.24-0.30Changes in gas prices meanestimate now out of date; see boxand text*Includes all renewables; windaccounts for 64% of theseNetwork costs assumed small;assumes 2% p.a. gas price riseWind speeds in Germany arelower than in UK, so morecapacity needed.sustainable development commissionWind Power in the UK 31

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