Well, the National Grid, the entity which manages the electrical grid in the UK, is providing some interesting commentary in a special report about the long term outlook of their job, as posted here: National Grid 2006 Great Britain Seven Year Statement .

One of the main arguments against wind power is that it is intermittent and thus unreliable because not always available when needed. A corollary is that it is usually stated (and I've used these numbers myself in earlier diaries) that wind power will not be able to provide more than 20% of power - or that beyond that number, its costs rise significantly.



from chapter 4 The proportion of conventional generation needed to be retained in the electricity market, given the variable and unpredictable nature of some renewable technologies such as wind, such that current levels of security of supply are not eroded is the subject of the published paper: "A shift to wind is not unfeasible", by Dale, Milborrow, Slark & Strbac, Power UK Issue 109, March 2003. For example, for 8000MW of wind (e.g. in line with Government's 2010 target of 10% renewables), around 3000MW of conventional capacity (equivalent to some 37% of the wind capacity) can be retired without any increased probability that load reductions would be required due to generation shortages on cold days. However, as the amount of wind increases, the proportion of conventional capacity that can be displaced without eroding the level of security reduces. For example, for 25000MW of wind only 5000MW (i.e. 20% of the wind capacity) of conventional capacity can be retired. This implies that, for larger wind penetrations, the wind capacity that can be taken as firm is not proportional to the expected wind energy production. It follows that the electricity market will need to maintain in service a larger proportion of conventional generation capacity despite reduced load factors. Such plant is often referred to as "standby plant".



While that may sound bad, remember that a MW of wind power is equivalent to between 20 to 30% of a traditional MW (from coal, nuclear or gas), i.e. it produces one fifth to one third of the number of kWh per year - precisely because of its intermittent power.

Which means that the conventional capacity that can be displaced is quite close, in fact, to what would be need to produce the same number of kWh that wind produces. That means that any wind farm which is built, including when penetration will already be quite high, will provide "real" capacity, and real kWh that only very marginally need to be backed up by conventional capacity, as shown from this graph, from a study you can download from here: Security of decarbonised electricity systems:

More wind farms means more electricity, and more conventional power that can be taken out of the grid. A lot more wind farms means a lot more elctricity, and somewhat more conventional power than can be taken off the grid: in practice, a few conventional power plants will need to be kept, but will hardly ever used (basically only for emergencies and unusual circumstances on the wind side or the demand side) - thus the savings in terms of coal or gas to be burnt are quite real.

National Grid also provides an estimate of the cost of using a lot more wind on the network:



from chapter 4 We have estimated that for the case with 8000MW of wind needed to meet the 10% renewables target for 2010, balancing costs can be expected to increase by around £2 per MWh of wind production. This would represent an additional £40million per annum, just over 10% of existing annual balancing costs.



Balancing costs are what producers must pay if they produce less, or more, power than they informed the network operator (usually the day before). Wind producers are naturally penalised by such system, and thus have, in the UK, to pay for the impact of their intermittence on the system. This has not prevented projects from being built and from selling thier power on terms that make it profitable. Usually, they sell their power to big utilities that manage the intermittence within their larger portfolio, and charge the wind power producers for the service. The number above (about $4/MWh, or 0.4 cent/kWh) represents a pretty small fraction of production costs (typically 3-7 cents/kWh for wind) and are thus bearable.

Thus, at no cost to the reliability and security of the system, and a low investment cost, wind power can be ramped up to represent a high portion of electricity produced. Unlike gas-fired power, its cost of production is predictable (because it is constant, linked purely to the initial cost of financing). Unlike coal-fired power, its costs includes all externalities as wind creates no pollution, emits no carbon, and requires no strip mining. It's probably still more expensive than nuclear, but not always, and not by such a margin that it should be ignored as a large scale source of power.

Disclaimer: as many of you know, I finance the wind power sector. Do note, however, that I also finance the conventional power sector. Which makes me informed of the costs and advantages of each, I guess...