The granddaddy of renewable energy in the Pacific Northwest, the Bonneville Power Agency, has operated hydroelectric dams in the region for many decades. BPA also rules most of the region’s high-voltage power network. That’s a good thing if you live in these parts, right?
Not if you are a wind farm operator. Turns out BPA has the authority (control of the grid) to cut back power generation from wind farms to make way for increased hydroelectric generation resulting from the largest snowpack since 1997. BPA claims it must do this to protect fish and if there is one thing norwesties like more than renewable energy, it’s salmon…but the wind farm operators think the motivation is really economic.
According to a complaint filed on Monday with the Federal Energy Regulatory Commission, BPA "is using its transmission market power to curtail competing generators in an unduly discriminatory manner in order to protect its preferred customer base from prices it considers" too low. Apparently, if all that power hit the market during low demand (overnight) times it would drive prices negative. Quite the dilemma unless you are basically a monopolist. Since May 17, BPA has cut 74,100 megawatt-hours of wind generation and nearly 9,600 Mwh of fossil generation, according to the agency's website
The FERC complaint was filed on June 13th by four of the largest names in wind power generation, Iberdrola, PacifiCorp, Horizon Wind Energy and Invenergy. Together they represent nearly 2,000 megawatts of wind capacity. When prevented from generating power they not only lose money because they cannot sell power, they also cannot then collect federal production tax credits (PTCs) and state renewable energy credits (RECs).
I think it’s ironic that in the home turf of Microsoft, which was prosecuted by the federal government for being a “monopoly,” we have an actual government monopoly playing favorites but that’s OK. At least with Microsoft you could always buy an Apple or even Linux machine. What recourse other than a lawsuit do these wind farms have?
What would really make sense is creating storage infrastructure. This price differential between overnight and peak rates was the driving force behind a project I worked on in 2007. Customers were lining-up for long-term PPAs to use power at rates lower than what they could buy it for during peak hours and the spread was enough to make a profit for the storage company. But guess who balked at the agreement? The utility.