Wind generation not straight-forward energy policy, expert notes

Nick Hadjigeorge

The answer for achieving a cleaner environment may not be blowing in the wind, according to an energy consultant who spoke on campus Thursday.

Negative economic effects and problems associated with wind energy generation pose challenges for major wind energy-producing regions such as Texas, said C.K. Woo, senior partner with Energy and Environmental Economics at the UT Energy Symposium Thursday evening.

Woo said his research is motivated by the challenges and uncertainty of maintaining a reliable and efficient energy market.

He presented data and findings from his research and argued that there is strong empirical evidence showing that increasing wind-energy generation tends to reduce the investment incentive for natural gas energy generation.

“On one hand, you’d like to see wind generation for all sorts of reasons,” Woo said. “But in order to make wind generation more affordable you need to have the complement of dispatchable thermal generation.”

Thermal generation includes geothermal, coal and nuclear energy production. Woo said if we increasingly rely on wind energy for our electricity needs then we would have to unrealistically expect optimal wind energy production everyday in order to ensure investment.

Woo said electricity is the most volatile commodity on the market and can be affected by many different variables including daily variations in fuel cost and carbon price, weather, storage, outages and market power abuse.

Wind energy generation adds to this volatility, which decreases incentives for investing in energy generation, Woo said.

Varun Rai, assistant professor of public affairs and mechanical engineering, said Woo raised very important issues about the future of the energy market.

“His research highlights the challenges of increasing the capacity of energy reserves for the whole market,” Rai said.

Scott Robinson, public affairs and energy and earth reserves graduate student, said Woo’s talk provided an interesting perspective considering the current popularity of green energy.

“People hear a lot about increasing renewable energy,” Robinson said. “It’s good to hear a market-based assessment on what effects renewable energy would have.” 

Printed on Friday, October 14, 2011 as: Research finds wind energy not viable