Wind energy might be poised to do something that should warm the hearts of environmentalists: kill off the nuclear power industry and hurt coal-powered energy operators. This Businessweek article says the news comes on the heels of a record 13,124 megawatts of wind turbines added to the country’s power grid at the end of 2012, trying to take advantage of an expiring federal tax credit.
“Right now, natural gas and wind power are more economic than nuclear power in the Midwestern electricity market,” Howard Learner, executive director of the Environmental Law and Policy Center, a Chicago-based advocate of cleaner energy, said in a phone interview. “It’s a matter of economic competitiveness.”
Wind-generated electricity supplied about 3.4 percent of U.S. demand in 2012 and the share is projected to jump to 4.2 percent in 2014, according to the U.S. Energy Information Administration.
The wind power boom has benefited consumers in regions where wind development is fastest, contributing to a 40 percent wholesale power-price plunge since 2008 in the Midwest, for example. Yet the surplus is creating havoc for nuclear power and coal generators that sell their output into short-term markets.
‘Perfect Storm’
The impact is greatest in the capacity-glutted Midwest. There, Richmond, Virginia-based Dominion is closing a money- losing reactor and selling coal plants, Exelon warns of shrinking nuclear margins and an Edison International (EIX) merchant coal-plant unit has gone into bankruptcy.
In fact, wind power is becoming so plentiful and so cheap that prices are actually falling below zero, because some utilities are required to keep buying wind power even when they don’t need it. Add in the $22-per-megawatt-hour federal tax credit, and wind can keep blowing away the other guys. Plus, the wind production tax credit has been extended for another year, through the end of 2013.