The Energy Information Administration’s “Today in Energy” series shows with a couple of charts how growing wind power output in the Southwest Power Pool region is cutting into the income of baseload power plants.
The effect matters because baseload power plants tend to have the lowest operating costs. As baseload plants get pushed off the system, more of system capacity will shift to more flexible “load following” plants, which tend to have higher operating costs. Power prices in the Southwest Power Pool and other ISO power markets tend to reflect the operating costs of load following plants, so the effect will be to increase average wholesale power prices.
Wind power advocates sometimes want to claim credit for driving down power prices, and in the short run the addition of wind power can push prices down (especially, of course, if wind power plants have their output subsidized as with…
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