The cost of integrating expanded wind power sources into the overall generation mix in the Pacific Northwest was reduced fivefold in the past two years through greatly reduced natural gas prices, according to a draft updated 2012 integrated resource plan (IRP) by Portland, OR-based PacifiCorp.

In a draft released last month, the MidAmerican Energy Holding Co. utility characterized a combination of changing power and natural gas prices on the cost of wind integration as “significant.” Gas-fired generation is the main balancing tool used in electric grid management to smooth out intermittent renewable power sources, such as wind and solar (see Daily GPI, March 18, 2011).

PacifiCorp’s IRP concluded that the overall cost of wind integration this year is $1.89/MWh, compared to nearly $10(9.70)/MWh two years ago. The average gas price used in the 2010 IRP at Opal, WY, was $5.36/Mcf, compared to $3.43/Mcf this year.

The report highlighted that market prices are lower both because of the shale gas boom that has created a domestic glut of gas supplies, and the lower electric prices due to depressed power demand tied to the weak economy.

“[Our] wind study indicates a substantially reduced cost of wind integration relative to previous studies,” the IRP said. “”The primary cause for the reduction is lower forecasted natural gas and power market prices.”

The reductions in prices and demand has caused the six-state electric utility to rethink its resource plans for the next three or four years. The utility held a resource solicitation for renewable and traditional thermal-fired generation this past May, but it canceled a subsequent one for September, citing significantly reduced average peak loads on its system last July.

The size of reserve margins for the 2013-2022 period has dropped in the latest draft IRP, and the assumed increments of wind-generated power have been left at similar levels of slightly more than 2,000 MW.

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