Wind power may reduce coal use

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http://www.bloomberg.com/apps/news?pid=20601072&sid=aAsmbKehf6fY

Sept. 7 (Bloomberg) -- Expanding wind power capacity in the U.S., the world’s largest producer of wind-generated energy, may lower electricity prices and reduce the use of coal and natural gas, Sanford C. Bernstein & Co. said.

“The impact of wind power has been to reduce the marginal cost of supply,” analysts Hugh Wynne and Neil Beveridge said in a report. “Power prices are expected to fall significantly from 2008 to 2011.”

By 2011, wind generation may cut the cost of power supply by $3 to $5 per megawatt-hour relative to a no-wind case and displace higher cost gas-fired units, according to the report dated Sept. 4. The growth in U.S. coal and gas consumption will fall “significantly,” the analysts said.

The average annual increase in the use of coal will decline 58 percent while that for gas will fall 49 percent, they said.

The growth in wind generation in some of the highest quality wind-resource areas in the Midwest and Great Plains may reduce the consumption of coal in power generation by 4.9 million short tons annually until 2011, according to the report.