Integrating Wind Power into the Electricity Supply Industry

Abstract

Wind energy is at a cross-roads. Will it remain an atypical and marginal source, or is the sector heading towards ‘normalisation’? For wind energy to become a mainstream source of electricity, its integration within the electricity supply industry (ESI) has to be improved. To clarify the ways in which national ESIs and the wind sector reciprocally influence the development paths of each other, this chapter explores its relationships within the ESI at three levels. The first section reviews the changing fuel mix in the electricity sector in order to establish the scope for displacement of conventional energy sources by wind. It analyses national ESIs, the market position of the utilities and the main consequences of liberalisation for incumbents and new entrants. The conduct and strategies of established actors inevitably impact on the scope for integration of wind power. Thus the second section reviews the economic issues of the market integration of wind power and the technical issues of its grid integration. The third section revisits the question of substitution of fossil fuels by wind energy from a different perspective, by considering the sector’s capacity to achieve reductions in atmospheric emissions. Through these analyses, the chapter develops the argument that the ‘normalisation’ of wind power is underway but incomplete. Further reforms in policy and practice can be expected to reduce its atypical characteristics.