There is a lot of information in the linked article. This is what I took away from the article in my reply to the reader who sent me the article. The reply may not be ready for prime time (much of what I post on the blog probably isn't) but these were my first thoughts (and I may have missed the point of the article).
So, with that "disclaimer," my thoughts on the linked article:
Hi, ----
Wow, there's a lot of information in that article.
1. You mentioned Alliance. That was a very small piece of the entire article, but very, very timely:
http://themilliondollarway.blogspot.com/2013/07/enbridgealliance-offers-post-2105.html which you probably saw (posted yesterday).
2. The gist of the linked article you sent me, of course, was coal in MISO will be replaced by natural gas with/without wind.
3. Natural gas, for sure.
4. Wind requires huge tax breaks, govt subsidies; but it's the politically correct thing to do, so very likely we will see more wind, even though it doesn't make economic sense, and will actually result in more stress on the grid, and probably increased demand for natural gas.
5. There are two obstacles to wind. The article mentions both of them. First, the article questions whether there are enough "good" locations for wind. (Wind is where there is little demand for more energy which leads us to paragraph 6.)
6. Interestingly enough, it's the very last paragraph that is the most important in this very long article with regard to wind:
Minnesota Power's Rudeck agreed. "Investment in the transmission system is key to ensuring the reliability of the grid going forward. It is the companies' and grid owner's responsibility to work together and find a solution for the new capacity."
7. There have been recent articles (which I did not post) that suggest that new transmission lines necessitated by wind farms will be the biggest hurdle. If you recall, Pickens lost a lot of money on his wind bet in western Texas because he could not get the transmission lines in -- that was two to three years ago. Forbes had a great article on the problems with wind back in December, 2012.
8. It is minor challenge to convert from coal to natural gas; the plants are there, and the transmission lines are there.
9. Also, did you note PJM in the article? I assume they are talking about the energy broker, PJM -- something new for investors, newbies.
10. So, bottom line:
a) great article; thank you for sending; I will post with the above comments
b) the govt is likely to support wind power because it's the "PC" thing to do
c) wind still has hurdles --
d) the govt will probably force exiting utilities to put in new transmission lines; no matter how costly wind is, it's the "PC" thing to do -- it will happen
- i) where to place wind farms; and,
- ii) transmission lines
e) natural gas story for North Dakota is only going to get better and better; at the sidebar near the top, I have two "featured presentations": the Bentek presentation talks to both oil AND natural gas in the Bakken
f) the linked Platts article introduces PJM for some of us
g) the Alliance pipeline story was minor part of this article, but huge story on its own
11. Bottom, bottom line with regard to wind: I think we will know by the end of 2014, if not by the end of 2013, whether the wind industry will keep growing. Renewables practically "broke" Spain (maybe others in the EU) but the US is much bigger; "we" can go on making dumb policy decisions for a long, long time and not notice the damage. Sort of like the laboratory frog that died when the researchers gradually turned the water temperature up to boiling, so slowly the frog did not notice.
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