"In response to emerging market conditions, and in recognition of the unique operating characteristics of wind generation, the New York Independent System Operator (NYISO) and New York State Energy Research and Development Authority (NYSERDA) commissioned a joint study to produce empirical information that will assist the NYISO in evaluating the reliability implications of increased wind generation. The work was divided into two phases. Phase 1, Preliminary Overall Reliability Assessment, was completed in early 2004. This initial phase provided a preliminary, overall, screening assessment of the impact of large-scale wind generation on the reliability of the New York State Bulk Power System (NYSBPS).

This document was prepared by General Electric International, Inc. in Schenectady, NY. It is submitted to THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (NYSERDA).

Editor's Note:

In the Executive Summary, GE argues that 'imbalance' penalties should not be imposed on wind: "subimbalance penalties should not be imposed on wind generation. Wind projects would need to settle discrepancies between their forecast and actual outputs in the energy balancing market. However, because wind is largely nondispatchable, any additional penalties for imbalance should be eliminated. [emphasis added] The FERC Order 888 allows imbalance penalties to be applied to generators that operate outside of their schedule. As applied in New York, any “overgeneration” can be accepted without payment and any “undergeneration” is priced at the greater of 150% of the spot price or $100/MWh. Strict application of these policies in the MAPS analysis performed would result in the loss of roughly 90% of the wind generation revenue, which would be disastrous to their future development."(page 2.8)

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