The integration of large amounts of wind power is a challenge to power systems. In this work, the impact of large-scale wind power on the operation of the Nordic power system, on the electricity market operation and on market prices was studied.
The variability of wind power is reduced when considering a large inte-connected system with geographically dispersed wind power production. In the Nordic countries, the aggregated wind power production will stay within 1-90% of the installed wind power capacity, and production levels of above 75% or below 5% of the installed wind power capacity are rare. The hourly changes of the production are most of the time within +/-10% of installed capacity in one country and inside +/-5% of capacity in the whole Nordic area.
The increased reserve requirement for the power system is determined by combining the wind power variations with varying electricity consumption. Combined with the varying load, wind power will not impose major extra variations on the system until a substantial penetration is reached.
The increased reserve requirement is seen on a 15 minutes - 1 hour time scale. In the Nordic countries, wind power would increase the reserve requirements by 1%, 2 and 4% of wind power capacity at 5, 10 and 20% wind power penetration of gross demand, respectively. The increased reserve cost is of the order of 1 E/MWh at a 10% penetration and 2 E/MWh at 20% penetration of wind power. This is halved if the conservative estimate for allocating investment costs for new reserve capacity to the wind power production is omitted and only increased use of reserves is taken into account. In addition, the prediction errors of wind power day-ahead may afect the system net imbalance and thus will reflect on the regulating power market, depending on how much the balance responsible players will correct the deviations before the operating hour.
The simulations of the Nordic power system show that wind power will mostly replace coal or gas condense power, partly in different countries to those with the installed wind power if the system is interconnected. The variability of wind power will first reflect the increase in exchange between the countries before thermal power plants in the area of installed wind power will be affected. The reduction of CO2 emissions in the Nordic countries is 700 gCO2/kWh at low penetration of wind power, reducing to 620gCO2/kWh at higher than 10% penetration. At penetration levels greater than 10%, there would be increased losses in hydro power production of the order of 1% of the produced wind energy. Based on simulations confirmed by experience in West Denmark, discarded energy becomes relevant for the Nordic electricity system when wind power produces more than 20% of the gross demand, or in some cases earlier if there are bottleneck situations in the interconnected Nordic network.
The analyses from 3 years of realised hourly data confirm the results from earlier studies that the capacity credit for wind power is close to average power produced. Wind power production in Finland and Denmark is lower than average at low ambient temperatures, but the Nordic wind power production does not show a similar trend.
The operation of wind power producers in the electricity market requires forecasting of the wind power production. The forecast errors are substantial when forecasting one day ahead: about 90% of wind power production will be known 1 hour beforehand, 70% 9 hours beforehand, and only 50% 36 hours before, respectively. The prediction errors will lead to balance deviations that will be charged according to regulating power market prices after the operating hour. The producer acting at the market can use after sales tools and bilateral trade to correct most of the error, as the production will be known more accurately some hours before delivery. This would increase the net income of a wind power producer by nearly 10%, according to 2001 data. The market rules will have a crucial effect on the costs for intermittent production like wind power. The balancing costs for the wind power producers should reflect the real costs for the power system, from balancing the system net imbalance.
High penetrations of wind power will affect the market price - lower the spot market prices and raise the regulating power prices. High penetration of wind power will lower the Nordpool spot market prices by about 2 E/MWh for each 10 TWh/a added wind production (10 TWh/a is 3% of gross demand). This applies if the wind power production is added to the system without replacing any production capacity.
the results from this work clearly show the benefits of large interconnected systems in absorbing variable production like wind energy. The results of wind power variability and increased reserve requirements give new insight for the Nordic countries in particular and other power systems in general. Important future issues would be the effects of wind power on the regulating market prices and hourly energy system modelling, including wind power intergration in a large interconnected system. When the penetration of wind power becomes greater, data on a minute or even second level would be beneficial to carry out transient studies on the variationsof wind power and load.
Large-scale wind power utilisation still lies in the future for many countries. There are long-term trends that can influence the impact of wind power on the power system. A greater system interconnection is highly beneficial: wind power spread all over Europe would be a more reliable source. The use of electricity for vehicles may open up new possibilities for variable and intermittent power production. Producing fuel for vehicles that are only used for about 1000 hours per year will ease the flexibility needs in power systems.