Wind Power in Estonia - Elering

Electricity pricesIncreasing possible supply of wind power depresses wholesale electricityprices. With increased wind power the short-run operating costs of windpower is more frequently marginal in the market. Increased wind power alsoleads to more frequent price differences resulting from increased congestionas high levels of local wind power generation are transmitted to where it candisplace the dearest form of generation. Conversely, at times of short termlow levels of wind generation, it may be preferable to import instead ratherthan commit thermal units incurring commitment costs. These two effectsincrease bottlenecks in the system and therefore also the marginal benefit oftransmission capacity, trade and well functioning markets.The Market Flexibility scenario has both the highest levels of electricity prices(marginal short-run generation costs) and the lowest average regional variations.This implies that economical wind power generation is facilitated by anefficient and coordinated approach to transmission access and to unit dispatch.Wind power and electricitymarketsThe development of efficient electricity markets will benefit the integration ofwind power in the system. The analyses is carried out with the assumptionthat the interconnector between Estonia and Finland at least partly will beused according to market rules – an assumption which seems justified by theopening of the Nord Pool Estlink price area in April 2010. No market betweenRussia and the Baltic States is assumed, but the analyses show that a marketbased flow between Russia and the Baltic States will allow for more windpower in the Baltic States.Development of windpower in the BalticStatesBesides the curtailment of wind power production in Estonia, the curtailmentin the Baltic States as a whole has been analysed. A symmetric developmentof wind power has been assumed for all three Baltic countries in the scenarios,i.e. the 900 MW level means 900 MW in Estonia, 900 MW in Latvia, and900 MW in Lithuania. Similar for the 1800 MW level: 1800 MW in each of thethree countries. In the surrounding countries assumptions on wind powerdevelopment have been made based on existing plans.The analyses show a similar trend to the curtailment in the Baltic States as awhole as in Estonia alone. However the curtailment is generally higher for theBaltic States as a whole than for Estonia alone. These results give preliminaryindication that Estonia is able to effectively integrate more wind power thanLatvia and Lithuania respectively. In the scenarios for 2013, without Estlink 2,the level of curtailment in Estonia and the Baltic States as a whole are similar.13 | Wind Power in Estonia, 13-05-2010