Wind Power in Estonia - Elering

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6 Cost of wind power balancingThere are two levels of cost implications for wind power balancing.1. The system-wide or societal costs of balancing are the net sum ofcosts less the benefits for all stakeholders involved.2. The individual costs (or benefits) to a particular stakeholder or groupof stakeholders.In evaluating the cost of wind power balancing the first point is central in thedecision to pursue or not to pursue promotion policies. The second point is acrucial point of consideration in practical implementation, especially sincechanges to the policy and regulatory framework are most likely necessary toensure that stakeholders in legitimate pursuit of their own interests obstructimplementation and to protect interests where relevant.6.1 Forecast errors cause disruptions to planningThe costs of forecast errors are stochastic and manifest themselves in therealised. Commonly used metrics for assessing the potential costs of disruptionsinvolve calculating the expected value of perfect information (EVPI), i.e.the difference between the expected costs under uncertainty and the ex postcalculation of costs subject to realised values of the underlying stochastic variables(possible wind power production). The Balmorel scenarios in this studyuse historical (realised) values for possible power generation and as such yieldthe later portion of the EVPI expression. In the previous section, a span is calculatedfor the uncertainty and with this as a base the costs can be estimated.6.2 Costs calculated on the basis of “naive” dispatchSince the Balmorel model does not take forecast errors into consideration thecost estimates should be considered and expected upper bound on the costswhich should necessarily incur. With integrated planning of dispatch, whichtakes account of uncertainty, e.g. by incentivising reserves to be availableprior to day-ahead scheduling based on wind power forecasts, the systemcosts of wind power uncertainty should be significantly lowered.6.3 Cost componentsThere are two specific manifestations of costs from wind power uncertainty inwind power forecasts.1. Additional units may need to be started to ensure that sufficient upregulationcapacity.2. The realised dispatch is likely to commit units with higher runningcosts than the units originally dispatched.38 | Wind Power in Estonia, 13-05-2010
1275379105131157183209235261287313339365391417443469495521547573599625MWFrom the system cost perspective it is important to note that on average thedeviation in realised possible power as opposed to forecasted possible powershould balance out over the year. Therefore there is only net waste (curtailment)of wind when realised possible power exceeds beyond what is possibleto utilise by reduction generation on units with short-run costs in the system.As wind power curtailment can be effectuated in real-time it does not need tobe carried out in anticipation of possible events. In terms of operational coststo the system the additional costs are therefore only the perceivably highervariable operating costs (fuel) of units ramped up when possible power fallsshort of the forecast to the variable cost savings when possible power exceedsthe forecast and can be safely utilised.When forecasts have a high (>1%) probability of overestimating possiblepower it may be necessary to commit an additional new unit prior to knowingwhether or not that unit will been need to maintain the system balance. In thefollowing illustration, it is assumed that whenever the system has a likelihoodof being in deficit when the wind is realised, a unit must be paid to start-upeven though it is not a part of the expected optimal dispatch as defined by themarket. This unit will be maintained in operation until there is not anothercontingent situation in sight within a sufficient turn-around time of the unit.The start-up cost of the unit is considered to be entirely a cost attributed toforecast uncertainty. The cost is material, as it is incurred whether the contingentsituation is realised or not.2.5002.0001.5001.000500-Total reservesUp regulation availableGasturbinesRequired reservesFigure 16: Illustration of a situation where available up regulation power in the myopicdispatch falls short of the contingent reserve requirement (first 650 hours of the year).The scenario depicted on Figure 16 shows the commitment of the 400 MWgas turbines in the Estonian Flexibility scenario. For the sake of this calculation39 | Wind Power in Estonia, 13-05-2010
Page 1 and 2: Wind Power in EstoniaAn analysis of
Page 3 and 4: Eleringi kommentaarid uuringu tulem
Page 5 and 6: Tuulestsenaariume Põhjamaades ei o
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Page 11 and 12: Down-regulating reserves would typi
Page 13 and 14: Electricity pricesIncreasing possib
Page 15 and 16: 1.4 RecommendationsBased on the ana
Page 17 and 18: 3 The Estonian Power system3.1 Elec
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Page 31 and 32: The Estonian system’s grid code a
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Page 43 and 44: ity scenario are very similar regar
Page 45 and 46: With the current regulatory framewo

Wind Power in Estonia - Elering

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