Abstract
The variability and limited predictability of wind power challenges the operation of power
systems, where the generation and load are required in balance at all times. The transmission
system operator (TSO) is the responsible party. In a liberalized energy sector, key technical
elements of power system operation have been transferred to markets and are thereby
translated into economic responsibilities born by all system parties. The Dutch TSO TenneT
operates the 15 min interval real-time system balancing the market platform where energy
responsibilities are economically assessed. Market parties subject to programme responsibilities
with wind power as part of their generation portfolio must bear the integration costs
of wind power’s variability and forecast errors. The question arises what the real value of
wind power is in the market. In this paper, a straightforward approach is used for the economic
evaluation of existing wind power, taking Dutch market as a case study. Factual
production data are obtained from a 108 MW offshore wind farm. Two variations of persistence
forecast model are applied for the assessment of wind power value, which is quantified
using price data on the Dutch wholesale markets and the TSO’s balancing market. It
is found that presently in The Netherlands, wind power is a price-taker with a value equalling
90–110% of averaged market prices, including the imbalance cost component. The
right-skewed distribution of APX (Amsterdam Power eXchange) spot market prices is found
to reduce the market value of wind power. The impact of forecast errors on overall wind
power value is low due to the small impact of wind power on short-term wholesale market
prices.
Original language | Undefined/Unknown |
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Pages (from-to) | 507-523 |
Number of pages | 17 |
Journal | Wind Energy |
Volume | 12 |
Issue number | 5 |
DOIs | |
Publication status | Published - 2009 |