Extension of wind power - Effects on markets and costs of integration

A fast growth of the installation of wind turbines has been experienced in several European countries. The introduction of substantial amounts of wind power in a liberalized electricity system will have serious impacts on the markets: market prices will change since the marginal production costs of wind power are very low, and larger amounts of frequency-responding spinning as well as supplemental power reserve will be needed to maintain the stability of the power system.

Moreover transmission bottlenecks may occur between various regions. Modelling explicitly the stochastic behaviour of wind generation and taking into account the prediction error is crucial for an evaluation of the costs of the integration of wind power. In this paper, a stochastic linear programming model is described for the efficient power market operation using the principle of rolling planning on an hourly basis.

The model includes four markets: i) a day-ahead market for physical delivery of electricity, ii) an intraday-market, iii) a day-ahead market for automatically activated reserve power and iv) a market for district heating and process heat. Time series for the wind power production rely on time series for wind speed data and for the prediction error for wind speed.

Aggregation of wind power generation reflects the spatial distribution of the wind power stations in each region. Market restrictions, capacity restrictions, restrictions for down regulation, minimum operation and shut down times and hydro storages are included in this model. The model is applied to the German market which is decomposed in three regions in the year 2020.

The results clearly indicate that the integration costs strongly depend on the specific system configuration and that the transmission capacities play an important role. By tripling the transmission capacities the savings per MWh produced by wind can be increased in some cases by 70 %.