Valuing Wind Generation on Integrated Power Systems

by Ken Dragoon

Overview

Wind powered generation is the fastest growing energy source in the United States due to a combination of economic incentives, public preference for renewable energy as expressed in government policies, competitive costs, and the need to address global warming. The economic consequences of the relative variability and lower predictability of wind generation are not easily captured in standard economic analyses performed by utility planners. This book provides utility analysts and regulators a guide to analyzing the value of wind generation in the context of modern power systems.Guiding the reader through the steps to understanding and valuing wind generation on modern power systems, this book approaches the issue from the various, current perspectives in the US. These include utilities that are still primarily vertically integrated power providers and systems dominated by independent system operators (ISOs). Outlined here are the basic procedures in a wind valuation study, described with enough detail so that analysts spanning a range of resources and sophistication can reasonably undertake a competent study. Descriptions of studies performed by other utilities are also provided, explaining their specific approaches to the fundamentals. Finally, it includes a short section on power systems that utilize relatively large fractions of wind, and how operating procedures and valuing techniques may need alteration to accommodate them.• Reviews operating challenges that large amounts of wind power present to power systems operators • Outlines alternative approaches to quantifying the systems services necessary to accommodate the wind • Explains how economic analyses of wind generation are competently performed • Describes how to represent wind generation in computer models commonly used by electric utility planners that may not be specifically designed to incorporate wind generation • Reviews methods used by some select utility companies around the United States • Touches on key European issues involving relatively high levels of wind generation • Written at the level of the utility planner, assuming a basic understanding of economic dispatch of generators and elementary statistics

Product Details

ISBN-13:	9780815520474
Publisher:	Elsevier Science
Publication date:	10/22/2010
Pages:	240
Product dimensions:	6.20(w) x 9.10(h) x 0.80(d)

About the Author

Ken Dragoon is currently Research Director of Renewable Northwest Project in Portland, Oregon. He has more than 25 years in the electric utility industry with expertise in power system planning studies, resource valuation analysis, and renewable resource acquistion. He is the autor of several papers ranging from wind integration and streamflow forecasting to the relative capacity contribution of power plants. He holds a Master's degree in physics from the University of New Hampshire.

Table of Contents

Preface ix

Acknowledgements x

Chapter 1 Introduction 1

Chapter 2 Overview of system impacts of wind generation 5

2.1 Primary economic effects of wind power 6

2.2 Role of wind forecasts in wind power economics 7

2.3 Wind as an energy resource 9

2.4 Other potentially important effects 11

2.5 Properties of wind output in aggregate 13

2.5.1 Effects of high-pressure systems and weather fronts 16

2.5.2 Weather fronts and wind ramps 18

2.5.3 Wind generation data 19

2.6 Summary 19

Chapter 3 General approaches to valuing wind on power systems 21

3.1 Wind valuation components 23

3.1.1 Direct wind generation cost 24

3.1.2 Gross value of generated energy 26

3.1.3 Value of renewable energy credits and emissions reductions 27

3.1.4 Cost of holding additional reserves due to wind variability and Uncertainty 29

3.1.5 Effects on reserve generation operating costs 32

3.1.6 Balance of system and market trading costs 33

3.2 Summary 34

Chapter 4 Developing Useful wind generation data 37

4.1 Sensitivity of statistics to scaling 38

4.1.1 Scaling to nearby wind projects 41

4.2 Converting wind speed to wind output 42

4.2.1 Adjusting wind speed measurements to hub height 43

4.2.2 Multi-turbine power curve equivalent 44

4.2.3 Block-averaged wind speeds 46

4.3 Using weather model data 47

4.4 Summary 48

Chapter 5 Representing wind in economic dispatch models 51

5.1 Ideal representation of wind generators in dispatch models 52

5.2 Fixed time series in forward- and backward - looking analyses 53

5.3 Representing wind as load reduction or fixed generation levels 55

5.4 Representing wind as an equivalent thermal generation station 57

5.5 Summary 61

Chapter 6 Poujer system incremental reserve requirements 63

6.1 Principles of reserve requirement analysis 63

6.1.1 Incremental reserves to ensure reliability 64

6.1.2 Distinct importance of variability and uncertainty 65

6.1.3 Reserve requirements depend on both load and wind characteristics 66

6.2 Reserve nomenclature 70

6.2.1 Planning reserves 71

6.2.2 Operating reserves 71

6.3 Determining non-contingency operating reserve requirements 73

6.3.1 Segmenting reserve requirements by type 77

6.3.2 Conditional reserve requirements 83

6.4 Summary 84

Chapter 7 Wind power forecasting 87

7.1 Types and uses of wind forecasts 87

7.2 Climate and weather 89

7.3 Forecasting techniques 90

7.4 Forecast error measures 92

7.5 Forecast accuracy 95

7.6 Developing synthetic forecasts 97

7.7 Summary 98

Chapter 8 Wind energy valuation studies 101

8.1 System responses to wind generation 103

8.2 Study design 103

8.3 Model modifications for wind 105

8.3.1 Modeling variability 106

8.1.2 Modeling forecast uncertainty 107

8.4 Example study results 108

8.5 Portfolio risk and wind generation 109

8.6 Costs and value not captured by CEDMs 111

8.7 Study validation 112

8.7.1 Input validation 112

8.7.2 Algorithm validation procedures 112

8.7.3 Validating results 113

8.8 Over-specification of wind costs 114

8.9 Summary 115

Chapter 9 Wind integration costs 117

9.1 Wind integration cost study design 118

9.1.1 Design for CEDM-based studies 118

9.1.2 Non-CEDM study design 121

9.2 Simplified non-CEDM wind integration cost example 122

9.2.1 Calculating increased reserve requirement 123

9.2.2 Incremental fixed costs 123

9.2.3 Incremental fuel costs 124

9.2.4 Market transaction costs 127

9.2.5 Summary of costs 130

9.3 Cost allocation 131

9.4 Incremental reserve requirement behavior 132

9.4.1 Importance of standard deviation 132

9.4.2 Summing distributions 133

9.4.3 Effect of project size: Examples 135

9.4.4 Effect of correlation: Examples 136

9.4.5 Small increment approximation 136

9.4.6 Dependence on order 137

9.4.7 Real data and the inconstancy of the z-statistic 138

9.4.8 Conclusion 138

Chapter 10 Wind Power's contribution to meeting peak demand 141

10.1 Capacity value and effective load-carrying capability 142

10.2 Computing effective load-carrying capability 144

10.3 Wind capacity value characteristics l49

10.4 Case studies 150

10.4.1 State of New York 150

10.4.2 State of Minnesota 151

10.4.3 German study 152

10.4.4 Irish study 152

10.5 Summary 153

Chapter 11 Effects of markets on wind integration costs 155

11.1 Market size and access 157

11.2 Scheduling rules and imbalance settlement 158

11.3 Ancillary service requirements and charges 159

11.4 Participation in redispatch 160

11.5 Wind forecasting services 162

11.6 Capacity valuation 162

11.7 Market incentives 163

11.7.1 Federal incentives 163

11.7.2 Non-federal incentives 166

11.8 Transmission construction cost recovery and efficient use of capability 166

11.8.1 Efficient use 166

11.8.2 Transmission construction cost recovery 167

11.9 Summary 168

Chapter 12 Enhancing wind energy value 171

12.1 Reducing reserve generation requirements 172

12.1.1 Improved mind forecasting 173

12.1.2 Shorter scheduling lead times 174

12.1.3 More frequent market transactions 175

12.2 Efficient provision of balancing services 175

12.2.1 Wider sharing of balancing needs 175

12.2.2 Incorporating a broader range of balancing generators 176

12.3 Active management of mind and demand 179

12.4 Dedicated storage technologies 180

12.5 Summary 181

Chapter 13 Review of selected wind integration studies 183

13.1 Sampling of studies 185

13.1.1 2006 Minnesota wind integration study 185

13.1.2 2005 NYSERDA wind study 185

13.1.3 California Energy Commission 2007 IAP Final Report 189

13.1.4 Eastern Wind Integration and Transmission Study (EWITS) 191

13.1.5 Western Wind and Solar Integration Study (WWSIS) 194

13.1.6 All Island Study (Ireland) 198

13.2 Summary 201

Chapter 14 Considerations for high penetration wind systems 203

14.1 Market organization 206

14.1 Energy storage 207

14.3 Facility siting 210

14.4 Wind forecasting 211

14.5 Controlling wind generation 212

14.6 Summary 213

Appenix A Wind forecasting vendors 215

Glossary 217

Index 227

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From the Publisher

An essential guide for the analysts, consultants, engineers and regulators involved in the integration of wind generation into power systems, and the related economic modeling