Carlo Obersteiner

Influence of market rules on the economic value of wind power: an Austrian case study

Currently, wind power faces heterogeneous conditions for market integration throughout Europe, given both differing wind power and power system characteristics as well as according regulatory frameworks. This paper discusses marketing options and assesses the influence of market rules on the economic value of wind power for an Austrian case study. Special emphasis is thereby put on options for short-term wind power forecasting and trade. Results indicate that market integration can be improved considerably by implementing continuous day-ahead markets in Central European Countries as a first step. Under such framework conditions also simple forecast approaches provide a significant added value.

Technical Constraints on and Efficient Strategies for the Integration of Wind Energy

Based on simulations of the German and Austrian electricity systems, the impacts of wind generation on power plant operation are analysed. Accurate forecasts play the major role when integrating wind power because they determine additional reserve capacity as well as any additional imbalance. Additional balancing power can be limited to less than 10 % of the installed wind capacity if improved forecast tools or shorter forecast horizons are used. Additional balancing costs are below 5 € per MWh wind energy depending on the forecast accuracy and the available balancing capacity. Balancing markets need developments which improve the accessibility for demand-side options as simulations have shown potential cost reductions of 25%.

On the market value of wind power

In leading European wind power countries wind power generation affects wholesale power prices already today. First investigations indicate that the respective wind power - price relation lowers the market value of wind power relative to the baseload price with increasing penetration. The aim of this paper is to identify parameters that determine this effect based on simulations for the Central European Power Market (CEPM). We model wind power - price interactions and investigate the sensitivity of the market value on a number of wind power and system related parameters. The market value of wind power is sensitive to changes in wind share and variability, wind-demand correlation and the supply characteristics. Results further indicate that for expected wind capacities in 2020 the market value in the CEPM is significantly lower than the baseload price. The market value reducing effect varies among countries and is comparably low for wind power portfolios whose generation is weakly correlated with the overall wind power generation in the respective power market. Hence with rising wind shares it will become increasingly important to take this effect into account when assessing the economics of wind power projects. Future trends in the CEPM that may positively influence the market value are increasing electricity demand, fuel and CO2 prices, a better geographic distribution of onshore wind within the CEPM and an increasing utilization of offshore wind.

Drivers of imbalance cost of wind power: A comparative analysis

In Europe an increasing share of wind power is sold on the power market. Therefore more and more wind power generators become balancing responsible and face imbalance cost that reduce revenues from selling wind power. A comparison of literature illustrates that the imbalance cost of wind power varies in a wide range. To explain differences we indentify parameters influencing imbalance cost and compare them for case studies in Austria, Denmark and Poland. Besides the wind power forecast error also the correlation between imbalance and imbalance price influences imbalance cost significantly. Especially in systems with significant wind shares, an assessment of imbalance cost based on the amount of imbalance and average System Sell and System Buy Prices is therefore not reliable. While imbalance cost rather reflects cash flows within the clearing of imbalances, the presented concept of cost of imperfect forecast is better suited to reflect real cost incurred due to inaccurate wind power forecasts.

Economics of large-scale intermittent RES-E integration into the European grids: analyses based on the simulation software GreenNet

Market integration of Renewable Energy Technologies for Electricity (RES-E) generation is one of the core topics in the energy policy agenda of the European Commission (EC). However, legislation in this context still faces a variety of lacks (e.g. ignoring unbundling principles) in almost all countries of the European Union (EU). The recently finished EC-Project GreenNet addresses these existing inadequacies and models dynamic time paths up to the year 2020 for a variety of least-cost RES-E grid integration cases in the EU for different degrees of unbundling and different cost allocation schemes. The major results derived from GreenNet clearly demonstrate that the degree of unbundling and the implemented allocation principles of different disaggregated cost elements significantly influence RES-E deployment both on national as well as on EU level up to the year 2020. The major conclusion is that serious unbundling and correct allocation of RES-E related grid integration costs only guarantee the fulfilment of the ambitious EC goals with minimal costs for society.