Estimating the value of wind energy using electricity locational marginal price

There is an increasing interest in adding renewables such as wind to electricity generation portfolios in larger amounts as one response to concern about atmospheric carbon emissions from our energy system and the resulting climate change. Most policies with the aim of promoting renewables (e.g., RPS, FIT) do not explicitly address siting issues, which for wind energy are currently approached as the intersection of wind resource, land control, and transmission factors. This work proposes the use of locational marginal price (LMP), the location and time specific cost of electricity on the wholesale market, to signal locations where generation can address electricity system insufficiency. After an examination of the spatial and temporal behavior of LMP in Michigan over the first two years of wholesale market operation, this work combines LMP with wind speed data to generate a value metric. High value sites in Michigan tend to be sites with higher wind speeds, with the bulk of value accruing in the fall and winter seasons.     

The impact of increased interconnection on electricity systems with large penetrations of wind generation: A case study of Ireland and Great Britain

Increased interconnection has been highlighted as potentially facilitating the integration of wind generation in power systems by increasing the flexibility to balance the variable wind output. This paper utilizes a stochastic unit commitment model to simulate the impacts of increased interconnection for the island of Ireland with large penetrations of wind generation. The results suggest that increased interconnection should reduce average prices in Ireland, and the variability of those prices. The simulations also suggest that while increased interconnection may reduce carbon dioxide emissions in Ireland, Great Britain would experience an increase in emissions, resulting in total emissions remaining almost unchanged. The studies suggest that increased interconnection would not reduce excess wind generation. This is because under unit commitment techniques which incorporate wind power forecasts in the scheduling decisions, wind curtailment is minimal even with low levels of interconnection. As would be expected an increase in interconnection should improve system adequacy considerably with a significant reduction in the number of hours when the load and reserve constraints are not met.     

Evaluation of wind energy investment interest and electricity generation cost analysis for Turkey

Turkey has remarkable wind energy potential, but its utilisation rate is very low. However, in 2007, energy investors applied to the Energy Market Regulatory Authority (EMRA) with 751 wind projects to obtain a 78180.2 MW wind power plant license. This paper first presents an overview of wind energy development in the world and then reviews related situations in Turkey. Second, to motivate the interest in wind energy investment, new wind power plant license applications in Turkey are analysed. Finally, wind electricity generation cost analyses were performed at 14 locations in Turkey. Capacity factors of investigated locations were calculated between 19.7% and 56.8%, and the production cost of electrical energy was between 1.73 and 4.99 $cent/kW h for two different wind shear coefficients.     

Technoeconomic analysis of electricity generation from wind energy in Kutahya,Turkey

Conventional energy usage has various environmental effects that cause global warming. Renewable energy sources are thus more favorable because they have nearly zero emission. Wind energy, among the various renewable sources, finds increasing usage, concurrent with developing technology. In addition, wind is an infinite energy source. In this study, the electricity-generation ability of Kutahya has been investigated. With this aim, wind data, from the measurement station located on Bunelek Hill, Kutahya, have been collected for a period of 36 months (July 2001–June 2004). From the collected data, the electricity generated has been calculated for different types of wind turbines. The calculations have been based on the electricity requirement of the main campus of the Dumlupinar University. Finally, the economic evaluation has been analyzed using life-cycle cost analysis. For the analysis of the economical aspects, the social and CO₂ costs have also been taken into account.     

The large-scale integration of wind generation: Impacts on price,reliability and dispatchable conventional suppliers

This work examines the effects of large-scale integration of wind powered electricity generation in a deregulated energy-only market on loads (in terms of electricity prices and supply reliability) and dispatchable conventional power suppliers. Hourly models of wind generation time series, load and resultant residual demand are created. From these a non-chronological residual demand duration curve is developed that is combined with a probabilistic model of dispatchable conventional generator availability, a model of an energy-only market with a price cap, and a model of generator costs and dispatch behavior. A number of simulations are performed to evaluate the effect on electricity prices, overall reliability of supply, the ability of a dominant supplier acting strategically to profitably withhold supplies, and the fixed cost recovery of dispatchable conventional power suppliers at different levels of wind generation penetration. Medium and long term responses of the market and/or regulator in the long term are discussed.     

The viability of balancing wind generation with large scale energy storage

This paper studies the impact of combining wind generation and dedicated large scale energy storage on the conventional thermal plant mix and the CO₂ emissions of a power system. Different strategies are proposed here in order to explore the best operational strategy for the wind and storage system in terms of its effect on the net load. Furthermore, the economic viability of combining wind and large scale storage is studied. The empirical application, using data for the Irish power system, shows that combined wind and storage reduces the participation of mid-merit plants and increases the participation of base-load plants. Moreover, storage negates some of the CO₂ emissions reduction of the wind generation. It was also found that the wind and storage output can significantly reduce the variability of the net load under certain operational strategies and the optimal strategy depends on the installed wind capacity. However, in the absence of any supporting mechanism none of the storage devices were economically viable when they were combined with the wind generation on the Irish power system.     

Lower electricity prices and greenhouse gas emissions due to rooftop solar: empirical results for Massachusetts

Monthly and hourly correlations among photovoltaic (PV) capacity utilization, electricity prices, electricity consumption, and the thermal efficiency of power plants in Massachusetts reduce electricity prices and carbon emissions beyond average calculations. PV utilization rates are highest when the thermal efficiencies of natural gas fired power plants are lowest, which reduces emissions of CO₂ and CH₄ by 0.3% relative to the annual average emission rate. There is a positive correlation between PV utilization rates and electricity prices, which raises the implied price of PV electricity by up to 10% relative to the annual average price, such that the average MWh reduces electricity prices by $0.26–$1.86 per MWh. These price reductions save Massachusetts rate-payers $184 million between 2010 and 2012. The current and net present values of these savings are greater than the cost of solar renewable energy credits which is the policy instrument that is used to accelerate the installation of PV capacity. Together, these results suggest that rooftop PV is an economically viable source of power in Massachusetts even though it has not reached socket parity.     

The impact of wind generation on the electricity spot-market price level and variance: The Texas experience

The literature on renewable energy suggests that an increase in intermittent wind generation would reduce the spot electricity market price by displacing high fuel-cost marginal generation. Taking advantage of a large file of Texas-based 15-min data, we show that while rising wind generation does indeed tend to reduce the level of spot prices, it is also likely to enlarge the spot-price variance. The key policy implication is that increasing use of price risk management should accompany expanded deployment of wind generation.     

Evaluation of wind energy potential and electricity generation at six locations in Turkey

In this study, wind characteristics were analyzed using the wind speed data collected of the six meteorological stations in Turkey during the period 2000–2006. The annual mean wind speed of the six stations (Erzurum, Elaz??, Bingöl, Kars, Manisa and Ni?de) is obtained as 8.7, 8.5, 5.9, 6.9, 7.4 and 8.0 m/s at 10 m height, respectively. The mean annual value of Weibull shape parameter k is between 1.71 and 1.96 while the annual value of scale parameter c is between 6.81 and 9.71 m/s. A technical assessment has been made of electricity generation from four wind turbines having capacity of (600 kW, 1000 kW, 1500 kW and 2000 kW). The yearly energy output and capacity factor for the four different turbines were calculated.     

Comparative impacts of wind and photovoltaic generation on energy storage for small islanded electricity systems

This paper addresses the annual energy storage requirements of small islanded electricity systems with wind and photovoltaic (PV) generation, using hourly demand and resource data for a range of locations in New Zealand. Normalised storage capacities with respect to annual demand for six locations with winter-peaking demand profiles were lower for wind generation than for PV generation, with an average PV:wind storage ratio of 1.768:1. For two summer-peaking demand profiles, normalised storage capacities were lower for PV generation, with storage ratios of 0.613:1 and 0.455:1. When the sensitivity of storage was modelled for winter-peaking demand profiles, average storage ratios were reduced. Hybrid wind/PV systems had lower storage capacity requirements than for wind generation alone for two locations. Peak power for storage charging was generally greater with PV generation than with wind generation, and peak charging power increased for the hybrid systems. The results are compared with those for country-scale electricity systems, and measures for minimising storage capacity are discussed. It is proposed that modelling of storage capacity requirements should be included in the design process at the earliest possible stage, and that new policy settings may be required to facilitate a transition to energy storage in fully renewable electricity systems.     

Evaluation of electricity generation and energy cost of wind energy conversion systems (WECSs) in Central Turkey

The negative effects of non-renewable fossil fuels have forced scientists to draw attention to clean energy sources which are both environmentally more suitable and renewable. Although Turkey enjoys fairly high wind energy potential, an investigation and exploitation of this source is still below the desired level. In this study which is a preliminary study on wind energy cost in Central Anatolian-Turkey, the wind energy production using time-series approach and the economic evaluation of various wind energy conversion systems (WECSs) enjoying the 2.5, 5, 10, 20, 30, 50, 100 and 150 kW rated power size using the levelised cost of electricity (LCOE) method for the seven different locations in Central Turkey were estimated. In addition, effects of escalation ratio of operation and maintenance cost and annual mean speed on LCOE are taken into account. The wind speed data for a period between 2000 and 2006 years were taken from Turkish State Meteorological Service (TSMS). According to the result of the calculations, it is shown that the WECS of capacity 150 kW produce the energy output 120,978 kWh per year in the Case-A (Pinarbasi) for hub height 30 m and also the LCOE varies in the range of 0.29–30.0 $/kWh for all WECS considered.     

Evaluation of wind energy potential and electricity generation on the coast of Mediterranean Sea in Egypt

Wind data from 10 coastal meteorological stations along the Mediterranean Sea in Egypt have been used for statistical analysis to determine the wind characteristics. It was found that three stations show annual mean wind speed greater than 5.0 m/s. In order to identify the Weibull parameters for all stations two different methods were applied.The methodical analysis for all stations was done for the corrected monthly and annual mean wind power at a height of 10 m, over roughness class 0 (water). The recommended correlation equation was also stated for Mediterranean Sea zone in Egypt. Also the wind power densities for heights of 30–50 m were calculated for all stations. Three of them are the best locations, namely: Sidi Barrani, Mersa Matruh, and El Dabaa, where these contiguous stations have great abundantly wind energy density.A technical assessment has been made of the electricity generation using WASP program for two commercial turbines (300 kW and 1 MW) considering at the three promising sites. The wind turbine of capacity 1 MW was found to produce an energy output per year of 2718 MW h at El Dabaa station, and the production costs was found 2€ cent/kW h.     

Optimized electrolyzer operation: Employing forecasts of wind energy availability,hydrogen demand,and electricity prices

One of the main advantages of fuel cell based mobility over other sustainable mobility concepts is the flexible production of hydrogen via electrolysis. To date, it is unclear how electrolysis at hydrogen refueling stations should be operated in order to achieve the lowest possible costs despite the constraints of hydrogen demand. This study proposes and evaluates an intelligent operating strategy for electrolysis capable of exploiting times of low electricity prices while participating in the spot market and maximizing wind energy utilization when combined with a wind farm. This strategy is based on a simulation model considering imperfect forecasts (e.g. of wind availability or energy prices) and non-linear electrolyzer behavior. Results show that this approach reduces hydrogen production costs by up to 9.2% and increases wind energy utilization by up to 19%, respectively.     

The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany

The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.     

The potential for electricity generation from on-shore wind energy under the constraints of nature conservation: a case study for two regions in Germany

In spite of the well-acknowledged environmental benefits of electricity generation from wind energy, there is increasing concern about impacts from wind turbines on local ecosystems and on the natural scenery. A GIS-based approach is developed to analyse the effect of different nature conservation criteria on the wind energy potential in quantitative terms. Results for two case study regions in Germany, representing a coastal area with quite good wind conditions and an inland region with limited wind resources, illustrate to which extent the ban of wind turbines in, for example, landscape conservation areas, special bird protection areas, or areas with high visual sensitivity reduces the potential for electricity generation from wind energy. We conclude that even under strict nature conservation constraints there is still a large potential for on-shore wind energy use that can be used to establish a sustainable electricity supply in Germany.     

The current status of wind energy in Turkey and in the world

The rapid increase in world energy demand, the depletion of conventional energy sources and the pollution caused by conventional fuels have increased the importance of developing new and renewable energy sources. Additionally, technological developments have resulted in increased energy demand for the entire world, including Turkey, especially for electrical energy. At present, wind energy is receiving considerable attention. This report focuses on the current status of wind energy in Turkey and in the world. An overview of wind energy in Turkey is presented, and its current status, application, support mechanisms and associated legislation in Turkey are described. Wind energy and its status in the world are also addressed. It can be concluded from this analysis that wind energy utilization in Turkey and throughout world has sharply increased. Turkey has an abundance of wind energy sources.     

Estimating the net electricity energy generation and demand using the ant colony optimization approach: Case of Turkey

This paper presents Turkey's net electricity energy generation and demand based on economic indicators. Forecasting model for electricity energy generation and demand is first proposed by the ant colony optimization (ACO) approach. It is multi-agent system in which the behavior of each ant is inspired by the foraging behavior of real ants to solve optimization problem. Ant colony optimization electricity energy estimation (ACOEEE) model is developed using population, gross domestic product (GDP), import and export. All equations proposed here are linear electricity energy generation and demand (linear_ACOEEGE and linear ACOEEDE) and quadratic energy generation and demand (quadratic_ACOEEGE and quadratic ACOEEDE). Quadratic models for both generation and demand provided better fit solution due to the fluctuations of the economic indicators. The ACOEEGE and ACOEEDE models indicate Turkey's net electricity energy generation and demand until 2025 according to three scenarios.     

Exploring the impact on cost and electricity production of high penetration levels of intermittent electricity in OECD Europe and the USA,results for wind energy

In this study we explore for the USA and OECD Europe (OECD Europe includes the countries that participate in the Organisation of Economic Cooperation and Development, among which Western Europe, USA and Japan) dynamic changes in electricity production, cost and CO₂ emissions when intermittent electricity sources are used with increasing penetration levels. The methodology developed can be applied for both solar photovoltaic (PV) and wind energy. Here the focus of the results is on penetration of wind electricity in the electricity system as simulated in a long-term model experiment in which the electricity demand is kept constant over time. All important parameter are included in a sensitivity analysis. With increasing penetration levels the cost reduction of wind electricity caused by upscaling and technological learning is counteracted by the cost increase due to (1) the need for additional back-up capacity, (2) the need to generate wind electricity at less favourable sites, and (3) discarded wind electricity because of supply–demand mismatch. This occurs after about 20% wind electricity production as percentage of current electricity production. At this level about 500 (OECD Europe) and 750 (USA) TWh yr⁻¹ wind electricity is absorbed in the system with the electricity demand of the year 2000. Wind electricity is found to be discarded when the production is about 55 (USA) to 10 times (OECD Europe) the present electricity produced from wind power. Beyond 30% of present electricity production, cost increases most significantly because of discarded wind electricity, excluding storage. In both regions the use of wind electricity would mainly avoid use of natural gas. The CO₂ emissions abatement costs range from 14 (OECD Europe) to 33 (USA) $ per ton CO₂ differ in both regions due to a faster wind electricity cost increase in OECD Europe.     

High value wind: A method to explore the relationship between wind speed and electricity locational marginal price

Wind and solar resources are, by nature, spatially distributed and temporally variable. The process of siting generators that use these renewable resources and integrating them into the electricity system therefore raises different issues than the same process for combustion facilities does. A method for discovering wind power sites with the highest value to the electricity system was developed and is illustrated here using data for the state of Michigan. This method combines readily available hourly average 10 m wind speed data with wholesale electricity price data, as hourly locational marginal price (LMP). The 10 m wind speed data from 72 sites were extrapolated vertically to 80 m turbine hub height, converted to wind power density, and interpolated horizontally via kriging to reconstruct a continuous surface. LMP data from 178 generator nodes were allocated across space using Thiessen polygons. High LMP was interpreted as a signal of insufficiency or weakness in the electricity system, and wind energy was considered a possible remedy. The method, implemented in a GIS, identifies when and where peaks in LMP and wind power density co-occur and highlights these events as high value. As the drive to incorporate more renewable generators into the electricity system increases, this method will help locate the most desirable sites based on wind resource characteristics and the structure of the larger electricity system. Proposing a new way to think about the value of the wind resource to the electricity system is a primary contribution of this work.     

Intertemporal-spatial equilibrium,demand and substitution of electricity in the EEC from 1953 to 1986

The generation, consumption and pricing of electricity in the member states of the European Community is modelled over the period from 1953–1986. Theoretical demand functions are developed and optimality conditions for equilibrium are established.