Evaluating the Impacts of Real-Time Pricing on the Usage of Wind Generation

One of the impediments to large-scale use of wind generation within power systems is its nondispatchability and variable and uncertain real-time availability. Operating constraints on conventional generators such as minimum generation points, forbidden zones, and ramping limits as well as system constraints such as power flow limits and ancillary service requirements may force a system operator to curtail wind generation in order to ensure feasibility. Furthermore, the pattern of wind availability and electricity demand may not allow wind generation to be fully utilized in all hours. One solution to these issues, which could reduce these inflexibilities, is the use of real-time pricing (RTP) tariffs which can both smooth-out the diurnal load pattern in order to reduce the impact of binding unit operating and system constraints on wind utilization, and allow demand to increase in response to the availability of costless wind generation. We use and analyze a detailed unit commitment model of the Texas power system with different estimates of demand elasticities to demonstrate the potential increases in wind generation from implementing RTP.