balancing mechanisms and integration of wind power in the netherlands geert timmers ecofys...
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Balancing mechanisms and integration of wind power in The Netherlands
Geert Timmers
Ecofys Netherlands BV
8 May 2007
Balancing mechanisms and integration of wind energy Netherlands
Conclusion
• Can the system of balancing mechanisms used in The Netherlands accommodate large amounts of wind power?
• Yes
• But…
Balancing mechanisms and integration of wind energy Netherlands
Office network
Balancing mechanisms and integration of wind energy Netherlands
Relevant Ecofys activities
• Power Systems and Markets
• Wind energy: strategic and project development consultancy
• Wind power Prediction Services
• Energy and Climate Strategy studies
• RECS, GreenPrices
Balancing mechanisms and integration of wind energy Netherlands
Wind power Netherlands
• On-shore: 1500 MW – some 2500 MW
• Off shore: 228 MW – 6000 MW?
• Programme responsibility wind power concentrated at 4 parties
• Grey power value, fixed subsidy
• Unstable government policy and support schemes
• Conventional: 20.000 MW
Balancing mechanisms and integration of wind energy Netherlands
System balancing Netherlands
• All power producers carry programme responsibility
• TenneT TSO operates “lean and mean”: most important role for market players
• Reserve power (not capacity) offered by market parties
• Dual imbalance pricing system
• Day ahead programming and trade
Balancing mechanisms and integration of wind energy Netherlands
Dual balancing prices
APX and imbalance sept 05 - feb 07
0
10
20
30
40
50
60
70
80
90
9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2
month
Eu
ro/M
Wh APX
afnemen
invoeden
Balancing mechanisms and integration of wind energy Netherlands
Growing loss of wind energy
Source: Ummels, Gibescu, Pelgrum and Kling
Balancing mechanisms and integration of wind energy Netherlands
SCENARIO_2020: The probability of power output variations as a function of the size of the power output variations (expressed as % of the nominal wind power capacity)_Realisation
1.E-05
1.E-04
1.E-03
1.E-02
1.E-01
1.E+00
-100 -80 -60 -40 -20 0 20 40 60 80 100
Power output variation (%)
Pro
bab
ility
differences between two successive time steps differences between two time steps with a lag of one hour
differences between two time steps with a lag of two hours differences between two time steps with a lag of four hours
Simulated power variation 8 GW
Benjamin Duguet, Jan Coelingh, Ecofys Netherlands, We@sea project, input ECN
Balancing mechanisms and integration of wind energy Netherlands
Field survey project Netherlands
• Together with TenneT TSO
• Use of balancing mechanisms with 8000 MW wind
• 14 interviews with stake holders
– Programme responsible parties, large and small– Market facilitator, regulator and Ministry– Wind power developers, wind farm owners association
• Workshop with all stake holders
• Resulting in set of improvements for short and long term
Balancing mechanisms and integration of wind energy Netherlands
Opposing views on wind energy
• Wind power creates undesirable imbalance in (current/ conventional) production portfolio
• Wind power and conventional production units together define the total power portfolio with its own characteristics
Balancing mechanisms and integration of wind energy Netherlands
Conclusions from interviews
• Current balancing mechanism can absorb large amounts of wind power, no separate wind balance
• Wind balancing tariffs have to be transparent
• Upper limit determined by wind power share and flexibility of new power plants
• System improvements enable even more wind power, to be absorbed economically
• Price uncertainty, risk aversion, unequal market
Balancing mechanisms and integration of wind energy Netherlands
Future portfolio balancing issues
• Minimum load issue
• Low revenues for wind energy: market value prices instead of fixed price PPA’s
• Increasing imbalance volumes, prices
• Rapid and large changes, steep ramp rates
• Balancing system itself will put brake on wind power growth
Balancing mechanisms and integration of wind energy Netherlands
Key requirements for improvement• Transparancy
– Insight in balancing cost
• Flexibility
– Intra day and cross border corrections – Subsidy structure, gas contracts – Production portfolio
• Market depth
– Sufficient number of players and volumes
Balancing mechanisms and integration of wind energy Netherlands
Key improvements - realised
• Intra day market in Netherlands
• Intra day market also in Germany, Belgium and France
• Market connections Belgium-France-Netherlands
• NorNed interconnection under construction
• Modifications in dual imbalance pricing system
Balancing mechanisms and integration of wind energy Netherlands
Key improvements - ongoing
• Market connection NL-BE-FR-Germany
• Cross border trading possibilities Germany
• Agreements on cross border balance management
• Connection between balancing power and gas
• RE Support structure stimulating flexibility
Balancing mechanisms and integration of wind power in The Netherlands
For further questions and discussion, you are welcome at the Ecofys booth
Main exhibition hall, G 022
Geert Timmers, [email protected]
Ecofys Netherlands BV