EMDEMD
EWEA 2012
SESSION: ADEQUATE ELECTRICITY MARKET DESIGN CONCEPTS FOR WIND POWER INTEGRATION
Proactive participation of wind turbines in the balancing markets
Presenter: Anders N. Andersen, EMD International A/S
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The Danish Transmission System Operator has financed a real case test about Proactive participation of wind turbines in the balancing markets. Participating companies in this test:
EMD International A/S (www.emd.dk) Danish Wind Industry Association (www.windpower.org)
Nordjysk Elhandel (www.neas.dk) Inopower (www.inopower.dk) Vindenergi Danmark (www.vindenergi.dk)
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You will in this presentation meet:
The need for wind turbines being proactive in the balancing markets.
New Danish regulation for wind turbines participating in the Tertiary reserve market.
Live test of activation of wind turbines in the Tertiary reserve market.
Simulated profit for wind turbines being activated in the Tertiary reserve market.
Proposal for improved organization of the balancing markets, allowing increased competition in these markets.
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The need for wind turbines being proactive in the balancing markets is shown in www.emd.dk/el
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New Danish regulation for wind turbines participating in the Tertiary reserve market
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The Danish markets for balancing the electricity system and wind productions
Primary reserve
Secondary reserve
Manuel regulating power (Tertiary reserve)
30 sec15 min
Intra day market
Day ahead market
1 hour > 12 hours
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A Balancing Responsible Party informs the TSO about:
Hourly energy notification (hourly energy amounts traded)
Power schedule at 5-minute intervals (updated when necessary)
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Settlement of imbalances:
Imbalances in the hourly energy notification is settled with the activation prices in the Tertiary reserve market.
Imbalances in the power schedule is settled with the activation prices in the Secondary reserve market.
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The Danish TSO has recently changed its regulation in order to facilitate active participation of wind turbines in the Tertiary reserve market.
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A Balancing Responsible Party for wind turbines used actively in the markets informs the TSO about:
Hourly energy notification (hourly energy amounts traded)
Special 5-minute time series showing the number of MWs (installed capacity) of the total portfolio of operational wind power plants that have been closed down.
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Settlement of imbalances for wind turbines:
Imbalances in the hourly energy notification is settled with the activation prices in the Tertiary reserve market.
Imbalances in the power schedule is NOT settled.
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Live test of the economic benefit for a wind farm in operation of 21 MW that places bid by offering downward regulation to the TSO
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Profit calculation of won downward regulation in hour 24 of 14 February 2012
Production in that hour if not being downward regulated 21,0 MWh-elProduction in that hour when being downward regulated 6,7 MWh-elSold at spot market in that hour 17,8 MWh-elSpot market price in that hour 252,70 DKK/MWh-elDownward regulation price in that hour -497,97 DKK/MWh-el
Cashflow in that hour in case of not offering downward regulationSold at spot market 17,8 MWh-el á 253 DKK/MWh-el 4.498 DKKSurplus (imbalance), (21 - 17,8 MWh) 3,2 MWh-el á -498 DKK/MWh-el -1.594 DKKTotal payment for hour 24 2.905 DKK
Cashflow in that hour in case of offering downward regulationSold at spot market 17,8 MWh-el á 253 DKK/MWh-el 4.498 DKKSettlement (Regulating power), (17,8 - 6,7 MWh) 11,1 MWh-el á -498 DKK/MWh-el 5.527 DKKNet present value of delayed 250 DKK/MWh 21,0 MWh-el á -100 DKK/MWh-el -2.100 DKKTotal payment for hour 24 7.926 DKK
Increase in profit in that hour in case of offering downward regulation 5.021 DKK173%
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IT-solutions for activating wind turbines in the Tertiary reserve market
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Short-term forecasting of wind productions
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Simulated profit for wind turbines being activated in the Tertiary reserve market.
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Rough simulation of the value of Proactive participation of a21 MW windfarm in the first 9 month of 2010 in Westdenmark(all amounts in €) Proactive ReferenceSold electricity in the spot market 1.270.825 1.270.825Surplus (imbalance) 188.052 147.224Shortfall (imbalance) -158.963 -158.999Activation income in the Regulating power market 88.745Value of delayed 250 DKK/MWh-premium (100 DKK/MWh) -23.057Income total 1.365.602 1.259.050Profit of proactive participation 106.552
8,5%Produced in the first 9 month of 2010 32.788 MWhSold in spot the first 9 month of 2010 30.100 MWhDownward regulated when being proactive 1.718 MWhAverage error in prognosis (relative to full load) 6,2%
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Proposal for improved organization of the balancing markets, allowing increased competition in these markets.
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The electricity directive creates the legal framework for the organization of the balancing markets
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In order to ensure effective market access for all market players, including new entrants, non discriminatory and cost-reflective balancing mechanisms are necessary. As soon as the electricity market is sufficiently liquid, this should be achieved through the setting up of transparent market-based mechanisms for the supply and purchase of electricity needed in the framework of balancing requirements.
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Proposals for the good organization of a balancing market (being most impor-tant for the Tertiary Reserve-market):
Split the market into an availability market and an activation market.
Make the market assymmetric, allowing to offer only positive or negative power.
Organize the market as a Marginal price market and not as a PayAsBid-market.
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Positive Secondary Reserves(Sekundärregelung)
Positive Tertiary Reserves
(Minutenreserve)
Germany 2955 MW 3054 MW
West Denmark 90 MW 513 MW
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www.emd.dk/desire/Skagen/
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Summing up about proactive wind turbines in the balancing markets:
Most of the balancing of wind productions is to be made in the Tertiary reserve market
Organizing the balancing markets in the right way, will allow an increased competition in these markets, and the wind turbines themselves may even earn money when participating in these markets – and at least be protected against big imbalance costs.
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Thank you for your attention !
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