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BALANCING WIND ENERGY IN THE GRID: AN OVERALL, TECHNO-ECONOMIC AND COORDINATED APPROACH W.HECQ, K.BACHUS, M. PIROTTON"WINDBALANCE", R. DE SUTTER, P. MEIRE R. Belmans, K. De Vos, S. De Rijcke, J. Driesen, W. D’haeseleer, Y. Rombauts, P. Luickx, G. Palmers, J. De Decker, J.-C. Maun SCIENCE FOR A SUSTAINABLE DEVELOPMENT (SSD) Energy FINAL REPORT Balancing wind energy in the grid: an overall, techno-economic and coordinated approach "WINDBALANCE" SD/EN/02 Promotors Ronnie Belmans K.U.Leuven (ESAT-ELECTA) Kasteelpark Arenberg 10 box 2445, BE-3001 Heverlee, Belgium William D’haeseleer K.U.Leuven (TME), Celestijnenlaan 300A box 2421, BE-3001 Heverlee, Belgium Geert Palmers 3E Kalkkaai 6, BE-1000 Brussels, Belgium Jean-Claude Maun ULB (BEAMS), Av. Fr. Roosevelt 50, BE 1050 Brussels, Belgium Authors Ronnie Belmans, Kristof De Vos, Simon De Rijcke, Johan Driesen (ESAT-ELECTA) William D’haeseleer, Yannick Rombauts, Patrick Luickx (TME) Geert Palmers, Jan De Decker (3E) Jean-Claude Maun (BEAMS) D/2011/1191/22 Published in 2012 by the Belgian Science Policy Office Avenue Louise 231 Louizalaan 231 B-1050 Brussels Belgium Tel: +32 (0)2 238 34 11 – Fax: +32 (0)2 230 59 12 http://www.belspo.be Contact person: Igor Struyf +32 (0)2 238 35 07 Neither the Belgian Science Policy Office nor any person acting on behalf of the Belgian Science Policy Office is responsible for the use which might be made of the following information. The authors are responsible for the content. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without indicating the reference : Ronnie Belmans, Kristof De Vos, Simon De Rijcke, Johan Driesen, William D’haeseleer, Yannick Rombauts, Patrick Luickx, Geert Palmers, Jan De Decker, Jean-Claude Maun - Balancing wind energy in the grid: an overall, techno-economic and coordinated approach "WINDBALANCE" - Final Report. Brussels : Belgian Science Policy Office 2012 – 122 p. (Research Programme Science for a Sustainable Development Project SD/EN/02 Balancing wind energy in the grid: an overall, techno-economic and coordinated approach "WINDBALANCE" TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................................. 5 ACRONYMS, ABBREVIATIONS AND UNITS............................................................................................... 13 1. INTRODUCTION ................................................................................................................................. 15 1.1 RESEARCH CONTEXT ................................................................................................................... 15 1.2 RESEARCH TARGETS .................................................................................................................... 18 1.3 PROJECT OVERVIEW .................................................................................................................... 19 2. METHODOLOGY AND RESULTS ........................................................................................................ 21 2.1 PHASE 1: SIMULATION TOOL FOR WIND POWER IN MARKETS ............................................................ 21 2.1.1 Data: wind power generation and market prices ................................................................. 21 2.1.2 Methodology: fixed price OTC equivalent .......................................................................... 29 2.1.3 Results ................................................................................................................................ 32 2.1.4 Conclusions ........................................................................................................................ 37 2.2 PHASE 2: TECHNICAL UPPER LIMIT FOR WIND POWER IN BELGIUM .................................................... 37 2.2.1 Technical upper limit for wind in Belgium without network constraints.............................. 38 2.2.2 Technical upper limit for wind in Belgium with network constraints ................................... 46 2.3 PHASE 3: WIND POWER IN A LIBERALISED MARKET .......................................................................... 46 2.3.1 Technologies for balancing non-nominated power variations ............................................. 47 2.3.2 Market procurement of balancing services ......................................................................... 50 2.3.3 Balancing wind power in the Belgian power system ........................................................... 56 3. POLICY SUPPORT ............................................................................................................................. 101 3.1 INTEGRATION OF WIND POWER IN POWER MARKETS ................................................................... 101 3.1.1 Production Support ........................................................................................................... 101 3.1.2 Market Value of Wind Power in Power Markets ................................................................ 102 3.2 TECHNO-ECONOMIC BARRIERS FOR WIND POWER INTEGRATION................................................... 107 3.2.1 Electricity generation system ............................................................................................. 107 3.2.2 Network constraints .......................................................................................................... 109 3.3 MEASURES FOR BALANCING WIND POWER .................................................................................. 110 4. DISSEMINATION AND VALORISATION ........................................................................................... 115 4.1 FINAL WORKSHOP ................................................................................................................... 115 4.2 JOURNAL ARTICLES .................................................................................................................. 115 5. PUBLICATIONS ................................................................................................................................. 117 ARTICLES IN INTERNATIONALLY REVIEWED SCIENTIFIC JOURNALS ................................................................. 117 PAPERS AT INTERNATIONAL CONFERENCES AND SYMPOSIA, PUBLISHED IN FULL IN PROCEEDINGS .................... 117 6. REFERENCES ...................................................................................................................................... 119 SSD - Science for a Sustainable Development - Energy 3 Project SD/EN/02 Balancing wind energy in the grid: an overall, techno-economic and coordinated approach "WINDBALANCE" EXECUTIVE SUMMARY A. Context As part of the European energy policy goals of sustainability, security of supply and improved competitiveness, the share of Renewable Energy Sources for Electricity (RES-E) is rapidly increasing. The Belgian national renewable energy action plan to comply with the EC renewable energy directive (2009/28/EC) estimates the installed capacity of wind power at 4320 MW towards 2020. This is expected to account for a yearly generation of 10.5 TWh, being 9% of the reference electricity demand scenario for 2020. B. Objectives The general objective of this project is to study the potential for massive wind integration in Belgium. Technical, economic and regulatory boundaries for a reliable and efficient integration in the power system are identified, together with necessary measures to transcend them. C. Conclusions Phase 1: market value of wind power In the first phase of the project, a market simulator is developed to determine the costs and revenues for a wind power generator. This simulator serves as a tool to calculate market value that wind power yields in different markets under different market conditions and depending on the predictability of wind power output. The developed market simulator calculates the value of wind energy when traded on the local power exchange, i.e. Belpex Day-Ahead Market. Real-time, wind power prediction errors are settled with the imbalance tariffs imposed by the TSO. Abstraction is made from the additional revenues from green certificates which are currently settled at minimum prices between 90 – 107 €/MWh. The value of wind is expressed as the “Fixed Price OTC Equivalent” and is compared to the fixed price negotiated in Over-The-Counter (OTC) contracts. This simulator is therefore a valuable support for valuating wind power investments or negotiating OTC- contracts. Moreover, the tool provides a base of an objective analysis of the real market value of wind energy under different market conditions and is therefore also a valuable tool for policy making. SSD - Science for a Sustainable Development - Energy 5 Project SD/EN/02 Balancing wind energy in the grid: an overall, techno-economic and coordinated approach "WINDBALANCE" The simulator is validated for different configurations for wind power generation: for a single turbine and an average Belpex Day-Ahead Market price of 75.3 €/MWh, the fixed OTC-value for 2009 is determined at 66.3 €/MWh. The limited predictability of wind therefore leads to a revenue loss of 18% due to imbalance settlement. It is found that this OTC-value can be increased with 16% when aggregating wind generation over larger areas and submitting this as one nomination (cfr. Germany). Secondly, different nomination strategies are researched