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

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  • MacCormack, John
  • Hollis, Aidan
  • Zareipour, Hamidreza
  • Rosehart, William

Abstract

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.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 38 (2010)
Issue (Month): 7 (July)
Pages: 3837-3846

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Handle: RePEc:eee:enepol:v:38:y:2010:i:7:p:3837-3846

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Web page: http://www.elsevier.com/locate/enpol

Related research

Keywords: Wind power generation Reliability of supply Electricity market prices;

References

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  1. Parisio, Lucia & Bosco, Bruno, 2003. "Market Power and the Power Market: Multi-unit Bidding and (In)Efficiency in Electricity Auctions," International Tax and Public Finance, Springer, vol. 10(4), pages 377-401, August.
  2. Klemperer, Paul D & Meyer, Margaret A, 1989. "Supply Function Equilibria in Oligopoly under Uncertainty," Econometrica, Econometric Society, vol. 57(6), pages 1243-77, November.
  3. Supatgiat, Chonawee & Zhang, Rachel Q & Birge, John R, 2001. "Equilibrium Values in a Competitive Power Exchange Market," Computational Economics, Society for Computational Economics, vol. 17(1), pages 93-121, February.
  4. Paul Simshauser, 2006. "The Emergence of Structural Faults on the Supply Side in Deregulated 'Energy Only' Electricity Markets," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(2), pages 130-146, 06.
  5. Olsina, Fernando & Roscher, Mark & Larisson, Carlos & Garces, Francisco, 2007. "Short-term optimal wind power generation capacity in liberalized electricity markets," Energy Policy, Elsevier, vol. 35(2), pages 1257-1273, February.
  6. Lamont, Alan D., 2008. "Assessing the long-term system value of intermittent electric generation technologies," Energy Economics, Elsevier, vol. 30(3), pages 1208-1231, May.
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Citations

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Cited by:
  1. Lion Hirth, 2012. "The Market Value of Variable Renewables," Working Papers 2012.15, Fondazione Eni Enrico Mattei.
  2. Wang, Peng & Zareipour, Hamidreza & Rosehart, William D., 2011. "Characteristics of the prices of operating reserves and regulation services in competitive electricity markets," Energy Policy, Elsevier, vol. 39(6), pages 3210-3221, June.
  3. Hirth, Lion & Ueckerdt, Falko, 2013. "Redistribution effects of energy and climate policy: The electricity market," Energy Policy, Elsevier, vol. 62(C), pages 934-947.
  4. Schaber, Katrin & Steinke, Florian & Hamacher, Thomas, 2012. "Transmission grid extensions for the integration of variable renewable energies in Europe: Who benefits where?," Energy Policy, Elsevier, vol. 43(C), pages 123-135.
  5. Paulus, Moritz & Grave, Katharina & Lindenberger, Dietmar, 2011. "A methodology to estimate security of supply in electricity generation: results for Germany until 2030 given a high level of intermittent electricity feed-in," EWI Working Papers 2011-10, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  6. W├╝rzburg, Klaas & Labandeira, Xavier & Linares, Pedro, 2013. "Renewable generation and electricity prices: Taking stock and new evidence for Germany and Austria," Energy Economics, Elsevier, vol. 40(S1), pages S159-S171.
  7. Lion Hirth, 2013. "The Market Value of Variable Renewables. The Effect of Solar and Wind Power Variability on their Relative Price," RSCAS Working Papers 2013/36, European University Institute.
  8. Narbel, Patrick A., 2014. "Rethinking how to support intermittent renewables," Discussion Papers 2014/17, Department of Business and Management Science, Norwegian School of Economics.
  9. Lion Hirth & Falko Ueckerdt, 2012. "Redistribution Effects of Energy and Climate Policy: The Electricity Market," Working Papers 2012.82, Fondazione Eni Enrico Mattei.

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