Imbalance costs of wind power for a hydro power producer in Finland

Hannele Holttinen, Göran Koreneff

Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientific

5 Citations (Scopus)

Abstract

In the Nordic electricity markets wind power producers at the markets sell their production based on day-ahead forecasts and pay imbalance fees for prediction errors. Most of the wind power production goes through Balance Responsible Players that have time to adjust the planned production levels or enter trades up to the hour of delivery. In this paper, the imbalance fees for wind power in Finland are calculated for year 2004 data. The base case leaves all day-ahead forecast errors to balance settlement. Imbalance cost will then be 0.62 €/MWh for dispersed wind power in Finland. The crossover benefit of combining the imbalances of wind with imbalances of load and other production prove to be large, especially if the imbalances can be combined with those of load. Different options for active trade 3 hours before delivery or internal balancing are then analysed. Trade in the intra-day market Elbas is only cost effective if trading close to spot market prices. A rough estimate shows that 400 MW of hydro power could provide internal balancing to cover 83…63 % of the forecast errors of wind power, when wind power is 200…400 MW. The market value for this balancing service was 1.3 €/MWh with 2004 prices.
Original languageEnglish
Title of host publicationProceedings of European Wind Energy Conference EWEC2007
Publication statusPublished - 2007
MoE publication typeB3 Non-refereed article in conference proceedings
EventEuropean Wind Energy Conference EWEC2007. Milan, Italy, 7 - 10 May 2007 -
Duration: 1 Jan 2007 → …

Conference

ConferenceEuropean Wind Energy Conference EWEC2007. Milan, Italy, 7 - 10 May 2007
Period1/01/07 → …

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Wind power
Costs

Keywords

  • Forecasting
  • wind energy
  • electricity markets
  • balancing costs
  • balance settlement

Cite this

Holttinen, H., & Koreneff, G. (2007). Imbalance costs of wind power for a hydro power producer in Finland. In Proceedings of European Wind Energy Conference EWEC2007
Holttinen, Hannele ; Koreneff, Göran. / Imbalance costs of wind power for a hydro power producer in Finland. Proceedings of European Wind Energy Conference EWEC2007. 2007.
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title = "Imbalance costs of wind power for a hydro power producer in Finland",
abstract = "In the Nordic electricity markets wind power producers at the markets sell their production based on day-ahead forecasts and pay imbalance fees for prediction errors. Most of the wind power production goes through Balance Responsible Players that have time to adjust the planned production levels or enter trades up to the hour of delivery. In this paper, the imbalance fees for wind power in Finland are calculated for year 2004 data. The base case leaves all day-ahead forecast errors to balance settlement. Imbalance cost will then be 0.62 €/MWh for dispersed wind power in Finland. The crossover benefit of combining the imbalances of wind with imbalances of load and other production prove to be large, especially if the imbalances can be combined with those of load. Different options for active trade 3 hours before delivery or internal balancing are then analysed. Trade in the intra-day market Elbas is only cost effective if trading close to spot market prices. A rough estimate shows that 400 MW of hydro power could provide internal balancing to cover 83…63 {\%} of the forecast errors of wind power, when wind power is 200…400 MW. The market value for this balancing service was 1.3 €/MWh with 2004 prices.",
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author = "Hannele Holttinen and G{\"o}ran Koreneff",
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language = "English",
booktitle = "Proceedings of European Wind Energy Conference EWEC2007",

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Holttinen, H & Koreneff, G 2007, Imbalance costs of wind power for a hydro power producer in Finland. in Proceedings of European Wind Energy Conference EWEC2007. European Wind Energy Conference EWEC2007. Milan, Italy, 7 - 10 May 2007, 1/01/07.

Imbalance costs of wind power for a hydro power producer in Finland. / Holttinen, Hannele; Koreneff, Göran.

Proceedings of European Wind Energy Conference EWEC2007. 2007.

Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientific

TY - GEN

T1 - Imbalance costs of wind power for a hydro power producer in Finland

AU - Holttinen, Hannele

AU - Koreneff, Göran

N1 - Project code: 4563

PY - 2007

Y1 - 2007

N2 - In the Nordic electricity markets wind power producers at the markets sell their production based on day-ahead forecasts and pay imbalance fees for prediction errors. Most of the wind power production goes through Balance Responsible Players that have time to adjust the planned production levels or enter trades up to the hour of delivery. In this paper, the imbalance fees for wind power in Finland are calculated for year 2004 data. The base case leaves all day-ahead forecast errors to balance settlement. Imbalance cost will then be 0.62 €/MWh for dispersed wind power in Finland. The crossover benefit of combining the imbalances of wind with imbalances of load and other production prove to be large, especially if the imbalances can be combined with those of load. Different options for active trade 3 hours before delivery or internal balancing are then analysed. Trade in the intra-day market Elbas is only cost effective if trading close to spot market prices. A rough estimate shows that 400 MW of hydro power could provide internal balancing to cover 83…63 % of the forecast errors of wind power, when wind power is 200…400 MW. The market value for this balancing service was 1.3 €/MWh with 2004 prices.

AB - In the Nordic electricity markets wind power producers at the markets sell their production based on day-ahead forecasts and pay imbalance fees for prediction errors. Most of the wind power production goes through Balance Responsible Players that have time to adjust the planned production levels or enter trades up to the hour of delivery. In this paper, the imbalance fees for wind power in Finland are calculated for year 2004 data. The base case leaves all day-ahead forecast errors to balance settlement. Imbalance cost will then be 0.62 €/MWh for dispersed wind power in Finland. The crossover benefit of combining the imbalances of wind with imbalances of load and other production prove to be large, especially if the imbalances can be combined with those of load. Different options for active trade 3 hours before delivery or internal balancing are then analysed. Trade in the intra-day market Elbas is only cost effective if trading close to spot market prices. A rough estimate shows that 400 MW of hydro power could provide internal balancing to cover 83…63 % of the forecast errors of wind power, when wind power is 200…400 MW. The market value for this balancing service was 1.3 €/MWh with 2004 prices.

KW - Forecasting

KW - wind energy

KW - electricity markets

KW - balancing costs

KW - balance settlement

M3 - Conference article in proceedings

BT - Proceedings of European Wind Energy Conference EWEC2007

ER -

Holttinen H, Koreneff G. Imbalance costs of wind power for a hydro power producer in Finland. In Proceedings of European Wind Energy Conference EWEC2007. 2007