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.
    @inproceedings{99308aca17cd451282f665f2c3e26d84,
    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.",
    keywords = "Forecasting, wind energy, electricity markets, balancing costs, balance settlement",
    author = "Hannele Holttinen and G{\"o}ran Koreneff",
    note = "Project code: 4563",
    year = "2007",
    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

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    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