Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas

Jari J. Miettinen, Hannele Holttinen

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

Abstract

In order to participate to the Nordic Electricity market, wind power producers have to forecast their production 12-36 hours ahead. After the realized productions are certain the producer must deal with the prediction errors in the balance settlement. The imbalance prices are formulated in the Nordic balancing (real-time) market called Regulating Power Market. This paper studies how much the pooling of wind power generation will lower the imbalance costs and prediction errors for different sizes of market actors. The main metric for analysing the benefit of pooling is balancing cost/MWh for the whole yearly generation. Based on synchronous data on imbalance prices and wind power forecasts, balancing costs for a single site were 2.4-3.1 /MWh for years 2010-12, whereas balancing costs for aggregated wind power production on the coastline of Finland varied between 1/MWh and 1.5/MWh. Thus, balancing costs can be halved by pooling the wind power production from wide geographical area instead of bidding production from a single site, for current market structure. The imbalance prices have varied from year to year, and the results show that the imbalance prices have a great impact on the balancing costs.
Original languageEnglish
Title of host publicationProceedings
Subtitle of host publication12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK
Place of PublicationDarmstadt, Germany
PublisherEnergynautics GmbH
ISBN (Print)978-3-9813870-7-0
Publication statusPublished - 2013
MoE publication typeB3 Non-refereed article in conference proceedings
Event12th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Farms, WIW13 - London, United Kingdom
Duration: 22 Oct 201324 Oct 2013
Conference number: 12

Conference

Conference12th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Farms, WIW13
Abbreviated titleWIW13
CountryUnited Kingdom
CityLondon
Period22/10/1324/10/13

Fingerprint

Wind power
Costs
Power generation
Power markets

Keywords

  • Wind forecasting
  • uncertainly
  • variability
  • balancing cost

Cite this

Miettinen, J. J., & Holttinen, H. (2013). Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas. In Proceedings: 12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK Darmstadt, Germany: Energynautics GmbH.
Miettinen, Jari J. ; Holttinen, Hannele. / Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas. Proceedings: 12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK. Darmstadt, Germany : Energynautics GmbH, 2013.
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Miettinen, JJ & Holttinen, H 2013, Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas. in Proceedings: 12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK. Energynautics GmbH, Darmstadt, Germany, 12th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Farms, WIW13, London, United Kingdom, 22/10/13.

Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas. / Miettinen, Jari J.; Holttinen, Hannele.

Proceedings: 12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK. Darmstadt, Germany : Energynautics GmbH, 2013.

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

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N2 - In order to participate to the Nordic Electricity market, wind power producers have to forecast their production 12-36 hours ahead. After the realized productions are certain the producer must deal with the prediction errors in the balance settlement. The imbalance prices are formulated in the Nordic balancing (real-time) market called Regulating Power Market. This paper studies how much the pooling of wind power generation will lower the imbalance costs and prediction errors for different sizes of market actors. The main metric for analysing the benefit of pooling is balancing cost/MWh for the whole yearly generation. Based on synchronous data on imbalance prices and wind power forecasts, balancing costs for a single site were 2.4-3.1 /MWh for years 2010-12, whereas balancing costs for aggregated wind power production on the coastline of Finland varied between 1/MWh and 1.5/MWh. Thus, balancing costs can be halved by pooling the wind power production from wide geographical area instead of bidding production from a single site, for current market structure. The imbalance prices have varied from year to year, and the results show that the imbalance prices have a great impact on the balancing costs.

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Miettinen JJ, Holttinen H. Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas. In Proceedings: 12th Wind Integration Workshop, International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants, 22-24 October 2013, London, UK. Darmstadt, Germany: Energynautics GmbH. 2013