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.
    @inproceedings{0ed7ccceac91444d9e6b6c0e2a5eb7ba,
    title = "Prediction Errors and Balancing Costs in Finland Using Short Term Prediction for Different Geographical Areas",
    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.",
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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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    PY - 2013

    Y1 - 2013

    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.

    AB - 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