Abstract
In this paper aspects related to handling of intraday imbalances for hydro and wind power are addressed. The definition of imbalance cost is established and used to describe the potential benefits of shifting from plant-specific schedules to a common load requirement for wind and hydropower units in the same price area. The Nordpool intraday pay-as-bid market has been the basis for evaluation of imbalances, and some main characteristics for this market has been described. We consider how internal handling of complementary imbalances within the same river system with high inflow uncertainty and constrained reservoirs can reduce volatility in short-term marginal cost and risk compared to trading in the intraday market. We have also shown that the imbalance cost for a power producer with both wind and hydropower assets can be reduced by internal balancing in combination with sales and purchase in a pay-as-bid intraday market.
Highlights
With the increasing penetration of wind in the European market, power producers are to a larger extent managing combined portfolios of wind- and hydropower
The contribution of this paper is to evaluate if assets in a combined portfolio of wind and-hydropower only should rely on the market when clearing individual imbalances, or if it is potential value obtained by internal coordination in addition to interaction with an intraday pay-as-bid market
In this article we have shown how the imbalance cost for a power producer with both wind and hydropower assets can be reduced by internal balancing in combination with sales and purchases in a pay-as-bid intraday market
Summary
With the increasing penetration of wind in the European market, power producers are to a larger extent managing combined portfolios of wind- and hydropower In this context it is interesting to evaluate the value of internal coordination for planning and balancing of combined portfolios owned or operated by the same company. Basic economic theory suggests that as long as all market actors bid production at marginal cost, the optimal balance of consumption and production will be established in the market. The contribution of this paper is to evaluate if assets in a combined portfolio of wind and-hydropower only should rely on the market when clearing individual imbalances, or if it is potential value obtained by internal coordination in addition to interaction with an intraday pay-as-bid market. The topic is evaluated qualitatively with focus on some identified market and operational challenges, as well as quantitatively with case studies for an actor managing wind- and hydropower assets
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