Quantifying the impacts of wind variability

Abstract

Although the issues surrounding the introduction of wind energy into electricity networks tend to be controversial, an increasing number of analytical studies suggest that the issues can be addressed at modest cost. This paper first discusses the key characteristics of electricity networks in order to establish the technical framework within which wind operates. Drawing on actual data from western Denmark, it is shown that the additional fluctuations encountered by system operators are measurable – and manageable. The importance of aggregation is emphasised and recent data from the British system operator are used as a basis for an estimate of additional balancing costs with wind energy penetration levels up to 40%. Above a penetration level of about 5%, additional costs are incurred as the ‘capacity credit’ of wind falls, which reduces the load factor of thermal plant. Combining this ‘backup’ cost with the costs of extra balancing, it is suggested that the extra cost to the consumer of wind variability at the 40% level is likely to be around £6/MWh – about 5% of the typical domestic electricity price. Factors that may reduce this extra cost, such as demand-side management and better wind forecasting, are also discussed.