Wind integration cost in China: A production simulation approach and case study

Abstract

The integration cost of large-scale variable renewable energy (VRE) in China’s coal-dominated inflexible power systems is of significant concern when studying the generation cost of VRE. One key component of studies about integration cost is the question of how to estimate the impact of large-scale VRE integrated into power systems on the operation mode of conventional generators. It is intuitive to compare system-level costs with and without VRE under a benchmarked system. In this study, we employ a unit commitment (UC) model to simulate the output of various types of units based on minimizing the total power system cost. Then, we estimate the conventional generator operation cost change caused by the change of operation mode. Using the power system in Jilin province as a typical case, the integration cost will increase with increased VRE penetration, reaching 123.5 CNY/MWh at 40% penetration level. The idle cost of the coal-fired power units accounts for 69% of the integration cost at 40% VRE penetration, the highest proportion; wind curtailment cost ranks second for 26%, while the incremental operating cost of coal power accounts for 4.7%. With a long-term perspective, establishing a complete power market and adopting an appropriate pricing mechanism to incentivize system flexibility is the best solution for adopting VRE.