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Innovative Electricity Markets to Incorporate Variable Production (2008)

Client: International Energy Agency (IEA) - Renewable Energy Technology Deployment

The share of windpower on electrical grids is expanding quickly. As a variable producer of electricity wind faces technical and market barriers gaining access to the grid. This report to the IEA was conducted by SGA in cooperation with European counterparts, IPA Consultants (Scotland) and COWI (Denmark) to explore the nature of these barriers and to report on the progress IEA countries (Great Britain, Ireland, Italy, France, Germany, the Netherlands, Finland, Norway, Denmark, Sweden and Canada) have made in innovating to address the barriers. In Canada. SGA investigated two provinces: Alberta and Ontario. Separate reports were made for each jurisdiction and then summarized.

The reports find wind generators or variable renewables experience a number of barriers in trying to integrate successfully in markets.

  
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Market Issues include:
Variable and less predictable output: means there is a requirement for ancillary services and can lead to greater exposure to short term markets and balancing prices.
Small: typically renewable developments are smaller projects than conventional generation (although there are increasing examples of large renewable developments). This means that the costs of complex markets can be onerous especially for independents.

Cross Border Trading issues include:
Variable and less predictable output: means that purchasing blocks of capacity in advance auctions in daily, monthly or yearly blocks is not appropriate.
Lack of consistency across borders: this is not only an issue for variable renewables, but also for other generation. Renewables are particularly impacted because of their variability and the lack of consistency and transferability in renewable support mechanisms.

Grid access issues include
Remote Location:
Clusters: Reinforcement investment to accommodate variable renewables may benefit multiple sites.
Lower Load Factors: This is particularly the case for transmission charges.
Dispatch: variable generators can only be dispatched down rather than up

The full report is available on-line at the IEA website http://www.iea-retd.org/page.aspx?idsection=47

  
     
 
 
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