An analytical storm over the wind power trades : from price-based to market-based incentives, the new project development and O&M tools

Introduction

To keep pace with the rapid growth of intermittent energies, the current regulations evolve rapidly: feed-in tariffs tend to be replaced by trading on spot markets, supplemented by feed-in premiums. Those changes encourage the emergence of new players in the electricity markets, new markets, and new business models.

Technically, short-term forecasting becomes increasingly necessary to ensure the balance of the electrical grid, and to manage the intermittency of those energy sources. Wind power is particularly fluctuating, but accurate forecasts make it possible to integrate much more energy into the grid.

Small and medium-size developers may struggle to face those changes, as it drives them out of their core business. The latest technologies developed for wind power long-term and short-term forecasting can help them to adapt.

This presentation will focus on two innovative tools meeting the new needs of the wind power sector:
- new methodologies to determine the yearly income and the business plan of wind farm projects under market-based systems
- wind power forecasting and decision-support tools for the farms daily management and electricity trading


Approach

This speak explains why and how the issues about wind integration changed recently, and which new rules and support mechanisms were set, especially in Europe.

It goes on with the new players of the electricity market, and focuses on short-term forecasting. We study its end-uses, and the technologies breakthrough that allow to improve their quality. An example is given, combining wind power forecasts, a storage system and decision science to optimize a wind farm in a microgrid context, in a Carribean island.

The consequences of those changes for developers ar also studied, and new methodologies are presented, to build the business plan and evaluate the yearly income of projects.



Main body of abstract

1. Key tools for daily wind integration
2. Incentives & reglementations
2.1. Example: feed-in tariff in Portugal
2.2. Focus on feed-in premium
2.3. Example: feed-in premium in France
2.4. Overview of Europe
3. The spot market
3.1. Players, rules & tools
3.2. Focus on short-term forecasting
4. Wind power forecasting
4.1. A recent technology breakthrough
4.2. Forecasting technologies
4.3. Example : classical use of forecasting
4.4. Example : microgrids, storage & decision sciences
5. New tools for project development under market-based systems
5.1. Methodology for resource asssesment
5.2. Yearly income
5.3. Business plan

Conclusion

The presentation analyzed the changes that market-based systems bring into wind power resource assesment, grid integration, support mechanisms, trading and forecasting.

It showed the usefulness of wind power short-term and long-term forecasting:
- Short-term forecasting helps the grid integration of wind power, allows operators to optimize their trades, to minimize their grid penalties and to manage storage systems.
- Long-term forecasting provides tools for developers to build relevant and secure business plans for their wind farms projects.

The whole wind power sector benefits from the use of forecasts : they reduce the grid costs and, in long term, help to set an optimal grid planning. Forecasts therefore participate to a better integration in the electrical mix.




Learning objectives
- The new regulations and incentives in Europe (from feed-in tariffs to spot market & feed-in premiums)
- The new players of the electricity markets (capacity & flexibility agregators, grid balancing entities, etc.)
- The emerging markets and business models (short-term forecasting, agregation, renewable energy trading, etc.)
- Short-term renewable energy forecasting as a tool to balance the electrical grid, and its several end-uses
- The latest technologies developed for wind power forecasting (meteorology, downscaling by Computational Fluid Dynamics, artificial intelligence, uncertainty assessment, decision sciences)
- The developers’ new needs for investments in wind power projects