How Countries Can Integrate Wind Power Smoothly Into Power Systems

High penetration of wind power is foreseen in many countries and regions globally. Therefore the impacts of wind power on power system reliability are widely studied. Wind integration impacts report by a research task for the Wind agreement of International Energy Agency (IEA) has been compiled from work done in Denmark, Finland, Germany, Ireland, Netherlands, Norway, Portugal, Spain, Sweden, UK and USA.

Adding large amounts of wind power requires reinforcing the existing transmission grid, including the interconnectors between countries and regions. New transmission lines may be needed where the wind resource is situated far from the existing network. Wind power will also increase the use of operational balancing power and thus increase balancing cost in the power systems.

The estimates for added balancing costs from investigated studies are increasing wind power production costs by 1-4 €/MWh. This is 10% or less of the wholesale value of the wind energy. Experience from West Denmark shows that the balancing cost from the Nordic day-ahead market has been 1.4-2.6 €/MWh for a 24% wind penetration (of gross demand). This is in the middle of theoretically estimated results.

Production from larger areas helps integration

It is easier to balance load and wind production from larger areas. This is because both wind variability and uncertainty will be reduced when geographically diverse power plants are aggregated. Additionally, larger balancing areas also can pool balancing resources. Large open electricity markets combined with intra-day and real-time trading lead to lower electricity costs. This market design also facilitates wind integration, because forecast errors of wind power production are much lower some hours ahead than day-ahead, and forecast errors also decrease when combining distributed wind power plants.

A wide, strong transmission network is a prerequisite for large electricity markets and aggregation benefits to smooth out variability. Increase in interconnection capacity between certain countries is needed in addition to national efforts, allowing stronger trading of (also) wind generated energy. Building the transmission for final amount of wind power will be more cost effective than reinforcing the grid piece by piece. Ambitious wind power targets in Ireland, Denmark, Germany, UK and US already foresee major upgrades in the transmission network. This is challenging, as building permits for new lines are difficult to obtain.

Studies show that despite its variability, wind power can contribute for a certain percentage to meeting the peak loads in a reliable way. This so called capacity value of wind power is lower than for conventional power, and will decrease as the wind penetration level increases.

New electricity storage has still low cost effectiveness for wind penetration levels of 10-20% (excluding some hydro power and pumped storage). With higher wind penetration levels the extra flexibility offered by storage will be beneficial for the power system operation. However, other forms of flexibility from generation units or flexible loads can offer cheaper solutions, if available to the power system. In any case, it is not cost effective to provide dedicated back-up for wind power in large power systems, just as it is not done for individual electricity consumption.