A new system for buying and selling electricity had a potentially devastating effect on the value of wind power in the UK in its first week of operation.
Researchers who analysed energy prices and wind energy outputs in the first week of the New Electricity Trading Arrangements (NETA), have concluded that a wind farm would have made a loss selling electricity to the grid.
NETA, introduced on 27 March, requires suppliers to forecast the amount of energy they will supply 3.5 hours ahead of delivery. The system then punishes energy suppliers if they supply less than their predicted amount of energy by having them pay market price for the shortfall. If they supply more energy than promised, they can only charge a lower price for the excess amounts - or in some cases have to pay for supplying more electricity to the grid.
"The most profitable way of operating a wind farm so far has been to turn it off," says Professor Goran Strbac, a Tyndall Centre researcher based at Manchester's UMIST (University of Manchester Institute of Science and Technology).
"While there had been some concern about the adverse effects of NETA in the lead up to its introduction, the harsh reality of the first week of operation has taken everyone by surprise," he says.
A report by Professor Strbac and Dr Graeme Bathurst, also at UMIST, shows that in the first week of NETA, a 10MW wind farm in the UK would have made a loss. The main causes of such a loss were peaks in the market price of electricity. Professor Strbac says energy regulators are now considering urgent modifications to the way electricity prices are calculated to avoid such price spikes. But he says renewables are not being considered specifically. "Due to the intrinsic difficulty of forecasting available winds and other sources of renewable energy, these suppliers are likely to suffer under NETA," says Professor Strbac.
NETA replaces the old England and Wales Pool as the commercial mechanism for buying and selling wholesale electricity. The previous system did not penalise suppliers for failing to deliver as forecast.
Professor Strbac and other researchers with the Tyndall Centre for Climate Change Research have commenced a project that aims to assist the UK integrate renewable energy sources into the electricity system. They are investigating the technical and regulatory improvements required to allow the use of low carbon energy sources, which aim to pursue climate change objectives.
Professor Strbac and Dr Bathurst's analysis raises discussion of the impacts NETA will have on the development of renewables associated with longer-term environmental policies, such as last week's announcement of 18 new offshore wind farms, to help meet the UK Government target of 10% of all electricity to be delivered by renewables by the end of the decade.
More details are provided in the Tyndall Centre Briefing Note 2: The Value of Intermittent Renewable Sources in the First Week of NETA, available on the Web at http://www.tyndall.ac.uk/publications/briefing_notes/note02.shtml
For further information please contact:
1. Professor Goran Strbac, Tyndall Centre, UMIST: phone (0161) 2004803;
viertelstündliches EVU-Lastprofil für einen Tag im Juni
Windkraftanlagen können dem nachgefragten Bedarf nicht folgen,
ihre Eenergie ist im wesentlichen nicht vorher kalkulierbar.