Wind in Ireland Integration and cost issues

1. Wind in Ireland Integration and cost issues David Milborrow david.milborrow@btinternet.com

2. Author’s previous encounters in Ireland • Participated with ESB and other EU utilities in EC-funded studies of wind impacts c.1988 • Member of Advisory Panel which selected turbines for Bellacorick, 1990/91 • Invited speaker at IWEA Conference, 1996 • Adviser to developer based in Co Cork on several windfarms (some now built) since 1994 • No permanent affiliations!

3. Scope of talk • Assimilating wind • Issues? • Problems? • Costs? • Limits? • Extra costs to consumers of adding wind • Sensitivities?

4. Very brief economic interlude • Much interest in “Extra cost of renewables” • Justified by “External costs” of thermal sources, esp Global Warming

5. Wind and the competition Source: Author, Windpower Monthly, January 2004

6. Levelling the playing field • Generation cost comparisons not the whole story • Value of wind = Fuel saving value + CAPACITY SAVING value + “embedded benefits” + “green value” - costs of backup • Embedded benefits may be positive or negative

7. Who has looked at integration issues? • Ireland • ESB (1990), CEGB, and other EU utilities, as part of co-ordinated study • IWEA, “Geographical dispersion of wind in Ireland”, 1999 • Garrad Hassan “Impacts” study, 2003 • University College, Dublin • UK DTI/Carbon Trust Network Study, Intermittency Module, has c.40 worldwide refs back to 1980 • Grid operators: Eltra, NGT, Nordel, and US utilities

8. Ireland is different • Could be first self-contained electricity system to operate with significant wind input • Denmark is not isolated, but source of useful data, as W Denmark system similar in size • W Denmark currently runs with wind supplying ~20% of consumption • Ties with neighbours mean that effective wind supply is about 10% - still respectable!

9. Integration topics • Electricity networks • Behaviour of wind plant • Assimilating wind into networks • Storage • Capacity credit • Transmission issues • The future

10. Electricity systems

11. Why integrated systems? • Smoothing • Demands • Generation sources • Peak/average • House: 15 • UK: 1.5 • Lower plant margins needed - • House: at least 2*peak • Large electricity system: ~1.2* peak • All leads to LEAST COSTS

12. Benefits of integrated systems

13. Lessons from western Denmark

14. Scheduling errors

15. Coping with demand variations • Generator inertia • Frequency & voltage changes • Demand management • Pumped storage • Spinning reserve • All can cope with demand increase or decrease

16. Wind characteristics

17. Smoothing makes a difference

18. Smoothing of power swings Time interval: 1 hour

19. Impacts of 20% wind

20. Running electricity systems • Managing electricity systems is all about managing risks • All estimates of uncertainty come with a range of probabilities, and • Uncertainty margins do not add arithmetically – a “sum of squares” law applies

21. Estimating the effects of wind • Establish “demand prediction error” for electricity system • UK system, 1 hour ahead, ~ 1.3%, or 400 MW • Irish system: similar %, ~40 MW • Estimate “demand prediction” error for wind • Typically ~3% standard error for distributed wind, 1 hour ahead, (“persistence” forecast) • Error with wind, based on “sum of squares”

22. Costing the effects of wind • Scheduling error with wind enables extra reserve capacity needs to be estimated • Establish cost of extra reserve, based on • Reduced efficiency of part-loaded plant • Cost of plant, or, • Market rates

23. Extra back-up capacity

24. Extra costs for backup

25. Storage • "Renewables need storage" ? • Rather misleading! • Only the intermittent sources • "Storage can transform the economics of the intermittent renewables" ? • Only if they are very low cost! • Several studies have concluded that economics must be studied separately; may be useful to system, or as reserve

26. Capacity creditsThe “Firm power” issue + + = ?

27. Capacity credits • Controversial, despite - • Most authoritative studies confirm wind HAS a capacity credit. Includes Ireland • Note that definitions a muddle • Some refer to firm power, some to thermal plant • Firm power is less than rated capacity – • For ALL types of plant!!

28. Evaluating capacity credits • 2 basic methods:- • Establish system LOLP - usually over a year • Add wind • Subtract firm power to restore original LOLP • Or (simplified approach, essentially similar) • Examine availability of wind at time(s) of peak demand

29. Capacity credits depend on:- • Amount of wind on system • Wind speeds • Wind turbine types • Winds at time of peak demand • Utility operating proceduresWhen “normalised” for differences in wind speed, good agreement between most estimates for northern Europe

30. Capacity credits – EU studies

31. Capacity credits for Ireland

32. Capacity credits: monetary values • These depend on:- • Alternative thermal plant • Test discount rates and depreciation times • CCGT plant now most common thermal option in EU, costs €500-800/kW • Capacity valued at €42-83/kW • No "universal" value

33. Benefits of distributed generation • Reduced losses • Improved reliability, + technical issues • Reduced costs if line reinforcements can be deferred or forgottenBUT • Siting is important • too much DG in remote areas will increase losses • or may advance need for line reinforcements

34. Local issues • Analysis of Delabole wind farm (UK) by SWEB showed:- • No problems with flicker • Peak demands at local substation coincided with peak output from wind farm • Wind farm output "has major influence in stabilising the 11 kV voltage level" • Analysis by P G & E also showed benefits from PV installation

35. Wind integration – conclusions • Modest costs for extra reserve • Most studies yield similar results • Capacity credits? – Yes, roughly=average power • Problem areas? • May be preferable, once wind input exceeds ~10%, to curtail wind output on a few occasions • …..but wind will NEVER impose “jolts” on the system comparable with loss of a circuit of cross-channel link

36. Carbon savings from renewables • Variety of answers in literature:- • Due to average emissions from plant mix • Due to gas plant which will not be built • Due to emissions from load following (lf) plant • In daily operations, wind displaces lf plant • New renewables build forces closure of old thermal (usually coal) plant, just as new gas • Gas plant not built? How can you be sure? • So another argument in favour of 600-850g/kWh from closure of old coal (or oil) plant

37. Extra costs of renewables • Increasing interest in “extra costs” as States define renewable targets • Estimates of extra costs from various sources • Author linked to estimate in Power UK, issue 109: ~0.3p/kWh to consumer bills for 20% wind by 2020 • Key issues: Gas prices by 2020 Wind plant costs Price of carbon under ETS

38. Possible future Irish scenarios Source of base data (green): ESBNG; author’s assumptions in red

39. Future gas prices

40. Future wind prices

41. Possible costs to electricity consumers of adding wind

42. Thank you! The End