Imperial College

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Power System Reserve Requirements and Costs with
Intermittent Generation A Revisit of Statistical
Principles Seminar at Open University Dennis
Anderson January 24, 2006
Imperial College Centre for Energy Policy
Technology
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Questions discussed

• What are the required additions to reserves?
• What is the implied capacity credit?
• What are the associated costs of
• (a) reserve capacity?
• (b) balancing?
• How do estimates compare among key UK studies?

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Basic Statistical Parameters for Capacity Effects

• Mean values and ranges
• Demand 100 5
• Thermal Plant 92 7
• Wind Plant 32 68, - 32
• Old Rule of Thumb for Thermal Systems
• System margin (1 demand uncertainty)/plant
  availability 1
• 1.05/0.85 1 ? 0.2 to 0.25

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Statistical principlethermal system
What happens when ss rises?
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Effects of Variance on Required System Margin
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Estimating Required Reserve Capacity

• Two step iterative approach. Estimate
• Frequency distribution of system margin with
  intermittent capacity on system.
• Conventional capacitye.g. OCGTs or retained
  thermal plantrequired to maintain LOLP at same
  level as that for a system with conventional
  plant only ? additional reserve capacity.
• Capacity credit can be inferred from this.

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Results (1)
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Results (2)
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Comparison with Other Studies (1)

• Backup Capacity, Capacity Credit,
• Dale et al 18.9 19.2
• SCAR 18.3 22.9
• Carbon Trust 21.2 20.0
• R. A. Eng. 65.0 ?
• Present study 19.1 22.1
• --------------------------------------------------
  -
• Inferred from Backup capacity CF/A CC
• (CF Capacity Factor A availability of
  conventional plant)

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Comparison with Other Studies (2) Costs p/kWh of
Wind

• Capacity Balancing Other
  Total
• Dale et al 0.32 0.25 0.08 0.65
• SCAR 0.26 0.22 ? 0.48
• Carbon Trust 0.45 0.20 ?
  0.65
• R. A. Eng. 1.86 ? ? 1.86
• Present study 0.43 0.25 0.05
  0.73
• --------------------------------------------------
  --------------------
• Other expected incremental energy cost of using
  reserves
• Inferred from their results
• Appears to exclude balancing costs
• Upper limit of other studies
• All converted to 10 discount rate

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Conclusions (1)

• Importance of System Simulation Studies
• Reasonable agreement between studies on balancing
  costs
• Most studies in reasonable agreement about
• (a) capacity credit ( 19- 23 )
• (b) reserve requirements ( 18-21 ), and
  hence
• (c) costs of intermittency ( 0.5 to 0.7 p/kWh)
• Capacity credit a useful rule of thumb for
  monitoring adequacy of system margin. As peak
  demand
• Margin Conventional capacity CC 100

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Conclusions (2)

• The Cold-Snap-No-Wind Scenario, with 20 market
  share
• conventional capacity on system would be around
  110 of expected peak demand with 20 backup of
  wind
• Cost criterion for investment in intermittent
  generation
• Capacity costs Value of capacity credit
• Fuel cost savings
• Balancing costs
• Is intermittent generation firm at low market
  shares?
• Importance of a permanent institutional
  arrangement to undertake research on, estimate
  and monitor reserves.