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[en] Highlights: • Describes merit-order effect of wind energy in the Iberian electricity market. • Correlation between wind energy production in Portugal and Spain was 0.73 in 2015. • Estimates the consequence of wind variations in Iberia for Portuguese end-users. • Demonstrates how policy decisions within a common market have spill-over effects. - Abstract: Wind generation in Portugal and Spain has grown due to a decrease in technology cost and the availability of renewables electricity generation incentives. There is a strong interconnection between Spain's and Portugal's transmission systems, resulting in common prices in both countries. However, Portuguese and Spanish producers receive the incentives for producing wind-based electricity that are specified in their own national policies, resulting in different costs to rate-payers. In this paper, we estimate the costs to Portuguese rate-payers associated with the current market design and policy incentives. To do so, we regress hourly spot electricity market prices as a function of hourly wind generation, and estimate the resulting feed-in-tariff costs distributional effects over the various rate-payer categories. Total costs for rate payer are at the minimum level if joint wind generation in Portugal and Spain increases by 5.5% from what it is today. If wind generation increases much further, then the costs increase due to the FiT overcost increase. If wind generation decreases from current levels, then costs also increase due to the merit-order effect. Furthermore, we find that rate-payer categories will endure different portions of the costs, with an increase in wind generation penalizing predominantly ≤ 20.7 kVA rate-payers.
[en] We investigate the economic viability of coupling a wind farm with compressed air energy storage (CAES) to participate in the day-ahead electricity market at a time when renewable portfolio standards are not binding and wind competes freely in the marketplace. In our model, the CAES is used to reduce the risk of committing uncertain quantities of wind energy and to shift dispatch of wind generation to high price periods. Other sources of revenue (capacity markets, ancillary services, price arbitrage) are not included in the analysis. We present a model to calculate profit maximizing day-ahead dispatch schedules based on wind forecasts. Annual profits are determined with dispatch schedules and actual wind generation values. We find that annual income for the modeled wind–CAES system would not cover annualized capital costs using market prices from the years 2006 to 2009. We also estimate market prices with a carbon price of $20 and $50 per tonne CO2 and find that revenue would still not cover the capital costs. The implied cost per tonne of avoided CO2 to make a wind–CAES profitable from trading on the day-ahead market is roughly $100, with large variability due to electric power prices. - Highlights: ► We modeled a wind farm participating in the day-ahead electricity market. ► We calculated optimal day-ahead market offers based on wind forecasts. ► Revenue is then calculated using measured wind power. ► We find that revenue is insufficient to cover capital costs at current market prices.
[en] A reconfigurable network can change its topology by opening and closing switches on power lines. We use real wind, solar, load, and cost data and a model of a reconfigurable distribution grid to show that reconfiguration allows a grid operator to reduce operational losses as well as to accept more intermittent renewable generation than a static configuration can. Net present value analysis of automated switch technology shows that the return on investment is negative for this test network when considering only loss reduction, but that the investment is attractive under certain conditions when reconfiguration is used to minimize curtailment. - Highlights: ► Reconfiguration may reduce losses in grids with solar or wind distributed generation. ► Reconfigurable networks can accept more solar or wind DG than static ones. ► Using reconfiguration for loss reduction would not create a positive ROI. ► Using reconfiguration to reduce curtailment usually would create a positive ROI.