Power markets are an important driver for operation of the power system in both a Danish and European context. In relation to integration of variable renewable energy sources, the role of electricity markets is primarily to ensure a dynamic merit order dispatch. It is important to realise that this can also be obtained with a central dispatch function as long as marginal generation costs are known for all generation units, and operation is not distorted by other incentives and contracts.
Within a merit order dispatch system, wind power and PV will always be dispatched first, and will in principle not need priority access to ensure economic dispatch due to the marginal costs of almost zero. However, maintaining an attractive investment climate for wind power is also an important consideration.
Apart from the principle behind a merit order dispatch, incentives need to be in place to ensure adjust-ment of the dispatch plans according to altered conditions, such as updated wind power forecasts. Again, while these incentives are primarily based on a market setup in Denmark, they can in principal also be im-plemented within a vertically integrated and operated power system. Important topics for further discussion within the Indonesian context include (see also section 8.6 for further comments on the actual power sys-tem operation):
• What are the current dispatch procedures in place today?
• What are the incentives for power generators within:
o Flexible operation planning
o Balancing power and adjustment of dispatch plans o Operational reserves
Incentives within the above-mentioned topics will be important in order to enable efficient integration of variable generation.
6.2.1 References
1. Ea (2015): The Danish Experience with Integrating Variable Renewable Energy. Study on behalf of Ago-ra Energiewende
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Operating the power system with wind power in Denmark 7
This chapter shares Danish experiences on balancing wind power in daily operations, looking into the specialised operational planning tools used in daily operations by the transmission system operator. Par-ticular emphasis will be on forecasting of generation and demand. It will likewise discuss the capacity and reserve requirements of the Danish power system and how the integration of wind power has affect-ed these requirements. At the end of the chapter, is an evaluation of the relevance of the Danish experi-ences in an Indonesian context, and possible means to overcome the challenges that the Indonesian power system experience will be discussed.
7.1 Wind power and system flexibility
Ensuring secure and efficient operation of an electricity system with large shares of variable wind power and PV requires a high degree of flexibility in both generation and transmission. In the future, flexibility in demand is also expected to contribute. In the Danish system, this flexibility is mainly obtained via very flexi-ble power plants and exchange with neighbouring countries in the international electricity market. Conven-tional Danish coal-fired power plants are able to perform fast up and down regulation and stable operation at very low generation compared to rated output. Denmark is well interconnected to both the hydro-based electricity systems in the Nordic countries, and the thermal, nuclear, wind power and PV hydro-based sys-tems on the European Continent.
In the following figures, the flexibility is illustrated with an example of dispatch for a week in September 2015 with an average wind power generation of 51% of Danish demand.
Figure 7-1: Demand and wind power generation for last week in September 2015 with wind power share 51% of demand.
During this week, wind power generation varies from almost none on Monday morning to exceeding de-mand during the weekend. It is obvious that a full utilisation of the wind power generation without curtail-ments requires a very dynamic response from the remaining system. In the next figure, the resulting dispatch balancing the Danish system is illustrated.
Page 60/103 Integration of Wind Energy in Power Systems Figure 7-2: Resulting dispatch for last week in September 2015.
The top-curve illustrates the demand as in the previous figure, and the coloured areas illustrate the 4 sources for of electricity: Wind power, local plants, large plants and import. An area below "0" illustrates exports from Denmark. The high variability of the wind power is balanced via substantial variations in the generation from both local and large power plants, and in the exchange with neighbouring countries from imports to exports.
On Monday the wind power generation is very low, and the generation from power plants and import is high. Early on Wednesday morning the wind power generation almost covers the whole demand and the input from power plants is very limited. This morning is actually a historical day, in the sense that all large power plants in the Western part of Denmark were shut down, and in the Eastern part only 10 MW was gen-erated via large plants. During these morning hours the demand in Denmark was covered by wind power with very limited input from power plants and net export. During the weekend it was very windy, and the wind power generation exceeded the demand in Denmark and the system was balanced via net export.
But even in this situation with a very high wind power generation there was a major import from Germany, where wind power was also dominating in the Northern part of the country.
The following figure illustrates the resulting dispatch in further detail for the hour starting at 5 am Sunday morning. The map shows substantial transit from Germany through Denmark to the hydro dominated system in the Nordic countries. The hydro reservoirs in mainly Norway act as a "battery" for the Danish and German wind power, and the example illustrates the potential for balancing variable wind power by hydropower with reservoirs in combination with a flexible thermal generation system.
In the Danish case, the very dynamic dispatch is a result of the market clearing and not a central dispatch function. Only the final physical balancing of the two Danish market areas, Denmark West and East, is en-sured with regulating power purchased by the system operator Energinet.dk in the regulating market as described in the previous section on electricity markets.
Page 61/103 Integration of Wind Energy in Power Systems Figure 7-3 Resulting spot prices, generations and imports/exports Sunday, 6 September 2015, 5 am.