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Consumers and the Value of Wind Evidence from Ireland. Impact of Wind Generation on Wholesale Electricity Costs in 2011. Matthew Clancy Lead Policy Analyst EWEA , Vienna, 7 th February 2013. The Debate in Ireland in 2011. Two opposing views: - PowerPoint PPT Presentation
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Consumers and the Value of WindEvidence from Ireland
Impact of Wind Generation on Wholesale Electricity Costs in 2011
Matthew Clancy
Lead Policy Analyst
EWEA , Vienna, 7th February 2013
The Debate in Ireland in 2011
• Two opposing views:– “.. relatively expensive form of electricity generation ..”
Irish Academy of Engineers, 2010
– “…[Wind energy] is already having a significant impact on energy costs, with the total savings to consumers set to reach €36.6m in 2011.” IWEA 2011
• Need for independent evidence to add to the debate– SEAI and the Irish TSO EirGrid, joint study
Ireland as a case study
• Ireland’s electricity market structure supports this analysis
• Mandatory Gross Pool market – transparent market price, volumes
and systems operations
• Publically available data on generators– Allows detailed modelling of market
• Large deployment of wind energy– 17% of electricity consumption in
2011
What contributes to the Price of Electricity?
Electricity Price Components0
1
2
3
4
5
6
Wholesale Carbon Price Transmission Renewables Vat
Con
sum
er P
rice
Wholesale costs
The ETS carbon price
Transmission costs
Renewable support schemes
Tax on the delivered electricity
How to isolate the impact of wind?
Wind generation increase
Wholesale Price decrease Constraint costs increase
Supports for renewable increase
Short Term
How to isolate the impact of wind?
– More wind, more wholesale price reductions
– Extra investment in transmission will be required
– More capital investment in thermal generation • Low running duty • Lower market prices
Longer Term
Focus on 2011
• Two scenarios examined
– 1) 2011 thermal generation & 2011 total expected wind capacity
– 2) 2011 thermal generation only & no wind generation
Modelling Insights
No wind Expected 2011 Wind capacity€0
€200
€400
€600
€800
€1,000
€1,200
€1,400
€1,600
€1,800
€2,000€1.91 Billion €1.91 Billion
Wholesale Cost Constraints PSO
Tota
l ele
ctri
city
cos
t (m
illio
n €)
Wholesale costs €74 million less in wind scenario
Constraint costs €24 million higher in wind scenario
Renewable support €50 million higher in wind scenario
Results
• Wind generation reduces the wholesale market cost by €74 million in the model
• The cost of constraints and renewable support offset this reduction
• The modelling showed wind did not increase the cost in the scenarios examined
Modelling 2020 impacts
• Ireland aims to have 40% of electricity demand coming from renewable sources by 2020– New transmission infrastructure and operational regimes
required.– Investment in thermal generation required to maintain system
security.
• Preliminary results show that consumer bills could rise marginally
• Cost to consumer in 2020 is highly dependent on fossil fuel prices
The Sustainable Energy Authority of Ireland is partly financed by Ireland’s EU Structural Funds Programme co-funded by the Irish Government and the European Union.
Thanks for your attention [email protected]
http://www.seai.ie/Publications/Energy_Modelling_Group_/Energy_Modelling_Group_Publications/Impact_of_Wind_Generation_on_Wholesale_Electricity_Costs_in_2011.pdf
