Improving wind power market value with various aspects of diversification

The wind generation share in many European bidding zones is now large enough to affect the market value of wind power, and wind energy is getting less-than-average market price in day-ahead markets. As alternatives to investing in dedicated energy storage, there are two main ways to mitigate the decreasing market value trend. The first is employing different diversification measures (geographical spread, alternative wind turbine technologies, integration with solar). The second is implementing demand flexibility measures. Examples of these measures from some European and USA studies are given in this article, which stems from the international collaboration under IEA Wind TCP Tasks 25 and 53.

I. Introduction

The amount of wind power in the European power system is increasing, and towards 2030 a doubling of capacity to more than 400 GW is expected. The Europe-wide share of wind power is already approaching 20% of demand on a yearly average. During windy days and hours, the generation in many European bidding zones will exceed demand [1]. The so-called merit-order effect (i.e., a decrease of electricity prices at the power exchange due to an increased supply of renewable generation in the market pushing out conventional generation stacks) has been evident in current electricity market situations [2] and its relevance is being discussed for future electricity market scenarios [3] [4]. This effect is impacting the market value of wind power – wind energy is receiving less than the average market price in day-ahead markets [3].