Grid Integration Costs of Fluctuating Renewable Energy Sources

TL;DR

This paper analyzes the costs associated with integrating intermittent renewable energy sources into the German power grid, focusing on forecast uncertainties and strategies to reduce these costs through operational improvements and market mechanisms.

Contribution

It quantifies profile service costs in Germany and explores methods to reduce these costs via prediction accuracy, market optimization, and curtailment strategies.

Findings

Profile service costs depend on RES prediction errors.

Cost reduction is possible through improved forecasting.

Market-based optimization and curtailment can lower costs.

Abstract

The grid integration of intermittent Renewable Energy Sources (RES) causes costs for grid operators due to forecast uncertainty and the resulting production schedule mismatches. These so-called profile service costs are marginal cost components and can be understood as an insurance fee against RES production schedule uncertainty that the system operator incurs due to the obligation to always provide sufficient control reserve capacity for power imbalance mitigation. This paper studies the situation for the German power system and the existing German RES support schemes. The profile service costs incurred by German Transmission System Operators (TSOs) are quantified and means for cost reduction are discussed. In general, profile service costs are dependent on the RES prediction error and the specific workings of the power markets via which the prediction error is balanced. This paper shows both how the prediction error can be reduced in daily operation as well as how profile service costs can be reduced via optimization against power markets and/or active curtailment of RES generation.