Some power markets may be seeing possible signs of recovery. Spark spreads appear to have bottomed out, and reserve margins have begun to fall in some markets. As Figure 1 shows, recovery is...
Plunging Wind Into the Grid
is not expected to result in any systematic financial consequences to other California ISO market participants. Though wind projects enjoy these new exemptions when participating in the ISO's markets, they are still responsible for transmission-line congestion charges.
Rather than netting scheduled energy deliveries on a 10-minute basis, as is the California ISO's standard procedure, the intermittent resources participants net the difference hourly. A monthly settlement process then nets deviations from forecasts across all hourly intervals at the weighted average electricity price for the month. Relying upon a monthly time frame for settlement is preferred by the wind industry. The variability of power production typically smoothes out the excess production and the deficit production since wind power follows seasonal patterns that are fairly predictable on a monthly basis.
This approach addresses the risk of imbalance energy costs linked to schedule deviations without shifting costs to other generators. It also lowers the financial risks for wind generators and operators.
In return for this modified settlement process, each wind generator participant is required to provide meteorological and energy production data in real time to be used in the future forecasting models for each specific facility. This will help build a database and analytical tools to better understand the generation profile for each wind project in California. This requirement allows California's wind industry to better understand how each project's production matches California loads. It also allows for a much more intelligent management of the diversity of wind projects serving California.
According to CEC figures, 11 percent of power production from California wind projects is directly matched to daily peak periods of demand; 26 percent of power production is during mid-peak daily demand intervals. The remaining 63 percent of electricity generated occurs during the off-peak hours in spring and summer, a time of the year when the demand for peak power gradually increases.
However, a review of monthly average wind speeds at various developed and undeveloped wind sites in California performed by the Renewable Energy Policy Project discovered that significant diversity exists among wind projects due to their own unique wind patterns. While direct matches to daily demands in peak occur mostly at the Solano County wind resource area, and occasionally at the Altamont Pass, monthly average wind speed patterns roughly coincide with California's seasonal demand patterns. A diversity of wind farm sites also can help match daily demand much better than in the past. For example, the Fairmont Reservoir wind resource area in Los Angeles County appears to trade off Tehachapi's lower availability in the middle of the day.
The larger a wind farm is, the less of a problem wind's short-term variability becomes, since winds pass through arrays of turbines at different intervals, smoothing out the effects of the variations. The overall power curve of the wind farm has less and less intermittency as more and more wind turbines dispersed throughout a wind resource area are added to the wind farm control area.
By collecting real-time data on the performance of all wind projects operating in California, the ISO will, for the first time, have