Long term impact of wind power generation in the Iberian day-ahead electricity market price

Abstract

The Iberian power systems went through important changes at the legal, regulatory and organizational levels in the last 20 years. One of the most relevant ones was the increasing penetration of distributed generation, namely wind parks, together with the development of the common market involving Portugal and Spain. In Portugal, distributed generation is paid using feed in tariffs while in Spain it can choose between receiving a regulated feed in tariff or the market price plus a participation prize. The feed in scheme is now under discussion since it is argued that it represents an excessive cost that is internalized in the end user tariffs. However, this discussion is frequently conducted without complete knowledge of the real impact of wind power on the electricity market price, since it contributes to reduce the demand on the market thus inducing a price reduction. To clarify these issues we used a long term System Dynamics based model already reported in a previous publication to estimate the long term evolution of the market price. This model was applied to the Iberian generation system using different shares of wind power capacity to quantify the impact of wind power on the day-ahead electricity market price.

Repowering: An actual possibility for wind energy in Spain in a new scenario without feed-in-tariffs

“…According to [56] a reduction in the spot price is expected with the increase of wind energy integration in the Iberian market (Spain and Portugal), while [57] predicts a very small impact in household electricity prices in EU countries. Integration could be favored by repowering due to the change of the old WTGs for ones more adapted to the new technical regulations.…”

Energy related system dynamic models: a literature review

“…An SD study on the long-term impact of wind power generation on the Iberian day-ahead electricity market price is elaborated by Pereira and Saraiva (2013). In this paper, the authors describe a long-term generation expansion model that includes an optimisation module to build generation expansion plans and a dynamic model used to obtain estimates for the evolution of the demand, the electricity price and the capacity factors of candidate technologies.…”

Does wind energy mitigate market power in deregulated electricity markets?

“…The important role of prices for new generation capacity is widely acknowledged [9]. In the event that markets do not perform well, signals are inaccurate and allocation of energy resources is inefficient (e.g., [7,12,13,17,19,20]). In the current paper, we investigate the sensitivity to market structure of signals for investments in wind energy and conventional power plants and particularly to the ownership type of wind power capacity.…”