A discussion paper has been released by AESO outlining the market rules and operational tools for consumers to pay the cost of any increased ancillary services needed to balance the impact of wind power in the supply and demand scales. The proposed Market and Operational Framework (MOF), says AESO's Warren Frost, will replace the cap with a "set of operational tools and rules" that developers can factor into their project planning and their project economics.
"I expect that will mean a build greater than 900 MW, but where it will end up I don't know. That is a tough question, but we certainly are committed to creating a framework that allows people to self-select and let the market determine to what extent wind is developed in Alberta," he says.
The proposal is one the province's wind industry had been looking for. It has criticised the cap as premature and based on limited data. "We want to recognize the very positive steps the AESO has taken to move to this point, in terms of having looked at the question of wind integration, coming to a better understanding of the types of tools that are available to manage that, and proposing a framework that essentially allows those tools to come together and be used as a package," says Robert Hornung of the Canadian Wind Energy Association (CanWEA). "But it is a framework, so there is still a lot of detail that needs to be worked out."
Hierarchy of tools
The MOF essentially lays out a hierarchy of steps system controllers will use to manage wind power in their day-to-day operations. Wind power facilities will forecast their output for the next day as well as two hours prior to the start of the delivery hour. The system operator will incorporate the forecasts into an operational plan, including the procurement of regulating reserves and load following services that can be dispatched as needed to balance the energy market. In cases where the system cannot absorb all of the wind power being generated, it says, wind farms may need to be dispatched down or off. "To do this, wind power facilities will be required to have power management capabilities," the MOF says.
The potentially thorny issue of who will pay is also tackled. The decision to allocate the cost of any required increase in ancillary services to load is a key one, says Hornung. "We think that is a position that makes sense. Wind energy is providing electricity and benefits for all Albertans and it is consistent with emerging government policy on greenhouse gas reduction," he says.
There is a need for more clarity on some of the other parts of the cost equation, adds Hornung. The MOF says forecasts should be supplied and paid for by wind power producers. But AESO has just launched a year long pilot study of a centralised system that would create a forecast based on data from the various project sites (Windpower Monthly, April 2007). "There is a little bit of confusion," says Hornung. "We think it should be a centralised forecasting system, that the costs of that system should be borne by the AESO, but that wind developers would have a responsibility to collect and provide data into that system."
The issue of what kind of power limiting capabilities wind farms will be required to have and when they will be applied is an area "where there is clearly a lot of work required," says Hornung. The industry wants a stakeholder working group established to look at questions like how often power limiting is likely to be necessary, he says. "We need to get an understanding of what this looks like. And that will help us get a better understanding of the cost and the financial implications. We'd also like to have that group work towards defining a clearer protocol for when power limiting would be applied."
One significant opportunity to reduce the cost of wind integration is the pursuit of geographic diversity in locating projects, says Hornung, but the MOF leaves that entirely in the hands of developers. "In a deregulated competitive market, such as in Alberta, investment decisions regarding the type and location of generation assets are driven by market forces," it says.
But Hornung believes a study looking at the benefits of locating projects in different wind regimes could be valuable to the provincial government, which is in the process of developing an energy strategy. "In our view, geographic diversity has the potential to reduce ancillary services costs, it can help transmission planning, it can reduce power management issues and we think it makes sense to look at policies that facilitate such diversity."