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Consumers and the Value of Wind Evidence from Ireland

Consumers and the Value of Wind Evidence from Ireland. Impact of Wind Generation on Wholesale Electricity Costs in 2011. Matthew Clancy Lead Policy Analyst EWEA , Vienna, 7 th February 2013. The Debate in Ireland in 2011. Two opposing views:

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Consumers and the Value of Wind Evidence from Ireland

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  1. Consumers and the Value of WindEvidence from Ireland Impact of Wind Generation on Wholesale Electricity Costs in 2011 Matthew Clancy Lead Policy Analyst EWEA , Vienna, 7th February 2013

  2. The Debate in Ireland in 2011 • Two opposing views: • “.. relatively expensive form of electricity generation ..” Irish Academy of Engineers, 2010 • “…[Wind energy] is already having a significant impact on energy costs, with the total savings to consumers set to reach €36.6m in 2011.” IWEA 2011 • Need for independent evidence to add to the debate • SEAI and the Irish TSO EirGrid, joint study

  3. Ireland as a case study • Ireland’s electricity market structure supports this analysis • Mandatory Gross Pool market • transparent market price, volumes and systems operations • Publically available data on generators • Allows detailed modelling of market • Large deployment of wind energy • 17% of electricity consumption in 2011

  4. What contributes to the Price of Electricity? Tax on the delivered electricity Renewable support schemes Transmission costs The ETS carbon price Wholesale costs

  5. How to isolate the impact of wind? Wholesale Price decrease Wind generation increase Short Term Constraint costs increase Supports for renewable increase

  6. How to isolate the impact of wind? • More wind, more wholesale price reductions • Extra investment in transmission will be required • More capital investment in thermal generation • Low running duty • Lower market prices Longer Term

  7. Focus on 2011 • Two scenarios examined • 1) 2011 thermal generation & 2011 total expected wind capacity • 2) 2011 thermal generation only & no wind generation

  8. Modelling Insights Renewable support €50 million higher in wind scenario Constraint costs €24 million higher in wind scenario Wholesale costs €74 million less in wind scenario

  9. Results • Wind generation reduces the wholesale market cost by €74 million in the model • The cost of constraints and renewable support offset this reduction • The modelling showed wind did not increase the cost in the scenarios examined

  10. Modelling 2020 impacts • Ireland aims to have 40% of electricity demand coming from renewable sources by 2020 • New transmission infrastructure and operational regimes required. • Investment in thermal generation required to maintain system security. • Preliminary results show that consumer bills could rise marginally • Cost to consumer in 2020 is highly dependent on fossil fuel prices

  11. Thanks for your attention matthew.clancy@seai.iehttp://www.seai.ie/Publications/Energy_Modelling_Group_/Energy_Modelling_Group_Publications/Impact_of_Wind_Generation_on_Wholesale_Electricity_Costs_in_2011.pdf

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