Jun 07, 2019 |
Read time: 2 mins
A match for increasing price intermittency as wind penetration increases.
With the announcement of the latest addition to the EnVentus modular platform, the V138-3.0 MW, Vestas is offering more then just new technology. Initially targeted to be a good fit with the physical constraints of the American market, the high rotor to generator ratio also appears profitable for challenging merchant conditions in regions moving towards high wind penetration. Here ERCOT in Texas provides an excellent reference point.
The last years have seen an increase in the price intermittency in Texas. Price intermittency reflects the effect major build-out of renewable powers, such as solar PV and wind, have on pricing mechanisms in a liberal electricity market. In simple terms, if the wind is blowing at a high speed, wind turbine generators also have high production, and thereby reduce power prices. This effect is only notable when a substantial build-out of intermittent generation capacity, e.g. wind, has happened. The figure below illustrates this point with depicting the relationship between the wind speed at hub-height for 2018 in Texas, US (High renewable penetration) and Queensland, Australia (Low renewable penetration).
Price intermittency thereby reflects that the power prices, which your wind farm obtains for the electricity produced, would be lower than the average price for electricity in the market. Such intermittency has been increasing for the last three years in ERCOT, as illustrated in the figure below. While ERCOT generally reflects high levels of intermittency, it is evident with the spike in 2018 that it is becoming even more relevant to consider the impact on merchant conditions, to ensure that unfavorable pricing dynamics don’t ruin the expected return of your investment in renewables.
Wind speed scaled to hub height, based on power curve of Vestas 3.45, V126 with wind speed dependent wake and operational losses applied.
Intermittency is defined as the percentage difference between the average electricity price in the market and the actual achieved one weighted by the production of the wind farm.
Analysis is based on an estimated power curve for V138, 3.0.
The new EnVentus 3.0MW – 136 appear promising for mitigating the impact of pricing intermittency with the higher rotor diameter relative to capacity. To test this, we analyzed pricing and wind data going back close to 10 years, and simulated production outcomes for various turbine configurations currently competing in the American market.
Our analysis reveals a potential upside of up to 2.6% on the effective realized merchant price for the latest member of the EnVentus platform. This is very much a welcomed relief for developers working in markets reaching higher penetration of intermittent generation capacity.