Introduction - Wind Power Integration: Connection and System Operational Aspects - page 14

A number of Emissions Trading Schemes around the world (in the European
Union, some American States and in Australia) short-circuit the need to establish
the exact level of carbon dioxide savings and their corresponding value achieved by
the introduction of wind energy.
Although there have been proposals for the carbon tax that would, at least
qualitatively, reflect the external costs of generation from fossil fuels, the European
Union's Emissions Trading Scheme aims to establish a market price for carbon
dioxide emissions that depends on the levels of the ceilings that are set on emis-
sions. By 2013, however, carbon dioxide was trading at very low prices (around
€ 2.5/tonne), imposing a penalty of around € 2/MWh on coal-fired generation and up
to around € 0.6-0.8/MWh on gas-fired generation. As part of its Electricity Market
Reform, the UK government has proposed setting a carbon floor price that will rise
from £20/tonne of carbon dioxide in 2015 to £30/tonne in 2030. In 2030, that will
add around £24/MWh to the price of coal-fired generation and £10/MWh to the
price of gas-fired generation.

1.7 Integration and variability - key issues

There is a widespread, but incorrect, perception that the introduction of wind
energy into an electricity network will cause problems - and financial penalties.
That perception was reinforced in the United Kingdom with the introduction of
the New Electricity Trading Arrangements (NETA, later BETTA), under which
variable sources of energy were accorded less value. BETTA muddied the waters,
as the contracts at the heart of the system are generally based on matching the
needs of electricity suppliers with the capabilities of generators. Supply and
demand are both disaggregated, to a degree. This puts variable renewables at a
disadvantage.
The technical criteria for absorbing renewables on the transmission network
operated by the National Grid Company have been restated and are set out in
Table 1.4 (National Grid Company, 1999). Of the three criteria, the third is prob-
ably the most severe as far as wind is concerned and is discussed in the next
section. It should be noted that the thresholds are not barriers and that higher levels
of wind generation can be absorbed - at a cost.

Table 1.4 Criteria for absorption of renewable energy

Impact Threshold Mitigation options

Change in renewable generation
output

Generation subject to fluctuation
> 20% of peak demand

Purchase additional
controllable output

Unpredictable instantaneous
reduction in generation output

Potential instantaneous loss
> 2% of peak demand

Purchase additional
frequency control
measures

Unpredictable short-notice
reduction in output

Potential loss > 3% of peak
demand in an hour

Purchase additional
reserve services