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Future System Cost Developments

Assessment of the way in which integration costs beyond the present ‘low to moderate’ penetration level will increase, depends on how the future evolution of the power system is viewed. A ‘static power system’ assumption becomes less plausible with increasing wind penetration, as wind serving a substantial (higher than 25 per cent) fraction of the demand will cause the system to evolve over time.  Furthermore, the generation mix is likely to change significantly during this long period of wind development. For example, it is predicted that gas power generation will increase dramatically (depending on fuel costs), which will make the power system more flexible. Hence, the integration costs of wind energy increase smoothly and proportionally as penetration levels increase.

Costs beyond penetration levels of about 25 per cent will depend on how the underlying system architecture changes over time, as the amount of installed wind gradually increases, together with other generating technologies. For example, in order to accommodate high amounts of wind power, a system with a generation mix dominated by fast-ramping gas turbines or hydro is much more flexible than a system dominated by nuclear or coal, as it can respond quickly to changes in supply and demand.

Up to a penetration level of 25 per cent, the integration costs have been analysed in detail and are consistently low. The economic impacts and integration issues are very much dependent on the power system in question. Important factors include the:

  • The structure of the generation mix and its flexibility;
  • The strength of the grid;
  • The demand pattern;
  • Power market mechanisms; and
  • Structural and organisational aspects.

Technically, methods that have been used by power engineers for decades can be applied for integrating wind power. But for large-scale integration (penetration levels typically higher than 25 per cent), new power system concepts may be necessary, and it would be sensible to start considering such concepts immediately. Practical experience with large-scale integration in a few regions demonstrates that this is not merely a theoretical discussion. The feasibility of large-scale penetration has already been proved in areas where wind power currently meets 20, 30 and even 40 per cent of consumption (Denmark and regions of Germany and Spain).

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