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Assessment of imbalance settlement exemptions for offshore wind power generation in Belgium

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  • De Vos, Kristof
  • Driesen, Johan
  • Belmans, Ronnie
Abstract
This article deals with a specific support mechanism exempting offshore wind power generators partially from their balancing responsibilities by means of a tolerance margin. This specific support mechanism was enforced in Belgium as from 2009 and is defended by its proponents in view of the lower power output predictability at offshore locations. Although policies accommodating offshore developments may be seen as important to tap better wind resources, this contribution stresses the importance of full balancing responsibility for variable renewables. After a detailed evaluation of the support mechanism and its impact on the balancing costs for wind power generators, the use of current applied production support mechanisms is recommended. These can be used to acquire the same financial effect without increasing market complexity and harming the operation of the balancing market. The first part of the study deals with the specific implementation of the tolerance margin in the Belgian context. Secondly, its underlying motivation is quantitatively assessed, namely the relatively higher offshore prediction errors. Finally, the total offshore subsidy resulting from the measure is determined. Expressed in [euro]/MWh, this subsidy is currently determined at [euro]1.4-1.7/MWh, which represents the required increase of production support in order to replace the regulation.

Suggested Citation

  • De Vos, Kristof & Driesen, Johan & Belmans, Ronnie, 2011. "Assessment of imbalance settlement exemptions for offshore wind power generation in Belgium," Energy Policy, Elsevier, vol. 39(3), pages 1486-1494, March.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:3:p:1486-1494
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    References listed on IDEAS

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    1. Klessmann, Corinna & Nabe, Christian & Burges, Karsten, 2008. "Pros and cons of exposing renewables to electricity market risks--A comparison of the market integration approaches in Germany, Spain, and the UK," Energy Policy, Elsevier, vol. 36(10), pages 3646-3661, October.
    2. Angarita-Marquez, Jorge L. & Hernandez-Aramburo, Carlos A. & Usaola-Garcia, Julio, 2007. "Analysis of a wind farm's revenue in the British and Spanish markets," Energy Policy, Elsevier, vol. 35(10), pages 5051-5059, October.
    3. Weber, Christoph, 2010. "Adequate intraday market design to enable the integration of wind energy into the European power systems," Energy Policy, Elsevier, vol. 38(7), pages 3155-3163, July.
    4. Vandezande, Leen & Meeus, Leonardo & Belmans, Ronnie & Saguan, Marcelo & Glachant, Jean-Michel, 2010. "Well-functioning balancing markets: A prerequisite for wind power integration," Energy Policy, Elsevier, vol. 38(7), pages 3146-3154, July.
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    Cited by:

    1. Van den Bergh, Kenneth & Bruninx, Kenneth & Delarue, Erik, 2018. "Cross-border reserve markets: network constraints in cross-border reserve procurement," Energy Policy, Elsevier, vol. 113(C), pages 193-205.
    2. Keyaerts, Nico & Delarue, Erik & Rombauts, Yannick & D’haeseleer, William, 2014. "Impact of unpredictable renewables on gas-balancing design in Europe," Applied Energy, Elsevier, vol. 119(C), pages 266-277.
    3. Wu, Zhaoyuan & Zhou, Ming & Zhang, Ting & Li, Gengyin & Zhang, Yan & Liu, Xiaojuan, 2020. "Imbalance settlement evaluation for China's balancing market design via an agent-based model with a multiple criteria decision analysis method," Energy Policy, Elsevier, vol. 139(C).
    4. Batas Bjelić, Ilija & Rajaković, Nikola & Ćosić, Boris & Duić, Neven, 2013. "Increasing wind power penetration into the existing Serbian energy system," Energy, Elsevier, vol. 57(C), pages 30-37.
    5. Wu, Zhaoyuan & Zhou, Ming & Li, Gengyin & Zhao, Tong & Zhang, Yan & Liu, Xiaojuan, 2020. "Interaction between balancing market design and market behaviour of wind power producers in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    6. Kenneth Bruninx & Erik Delarue & William D'haeseleer, 2013. "Statistical description of the error on wind power forecasts via a Lévy α-stable distribution," RSCAS Working Papers 2013/50, European University Institute.
    7. Estelle Cantillon, 2014. "What support mechanism is needed for flexible capacity in Belgium?," ULB Institutional Repository 2013/172669, ULB -- Universite Libre de Bruxelles.
    8. Hu, Jing & Harmsen, Robert & Crijns-Graus, Wina & Worrell, Ernst & van den Broek, Machteld, 2018. "Identifying barriers to large-scale integration of variable renewable electricity into the electricity market: A literature review of market design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2181-2195.
    9. Heeseung Moon & Dongsu Lee & Jeongmin Han & Yongtae Yoon & Seungwan Kim, 2021. "Impact of Imbalance Pricing on Variable Renewable Energies with Different Prediction Accuracies: A Korean Case," Energies, MDPI, vol. 14(13), pages 1-19, July.
    10. Chaves-Ávila, J.P. & Hakvoort, R.A. & Ramos, A., 2014. "The impact of European balancing rules on wind power economics and on short-term bidding strategies," Energy Policy, Elsevier, vol. 68(C), pages 383-393.

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