A cooperative game-based mechanism for allocating ancillary service costs associated with wind power integration in China
Introduction
China emits more carbon dioxide (CO2) emissions than any other country, accounting for more than 20% of global annual emissions (Energy Information Agency: www.eia.gov). The electric power industry accounts for the majority of China's emissions, generating approximately 40% of total CO2 emissions (Yu et al. 2010, 2011). Reducing electric power industry CO2 emissions is critical for China to achieve its 2030 CO2 emissions-reduction target. Greater reliance on structural adjustment and an increasing proportion of renewable energy power generation in China's power sector are needed.
Wind power is becoming an increasingly important source of renewable energy in China. By 2015, the installed capacity of wind reached 129 gigawatts (GW), increasing more than one hundredfold from 2005 and comprising 8.6% of all installed capacity of power generation. Wind generation reached 186.3 terawatt-hours (TWh), comprising 3.3% of all generated electricity (China Electric Power Enterprise Joint Association 2016). The National Energy Administration has estimated that by 2020, the installed capacity of wind power generation will reach to more than 210 GW, and more than 420 TWh will be generated, comprising approximately 6% of all generated electricity in China. In other words, there will be substantial growth (National Energy Administration, 2016b).
However, because wind power generation is variable, it imposes considerable challenges to power system operations, including the need for curtailment, that is, the reduction of output of wind power below what it could have otherwise produced. The National Energy Administration statistics show that in 2015, wind power curtailment led to an electricity loss of 33.9 TWh. The national average wind-power curtailment rate was 15%, an increase of 7% from the previous year. Curtailment in some northern provinces is much higher than the national average, ranging from 18% in Inner Mongolia to 39% in Gansu (National Energy Administration (2016a)). If this situation is not improved, wind power curtailment may become an obstacle to the continued growth of China's wind power industry. Improving the ability of the Chinese power system to economically balance wind power, referred to in this paper as "ancillary service capability," is of great importance to integrating wind power generation on the grid, reducing CO2 emissions, and achieving China's greenhouse gas emissions reduction target by 2030 or earlier.
Increasing the power system's ancillary service capability may require substantial investment or reallocation of costs among generators. Additionally, as large-scale wind power integration into the grid increases, the cost of ancillary services associated with wind power also will likely increase. It is important to examine how the cost allocation and compensation mechanisms for ancillary services associated with rising levels of wind generation can be improved in China, leading to more economic levels of wind curtailment.
Section snippets
Literature review
Power system ancillary service refers to services provided by the power generation enterprise, the power grid management enterprise, and electric power consumers that are considered apart from the functions necessary for normal electric energy production, transmission, and consumption, and that maintain the power system's safe and stable operation and ensure electricity quality. These include primary frequency regulation, automatic generation control (AGC), load following, reactive regulation,
Overview of ancillary service mechanism of Jingjintang (JJT) power grid in China
Built in 1942, the JJT power grid is the oldest power grid in North China. It covers Beijing, Tianjin, and the North Hebei region (including Tangshan, Qinhuangdao, Langfang, Zhangjiakou, and Chengde). The region's total area is 132 million square kilometers, or 1.41% of China's land area and its population is approximately 60 million, or 4.44% of China's population. Its 2014 gross domestic product (GDP) was 4.9 trillion Yuan or 7.73% of China's GDP. The region's total power consumption in 2014
The Shapley value model for ancillary service cost allocation for wind power
To determine how to allocate wind power integration-induced ancillary service costs among wind power plants, the ancillary service costs of integrating all wind power plants into the grid should be determined first. Next, the ancillary service costs of integrating individual wind power plants into the grid should be determined. Because the ancillary service costs of integrating all wind power plants into the grid are less than the sum of the costs of integrating individual wind power plants
Allocation results for China's wind power ancillary service costs
In 2014, the consumption in the JJT power grid was 358 TWh and the peak load was 57 GW. In the future, with the continuous optimization of economic structures in the JJT region, the peak load growth rate will continue to overtake the power consumption growth rate. Additionally, since the proportion of the power system related to renewable energy is increasing continuously, the power system's ancillary service costs will grow. Fig. 2 shows the variation of the installed capacity of wind power in
Conclusions and policy recommendations
In China, the power grid's ancillary services costs are paid mainly by the thermal plants, which is considered unfair and inefficient, the National Energy Administration is trying to introduce policies that require the wind plants and other renewable energy resources to share the costs. The cost allocation for wind power ancillary services is based on the penetration rate of wind power. However, this cost allocation method neglects the contribution of wind power to meeting peak load.
In this
Acknowledgements
This paper is sponsored by Humanities and Social Science Foundation from Ministry of Education (13YJC790046), Beijing Social Science Foundation (16JDGLB023), National Natural Science Foundation of China (71671033) and China Scholarship Council.
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