Trade as a variation management strategy for wind and solar power integration

Trading electricity between regions can support the integration of variable renewable energy (VRE) through: (i) exploitation of temporal differences in wind power generation between regions (geographic smoothing); and (ii) connection between regions that have unequal VRE resources (resource transfer). This work investigates the impacts of these two different trade features in relation to other strategies for facilitating the integration of VRE. The impacts of transmission capacity on investments and the dispatch of generation and variation management capacity are investigated while minimising the cost of meeting the demand for electricity. The results show that when the cost of connecting regions is high, transmission capacity mainly facilitates wind power integration by reducing variability through geographic smoothing, whereas if the cost of connecting regions is low, transmission capacity results mostly in resource transfer. Geographic smoothing increases the share of the load which can be cost-efficiently supplied by wind power, at the expense of thermal generation. However, the provision of flexibility through geographic smoothing is limited in terms of both time and power capacity by differences in weather patterns. It is found that the extensive transmission capacity put in place for resource transfer can benefit the integration of both wind and solar power