Three essays on the effect of wind generation on power system planning and operations

While the benefits of wind generation are well known, some drawbacks are still being understood as wind power is integrated into the power grid at increasing levels. The primary difference between wind generation and other forms of generation is the intermittent, and somewhat unpredictable, aspect of this resource. The somewhat uncontrollable aspect of wind generation makes it important to consider the relationship between this resource and load, and also how the operation of other non-wind generation resources may be affected. The three essays that comprise this dissertation focus on these and other important issues related to wind generation; leading to an improved understanding of how to better plan for and utilize this resource. The first essay addresses the cost of increased levels of installed wind capacity from both a capacity planning and economic dispatch perspective to arrive at the total system cost of installing a unit of wind capacity. This total includes not only the cost of the wind turbine and associated infrastructure, but also the cost impact an additional unit of wind capacity has on the optimal mix and operation of other generating units in the electricity supply portfolio. The results of the model showed that for all wind expansion scenarios, wind capacity is not cost-effective regardless of the level of the wind production tax credit and carbon prices that were considered. Larger levels of installed wind capacity result in reduced variable cost, but this reduction is not able to offset increases in capital cost, as a unit of installed wind capacity does not result in an equal reduction in other non-wind capacity needs. The second essay develops a methodology to better handle unexpected short term fluctuations in wind generation within the existing power system. The methodology developed in this essay leads to lower expected costs by anticipating and planning for fluctuations in wind generation by focusing on key constraints in the system. The modified methodology achieves expected costs for the UC-ED problem that are as low as the full stochastic model and markedly lower than the deterministic model. The final essay focuses on valuing energy storage located at a wind site through multiple revenue streams, where energy storage is valued from the perspective of a profit maximizing investor. Given the current state of battery storage technology, a battery capacity of zero is optimal in the setting considered in this essay. The results presented in this essay are dependent on a technological breakthrough that substantially reduces battery cost and conclude that allowing battery storage to simultaneously participate in multiple wholesale markets is optimal relative to participating in any one market alone. Also, co-locating battery storage and wind provides value by altering the optimal transmission line capacity to the battery and wind site. This dissertation considers problems of wind integration from an economic perspective and builds on existing work in this area. The economics of wind integration and utilization are important because wind generation levels are already significant and will likely become more so in the future. While this dissertation adds to the existing literature, additional work is needed in this area to ensure wind generation adds as much value to the overall system as possible