IEEE Power & Energy Magazine - January/February 2021 - 57

✔✔ Scenario E: Wind generators are allowed to partici-

pate in balancing markets, in line with the current
market arrangements in certain European countries (e.g., Spain, Germany, Denmark, and the
United Kingdom).
✔ ✔ Scenario F: Beyond the existing markets, wind
generators participate in two new balancing markets-the renewable power band market and the energy reserve market-that have been proposed by
the IRPWIND program. These markets are similar
to the secondary and tertiary reserve markets, respectively, with the difference that their temporal
resolution is 15 min (instead of 1 h), and the wind
generators can submit bids up to 15 min ahead of
real time to enable them to reduce their imbalance payments.
✔✔ Scenario G: This scenario is a combination of scenarios B and F, with wind generators participating in
the two new markets and employing a probabilistic
forecast approach.
✔✔ Scenario H: This scenario is a combination of scenarios C and F, with wind generators being aggregated
and participating in the two new markets.
✔✔ Scenario I: Beyond participating in the two new markets and employing a probabilistic forecast approach,
wind generators can participate in the formation of a
new type of bilateral contracts, short-term energy contracts. Following the logic of the new markets, these
short-term energy contracts are formed in a 15-min
temporal resolution and enable wind generators to
trade their energy imbalances.

Prioritization of Renewable
Generation in MeritOrder Dispatch
Another important market design
issue around renewable generation lies in its prioritization in
the merit-order dispatch, with
most European markets accepting its curtailment only when the
technical limits of the system are
breached, on the grounds that such
curtailment always increases the
operating costs and the CO2 emissions of the system. However, this
assumption is not always valid,
as demonstrated by the following
example. This example involves a
wind generator (which is assumed
to be able to produce 100 MWh
across the considered 4-h operating horizon), a biomass unit, and
a conventional natural gas unit
(Table 1), which need to supply a
january/february 2021	

total demand of 160 MW at hours t = 1 and t = 2 and 380 MW
at hours t = 3 and t = 4.
When the wind generator is prioritized in the dispatch and
is forced to deliver its maximum possible output at all hours,
the resulting optimal generation dispatch, system o- perating
costs, and system CO2 emissions are as presented in Table 2.
Although the biomass generator constitutes the cheapest
available conventional unit and has the capacity to cover
the remaining demand at all hours, its maximum ramp rate
limit does not allow it to cover the demand at t = 3 (since
demand increases from 160 MW at t = 2 to 380 MW at t = 3,
while the maximum ramp rate of the biomass generator is
120 MW/h). Therefore, the more expensive and polluting gas
generator needs to be activated at t = 3 to cover the remaining 100 MW of the demand.
On the other hand, when the dispatch prioritization of
the wind generator is relaxed, the resulting optimal generation
dispatch, system operating costs, and system CO2 emissions are
as presented in Table 3. Although the wind generation exhibits
lower operating costs and zero CO2 emissions, its whole output
is curtailed at t = 2, enabling the biomass generator to reach a
higher output at this hour; the wind generator, along with the
table 1. Generators' data.
Maximum
Marginal CO2
Maximum Ramp
Marginal Emissions
Power
(MetricRate
Cost
(MW)
(MW/h)
(€/MWh) Tons/MWh)
Wind

100

-

0

0

Biomass 300

120

31

0

Gas

100

70

0.32

150

table 2. The results with wind dispatch prioritization.
Power
t=1
(MW)

Power
t=2
(MW)

Power
t=3
(MW)

Power
t=4
(MW)

Total
Output
(MWh)

Total CO2
Operating Emissions
Cost (€)
(Metric-Tons)

Wind

100

100

100

100

400

0

0

Biomass

60

60

180

280

580

17,980

0

Gas

0

0

100

0

100

7,000

32

System

160

160

380

380

1,080

24,980

32

table 3. The results without wind dispatch prioritization.
Power
t=1
(MW)

Power
t=2
(MW)

Power
t=3
(MW)

Power
t=4
(MW)

Total
Output
(MWh)

Total CO2
Operating Emissions
Cost (€)
(Metric-Tons)

Wind

100

0

100

100

300

0

0

Biomass

60

160

280

280

780

24,180

0

Gas

0

0

0

0

0

0

0

System

160

160

380

380

1,080

24,180

0

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