Status of Wind Power in Electricity Markets

The Utility Variable-Generation Integration Group (UVIG) has released an updated version of a summary table detailing markets and market rules for wind energy and capacity in North America. Capturing the state of markets as of October 2011, the document represents a significant updating of a table submitted by UVIG at the December 2004 FERC Technical Conference on Assessing the State of Wind Energy in Wholesale Electricity Markets that was subsequently updated in 2007 and addressed in a table summarizing forecasting programs in use by regional transmission organizations and utilities issued in 2009.

Some of the major findings are that every ISO/TSO and utility in North America that is integrating a large amount of wind power is using wind farm output forecasts to improve the reliable and economic operation of their system; wind farm plants are increasingly being allowed to bid in the day-ahead market, and if the marginal unit, to set price; and wind turbines generation is increasingly being factored into the economic dispatch process.

The document was compiled by Jennifer Rogers and Kevin Porter of Exeter Associates with UWIG participation and NREL support, based on a survey covering PJM Interconnection, the New York Independent System Operator, ISO New England, the Ontario Independent System Operator, Midwest ISO, Southwest Power Pool, the Electric Reliability Council of Texas, California Independent System Operator, and Alberta Electric System Operator. The table presents responses to a number of questions, with the more important ones noted below:

Scheduling in Energy Markets: How is wind energy scheduled and procured?
Dispatch Frequency: At what interval is generation dispatched?
Imbalance Settlement: How are wind energy imbalances settled – either through a balancing market or another settlement procedure?
Impact of Wind on Ancillary Services Requirements: Has wind prompted the utility or RTO to change the amount, the type and the timing of procuring ancillary services?
Type of Wind Forecasting System: Does wind forecasting play a role, and if so, what type of wind forecasting system is in place?
Description of Wind Forecasts: What type of wind forecasts are prepared and at what time frame?
Wind Forecast Cost Allocation: Who pays for the wind forecasts?
Wind Forecast Utilization: How are the wind forecasts used?
Determination of Capacity Value for Wind: How is capacity value or capacity credit for wind plants calculated? Is there a distinction between capacity values for planning reserves (months and years time frame) and operating reserves (same-day to next-day)? If so, what is it?
Incorporation of Wind into System Dispatch/AGC: Is wind generation incorporated into system dispatch, and if so, under what conditions?

Formerly known as the Utility Wind Integration Group, the Utility Variable-Generation Integration Group (UVIG) was established in 1989 to provide a forum for the critical analysis of wind technology for utility applications and to serve as a source of credible information on the status of wind technology and deployment.

The group’s current mission is to accelerate the development and application of good engineering and operational practices supporting the appropriate integration of wind energy and solar power for utility applications through the coordinated efforts and actions of its members, in collaboration with the U.S. Department of Energy, its National Renewable Energy Laboratory and utility research organizations. UVIG is an international organization with over 170 members from the United States, Canada, Europe, and Asia, including investor-owned, public power, and rural electric cooperative utilities; transmission system operators; and associate member corporate, government, and academic organizations.

The document can be downloaded from the UVIG web site at