The Value of PV Power Forecast and the Paradox of the “Single Pricing” Scheme: The Italian Case Study

Marco Pierro, David Moser, Richard Perez and Cristina Cornaro
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Marco Pierro: Department of Enterprise Engineering, University of Rome Tor Vergata, 00133 Rome, Italy
David Moser: EURAC Research, Institute for Renewable Energy, Viale Druso, 1, 39100 Bolzano, Italy
Richard Perez: Atmospheric Sciences Research Center, State University of New York, Albany, NY 12203, USA
Cristina Cornaro: Department of Enterprise Engineering, University of Rome Tor Vergata, 00133 Rome, Italy

Energies, 2020, vol. 13, issue 15, 1-27

Abstract: One of the major problem of photovoltaic grid integration is limiting the solar-induced imbalances since these can undermine the security and stability of the electrical system. Improving the forecast accuracy of photovoltaic generation is becoming essential to allow a massive solar penetration. In particular, improving the forecast accuracy of large solar farms’ generation is important both for the producers/traders to minimize the imbalance costs and for the transmission system operators to ensure stability. In this article, we provide a benchmark for the day-ahead forecast accuracy of utility scale photovoltaic (PV) plants in 1325 locations spanning the country of Italy. We then use these benchmarked forecasts and real energy prices to compute the economic value of the forecast accuracy and accuracy improvement in the context of the Italian energy market’s regulatory framework. Through this study, we further point out several important criticisms of the Italian “single pricing” system that brings paradoxical and counterproductive effects regarding the need to reduce the imbalance volumes. Finally, we propose a new market-pricing rule and innovative actions to overcome the undesired effects of the current dispatching regulations.

Keywords: photovoltaic power forecast; energy markets; solar imbalance (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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