The Economic Value of Wind Energy Nowcasting

Aurore Dupré, Philippe Drobinski, Jordi Badosa, Christian Briard and Peter Tankov
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Aurore Dupré: LMD/IPSL, École Polytechnique, Institut Polytechnique de Paris, ENS, PSL, Research University, Sorbonne Université, CNRS, 91120 Palaiseau, France
Philippe Drobinski: LMD/IPSL, École Polytechnique, Institut Polytechnique de Paris, ENS, PSL, Research University, Sorbonne Université, CNRS, 91120 Palaiseau, France
Jordi Badosa: LMD/IPSL, École Polytechnique, Institut Polytechnique de Paris, ENS, PSL, Research University, Sorbonne Université, CNRS, 91120 Palaiseau, France
Christian Briard: Zephyr ENR, 37550 Saint-Avertin, France
Peter Tankov: CREST, ENSAE, Institut polytechnique de Paris, 91120 Palaiseau, France

Energies, 2020, vol. 13, issue 20, 1-20

Abstract: In recent years, environmental concerns resulted in an increase in the use of renewable resources such as wind energy. However, high penetration of the wind power is a challenge due to the intermittency of this resource. In this context, the wind energy forecasting has become a major issue. In particular, for the end users of wind energy forecasts, a critical but often neglected issue is the economic value of the forecast. In this work, we investigate the economic value of forecasting from 30 min to 3 h ahead, also known as nowcasting. Nowcasting is mainly used to inform trading decisions in the intraday market. Two sources of uncertainty affecting wind farm revenues are investigated, namely forecasting errors and price variations. The impact of these uncertainties is assessed for six wind farms and several balancing strategies using market data. Results are compared with the baseline case of no nowcasting and with the idealized case of perfect nowcast. The three settings show significant differences while the impact of the choice of a specific balancing strategy appears minor.

Keywords: wind energy forecasting; nowcasting; electricity market; balancing strategies (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 (3)

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