Economic analysis of the wind power integration in an a-FRR control area

This Master’s Thesis is devoted to carry out an analysis of the economic consequences from the wind power integration within an specific aFRR control area (“Zona de Regulación”). This integration should be understood as a facilitator for the internal balancing of the wind power deviations. By means of this measurement, the AGC (Automatic Generation Control) will receive an additional setpoint from the wind power imbalances and it will adjust the output of the other technologies included in the aFRR control area in order to net its overall imbalance, without affecting the secondary reserves provisions. The main assets considered in this work as the flexible units able to compensate the wind power imbalances have been the hydro units. Due to this fact, one of the main issues that is addressed along the thesis lies in the water resources valuation. Basically, the analysis focuses on carrying out a comparison between the scenario where the wind power integration is implemented and the opposite one, in which wind power units settle their own imbalances in an individual way. Depending on different conditions, there will be hours in which the first scenario would be the optimal one and others in which it happens the contrary situation. Therefore, a decision making problem is also part of the scope of this work. According to this, the economic analysis is developed through the implementation of an ex-post optimization model, which is embedded within an Excel tool. This tool incorporates all the required data queries to collect the needed information for the economic assessment such as market prices, imbalances prices, power units’ schedules and final outputs, etc. The main conclusions from the analysis are aimed to lay a set of strategic criteria in order to improve the decision making of the incumbent company’s generation control center, which is the responsible for the real time imbalances internal regulation.