Hanni Sonkeri, Planner at Fingrid, has studied the participation of wind power in Finland’s balancing electricity market. She has recently completed her Master’s thesis, which found that wind power plants have the technical capability to participate in the power system balancing, but whether it is cost-effective for them to do so is still for some part uncertain.
“For this reason, wind power still accounts only a small share of the balancing electricity market, and not many parties are involved,” Hanni Sonkeri says.
The down-regulation market stirs interest
Based on Fingrid’s data, only about 2.3 per cent of Finland’s total wind power capacity was involved in the down-regulation market in 2019, and the down-regulation market is currently considered more favourable for wind power than the up-regulation market.
“At present, wind power actors consider down-regulation more practical as it makes more sense in terms of risks and cost-effectiveness,” Sonkeri says.
“The barriers for wind power to enter the balancing electricity market should be as low as possible, as with every type of electricity generation,” she adds.
Hanni Sonkeri approached the topic by interviewing dozens of Finnish wind power actors. According to them, the wind power participation in the balancing electricity market and other electricity markets will increase in the future.
“The interviewees found the subject interesting and relevant. However, there are some challenges associated with the participation, and these must be overcome before larger share of wind power would be able to participate in the market,” Hanni Sonkeri says.
No major technical barriers
What is holding the wind power actors back? – The Master’s thesis states that among others the current subsidies for wind power generation, the operating methods of wind power plants and contractual arrangements between the parties affect participation possibilities of wind power in the balancing electricity market.
“The main challenges preventing wind power from entering the balancing electricity market are mostly related to the activities of the wind power actors and their general knowledge of the participation possibilities,” says Sonkeri. She adds that the way the balancing market currently works does not create any major barriers for the wind power participation.
“In addition, wind power is operated in a fairly distributed way, which makes the operation more challenging and highlights the need of interfaces and good connections between them. However, the actors have become more aware of this problem.”
Change is around the corner
Despite the challenges prevailing in the present state, wind power actors are willing to seek change if it can be reasonably made.
“The interviews revealed a desire among the wind power actors for additional information about the opportunity for wind power to participate in the balancing electricity market, as well as in other electricity marketplaces,” Hanni Sonkeri says.
She thinks that Fingrid should improve communication targeted towards the wind power actors on a practical level in a form such as webinars or workshops.
“The improved information exchange between the wind power actors and Fingrid would also be beneficial for the operators in the Main Grid Control Centre,” she states. She adds that also increased amount of real-time published market data for the market participants would improve the opportunities for wind power actors to participate.
“Furthermore, the development of the balancing capacity market in the down-regulation side is one possible measure that could be considered in order to ensure that the power system has sufficient balancing capacity.”
Automation provides a boost
Hanni Sonkeri points out that eventually, the price levels in the balancing market and in other electricity markets will determine the profitability of wind power participation in the balancing market – and she is optimistic about that development. In addition to parties sharing their information and experiences about the wind power participation in the balancing electricity market, automation of processes is constantly levelling the playing field.
“The fact that it is already profitable for market-based wind power to participate in the balancing electricity market is a big deal.”