Thursday, February 24, 2011

Wind Swirling In Their Heads

Today, the Ontario government announced another round of winners in Ontario Power Authority’s FIT sweepstakes.  Next week the Independent Electricity System Operator (IESO) has meetings to develop the infrastructure to facilitate paying the FIT sweepstakes winners not to produce any output. 
The basis of the IESO’s planning is noted in their 'Integrating Renewable Resources - Design Principles' paper.
Principle 1 of the paper is understandable.  If wind and solar are to become increasingly large suppliers, it would be super nice to have centralized forecasting to know what supply can be provided.

Principle 2 is that the “real-time forecast will provide the information to allow for renewable dispatch and OPA contract settlement.”  The discussion regarding point two includes “allow for the settlement of additional contract payment clauses in OPA contracts”.  So putting principle 1 and 2 together, we need central forecasting to figure out how much supply a wind producer could provide, if we needed it, so that we can both utilize needed supply and pay the supplier as if they had produced supply when we have no need of it... this deals specifically with the OPA procuring unneeded supply, and the tools to pay suppliers not to produce.

Principle 3 is “The costs paid to the centralized forecast service providers will be treated as procured service charges and will be recovered from consumers through existing procurement market recovery mechanisms.”  Put another way, because the consumer benefits from paying suppliers not to produce power, the consumer should bear the full costs of all system required to pay for supply not needed.

Principle 9 is “Variable generators will be entitled to Congestion Management Settlement Credit (CMSC) payments.” 
Principle 10 appears to imply wind will be the first production shut off in surplus baseload generation periods (SBG) – which the IESO forecasts as occurring very frequently (1 in 7 hours from what I’ve read –it is charted on a 28 day basis and as we move out of winter’s high demand they problem quickly appears).

While it is wise to look into how to deal with the issue of too much supply that cannot be matched to demand, the first step of a meaningful approach would be to stop ordering more of the silly stuff until you’ve figured out what to do with it.   

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