Economic implications of non-utility-generated wind energy on power utility

Wind is considered to be an excellent source of renewable energy. The viability of a wind energy project depends on its ability to generate energy at a low operating cost. In more and more non-utility generators (NUGs), therefore, wind is chosen as a source of energy. The economic impact of NUG wind energy on a short-term planning of a thermal power utility is examined in this paper. An algorithm is presented to evaluate the price that the utility will pay to the NUG in exchange for the energy it receives from the NUG. Basic inherent characteristics of wind power are recognized in the algorithm. The IEEE-RTS is utilized as a test system to illustrate the applications of the algorithm. A range of comparative studies is described which shows the effect of different wind variables on the utility price. (C) 2002 Elsevier Science Ltd. All rights reserved.