Economic Analysis of Operating Reserve Using Forecasted Variable Renewable Generation

Abstract

The installed capacity of variable renewable generation (VRG) has been rapidly increasing in Japan. Consequently, there is concerned shortage of operating reserve, which compensates demand and supply imbalance. In this study, we analyze the economy of operating reserve by supply-demand simulation in Tohoku area. First, we use historical weather data to calculate forecast and actual output of VRG, and analyze characteristics of prediction errors. Second, we calculate operating cost (fuel cost and start up cost and sodium-sulfur battery cost and Lithium-ion battery cost) by using of unit commitment and economic load dispatch. Finally, operating reserve cost is derived by operating cost, and analyze economic characteristics. As a result, it became clear that operating reserve cost is 1. having different cost for each month 2. depends on fleet of thermal generation on grid and 3. amount of VRG prediction error and characteristic of overprediction/underprediction.