Using the seasonal diversity between renewable energy sources to mitigate the effects of Wind generation uncertainties

The wind generators in the Brazilian electricity market have made their projects feasible through PPA´s from regulated market where the average prices are lower, however the risks are taken by the consumers. This behavior is associated with the highest risk from uncertainty in the wind generation, which is naturally intermittent, becoming difficult to reach the contractual obligations. This paper illustrates the potential benefit in the introduction of an energy reallocation mechanism (ERM), similar to that existent in Brazil for hydro generators. This encourages wind farm owners to increase their trading activities to reach a more efficient market position and to improve the liquidity in the free electricity market. The investigation is made through simulations which calculate the maximum profitability of wind farms with and without such mechanism.