Manitoba Hydro wind power reserve requirements

There is a strong public and political desire to incorporate wind power in most grids including that of Manitoba hydro. This paper describes Manitoba hydro´s plans to incorporate wind power over the next 20 years and the associated wind integration costs. Since Manitoba hydro currently has excess hydro power that supplies a domestic load of approximately 20 TWh/year and 10 TWh/year of export power sales, any new power source (hydro, wind, etc.) added between now and 2020-2024 must be sold on the export power market. It is for this reason that Manitoba hydro must pay ldquogreatrdquo attention to the costs associated with purchasing and integrating locally produced wind power before reselling it on the export market. Manitoba hydro desires to pass on the maximum value to wind developers less its direct cost such as the shaping and firming costs and wind integration costs. The Manitoba hydro wind integration costs are considered specific to Manitoba hydro, since the ability to provide reserves and the Manitoba hydro response to hydraulic inefficiencies is unique to Manitoba Hydro. The wind integration impacts and related costs were studied over low, medium, and high water supply conditions. Additional reserves are required because of wind volatility and wind generation forecast error. Reductions in wind generation are of the most concern because other generation must be increased to counter balance the shortfall in wind generation. Manitoba hydro is in a unique position that it can with its hydro system enhance the value of intermittent wind power by shaping and firming it into a firm product that is desirable by our export customers. The shaping and firming costs (called long-term product enhancement cost) are an important additional component of the value of wind generation in determining the cost of producing firm blocks of energy, and are distinct and separate from wind integration costs. Our goal is to establish what price Manitoba hydro can afford to pay for var- ious levels of independent power producer wind power added to the Manitoba hydro system. The wind integration cost will be discussed in detail in this paper. Under-representing this cost will have an adverse effect on Manitoba hydro rate payers and overestimating this cost will have an adverse effect on Manitoba hydro wind developers. The methodology used to determine the wind integration cost is explained, along with the process used to calculate the value of wind generation to Manitoba hydro. In general, it is seen that Manitoba hydro´s wind integration costs increase modestly as more wind is added, just like many other wind integration studies where the results have been published, and the values themselves seem reasonable in comparison. This cost includes the costs of the additional reserves (lost opportunity cost), and the costs of inefficiencies in hydraulic operation (increased spill due to wind generation).