integration of wind power into the british system in 2020

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Energy 36 (2011) 5975e5983

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Integration of wind power into the British system in 2020

Ngoc Anh Le, Subhes C. Bhattacharyya*

CEPMLP, University of Dundee, Dundee DD1 4HN, United Kingdom

a r t i c l e i n f o

Article history:Received 9 March 2011Received in revised form11 August 2011Accepted 12 August 2011Available online 10 September 2011

Keywords:Wind powerEnergyPLANBritish systemCost minimisation

* Corresponding author. Tel.: þ44 1382 388876; faxE-mail addresses: [email protected] (N.A. Le), s

com, [email protected] (S.C. Bhattachar1 There is a minimum (cut-in) and a maximum (

turbine. Power is generated when the speed lies withigenerally lies between 7 and 10 miles per hour (mph)range between 45 and 80 mph.

0360-5442/$ e see front matter � 2011 Elsevier Ltd.doi:10.1016/j.energy.2011.08.018

a b s t r a c t

This paper investigates the integration of renewable electricity into the UK system in 2020. The purposeis to find the optimal wind generation that can be integrated based on total cost of supply. UsingEnergyPLAN model and the Department of Energy and Climate Change (DECC) energy projections asinputs, this paper simulates the total cost of electricity supply with various levels of wind generationconsidering two systems: a reference and an alternative system. The results show that 80 TWh of windelectricity is most preferable in both systems, saving up to 0.9% of total cost when compared toa conventional system without wind electricity production. The alternative system, with decentralizedgeneration and active demand management, brings relatively more cost saving, and higher wind uti-lisation, compared to the reference case. The sensitivity analysis with alternative fuel and capital costsagain confirms the superiority of the alternative over the reference system.

� 2011 Elsevier Ltd. All rights reserved.

1. Introduction

Electricity from wind while clean and sustainable is variable innature. The ability to generate power depends on the availability ofwind at an acceptable speed.1 However, wind speed is difficult toforecast accurately, which in turn raises concerns about large-scaleintegration of wind electricity into the power system due to tech-nical and economic challenges [1]. Technically, the availability ofwind power will be lower than expected during low wind speedconditions, which in turn will cause supply imbalance (and cancause power shortages), thereby requiring a greater reliance onback-up capacity. On the other hand, high wind speed can lead tonetwork bottlenecks and low capacity utilisation for conventionalpower plants. These technical problems are directly linked tocommercial issues, as they affect the system operating costs. Giventhis trade-off between conventional power and wind power interms of costs and environmental considerations, a careful analysisis required to determine how much wind generation can be inte-grated at the lowest social cost, or at an acceptable electricity priceto the consumers.

: þ44 1382 [email protected]).cut-out) speed for any windn this range. The cut-in speedwhile the cut-out speed can

All rights reserved.

The UK government has put renewable energies as a top priorityin its energy policy. According to the UK Renewable Energy Strategy[2], wind will be the major source for renewable electricity in 2050.While the issues related to wind power integration have beenstudied extensively for the UK, such as in Refs. [3e8] using a varietyof cost-benefit approaches to analyse the benefits to the electricitysector or to thewhole energy system; there is no general consensusfrom these studies. For example, Boyle [7] suggested that 95% ofelectricity needs can be supplied from wind power based ona technical acceptability analysis, while another study [8] indicatedthat 40% of wind integration is desirable. This study appliesa modelling framework, EnergyPLAN that has beenwidely used forother countries in Europe (as can be seen from Refs. [9,10]), except,to the best of our knowledge, the UK. The EnergyPLAN model hasalso been used for the case of Denmark [11e13,20] and focused onthe interaction between three sectors: heat, electricity and trans-port, with a special emphasis on the district heating subsector.Other applications of the model include Ref. [21].

This paper examines the integration of wind power into theBritish system in 2020. Specifically, the optimal wind capacity forthe UK will be identified based on total social cost. Two scenariosfor the UK energy systems will be considered:

- Reference system: 2020 UK energy system with conventionaltransmission and distribution.

- Alternative system: where a modified energy system isconsidered in 2020 with more distributed generation andadvanced transmission and distribution.

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N.A. Le, S.C. Bhattacharyya / Energy 36 (2011) 5975e59835976

The paper is organized as follows: Section 2 presents themethodology, data used and the details of the alternative scenarios.Section 3 presents the technical results while Section 4 contains theeconomic results. Some concluding remarks are presented in thelast section.

2. Methodology

As indicated earlier, this paper uses the EnergyPLAN model toanalyse the issue of wind power integration into the British systemquantitatively. This section outlines the analytical approach, inputdata used in themodel and the simulation strategyused in the study.

2.1. EnergyPLAN model

EnergyPLAN is an integrated-energy-system model developedby the Sustainable Energy Planning Research Group at AalborgUniversity, Denmark.2 It is designed to analyse the national orregional energy system planning strategies considering the technicaland economic aspects of energy system planning and investmentdecisions. It can capture renewable energy production in detail andpays greater attention to heat and electricity demand and supply, aswell as consumption of energy in the industrial and the transportsectors.

The model requires input data for demand and production ofheat and electricity, cost data, capacity data for the energy plants,and renewable energy generation information. Users can choosehow to regulate and optimise the energy system. Regulationstrategies determine how the electricity grid is stabilised viaconventional plants’ production share; or how excess electricity isreduced and avoided. Regulations also decide how the model issimulated. There are two simulation options available to the users:

a) The technical optimisation decides the heat and electricitygenerating plant operating strategy so as to minimise import/export of electricity and fuel consumption. This option is suit-able to study technical problems, such as excess electricity orCO2 emission.

b) The economic optimisation aims at total cost minimisationwhere all units, except renewable plants, operate according totheir marginal costs. This option is useful to study economicoutcomes, such as total annual cost or electricity price.

Detailed consumption, production and investment results areobtained as outputs of the model. These outputs are analysed toidentify the effects of initial assumptions about energy systems andregulation strategies on the simulation. Based on these, conclusionscan be made.

2.2. The paper’s analytical approach

Ostergaard [22] suggests that a number of optimisation criteriacan be considered for renewable energy integration to identify theoptimal energy mix. Even the economic and techno-operationalobjectives can be analysed using different criteria and the optimaldesign will vary depending on the objective chosen. In this study,the optimal wind level for the UK in 2020 will be determined bylooking at total social cost. Specifically, wind level will be increasedgradually, and the total annual cost will be examined to identify thetotal wind capacity that results in the lowest annual cost for thesociety. Total annual cost covers capital and fuel cost, as well as

2 For further information, please see Ref. [14]. A review of tools is available inRef. [15].

capacity cost, but other system costs like balancing and networkrelated costs are excluded. This will be shown in the economicanalysis.

In addition, a technical analysis will be performed beforehand toaddress two problems for wind integration: critical excess electricityproduction (CEEP) and CO2 emissions. The avoidance of CEEP isrequired since CEEP can cause technical problems for the systemoperators and affect the generators’ income. Therefore, the highestwind penetration level that produces no CEEP will be identified andused as a pre-requisite for the economic analysis. Besides, threeregulation strategies will be investigated, and the most effectivestrategy to reduce CEEP and CO2 emissions will be chosen for theeconomic analysis.

The optimal wind level will be found for two different energysystems. The purpose is to check the impact of several configurationswithin the system on wind integration. These configurations,including flexible electricity demand, district heating size, andconventional plants’minimumgrid sharewill be discussed further inthe next section (2.4 Scenarios). The decision to choose these threecriteria and then construct an alternative energy system derivesfrom a qualitative analysis of the commercial, technical andregulatory challenges for wind integration in the UK. The basicframework of this paper is shown in Fig. 1.

2.3. Data

To analyse the issue of wind power integration into the Britishenergy system in 2020, the energy balance for 2020 is required asan input. This is constructed based on DECC updated energy andemissions projections [16]. Some inputs not available from theabove sourcewere forecast using a simple growth rate compared to2008 data. In this paper, total electricity demand includes energyindustry use, pumped storage and net import. Conventional powerplant capacity, including coal, oil, gas, are from Ref. [8], which takesinto account plant closures and new plants in 2020. Wind capacity,including mix of onshore and offshore, is based on Ref. [8]. Detailedgeneration capacity is presented in Table 1.

Fuel and CO2 price scenarios are taken from Ref. [17], and areshown in Table 2. Capital costs of conventional and renewablepower plants are as in Ref. [18], using a mix of first-of-a-kind andn-of-a-kind estimates. Capital costs are expected to fall from 2009level, so an index from 0.85 to 0.9 is applied to various technologies.Energy data are in gross caloric value (GCV), while costs are in 2009GBP (£). This paper uses one interest rate level of 3.5%.

2.4. Scenarios

Scenarioswere developed to capture alternative configurations ofthe energy system and to analyse regulation strategies. Each scenarioincludes ten cases, where wind power production increases from0 TWh to 180 TWh (0e50% of total electricity generation). Com-paring these cases with the “base” case of no-wind power showshow renewable integration affects outcomes in that scenario. Eachenergy system will be combined with one regulation strategy tocreate a full dataset for EnergyPLAN model.

2.4.1. Energy systemReference system (Ref Sys): This is the UK energy system in 2020

that assumes no significant change in transmission and distribution.Energy demand of major sectors is presented in Table 3.

Alternative system (Alt Sys): The alternative system differs fromthe reference case as indicated below:

- Flexible electricity demand: It is assumed that demand can beactively managed according to the system operator’s request:

Table 1Wind and conventional power plants’ capacity.

Wind output (TWh) 0 20 40 60 80 100 120 140 160 180

Onshore (TWh) 0 20 28.2 28.2 28.2 28.2 31.7 31.7 36.4 36.4Offshore (TWh) 0 0 11.8 31.8 51.8 71.8 88.3 108.3 123.6 143.6Onshore capacity (MW) 0 8781 11,497 11,497 11,497 11,497 12,697 12,697 14,328 14,328Offshore capacity (MW) 0 0 3499 9404 15,240 21,016 25,200 30,154 33,594 38,571Conventional power plant (MW)a 63,402 61,900 60,600 59,300 58,231 57,700 57,500 57,300 57,100 56,900

a Conventional power plant includes coal, oil, gas and biomass with fixed share of 50.8%, 1%, 40.1% and 8.2%. Nuclear capacity is fixed at 6022 MW. Other generation (hydro,river hydro, wave) sum up to 2219 MW. District heating CHP is 1200 MW.

Reference System

Data

EnergyPLAN

Wind level

Qualitative Analysis on Commercial, Technical, Regulatory Challenges

Sensitivity Analysis

Alternative System

Data

EnergyPLAN

Wind level

Fig. 1. Analytical framework.

N.A. Le, S.C. Bhattacharyya / Energy 36 (2011) 5975e5983 5977

it is cut but stays positive during tight supply, and raised butremains below given capacity during excess supply. This is theresult of advanced features in future appliances, such as deferredfreezers and fridges, deferred heat pumps, and electric vehicles.Estimates of annual flexible demand and maximum effect ofcapacity for the UK are made using expert judgement. Intra-dayflexible demand is taken as 5 TWh with a maximum capacity of3000MW, whereas intra-week flexible demand is considered tobe 3 TWh with a maximum capacity of 2000 MW.

- District heating: total district heating size is raised from10 TWh to 30 TWh. This represents moving from current policyto “pure” policy with de-risked interest rate for investors assuggested in Ref. [19]. Individual heating demand is reduced by20 TWh accordingly.

- Regulation: conventional plant’s minimum grid share is reducedfrom 35% to 30%, assuming more distributed generation,smoother transmission and more efficient balancing services.

Table 2Fuel price assumptions.

Fuel price (£/GJ) Low Central High

Coal 6.94 7.78 8.33Fuel 9.72 11.94 15.83Diesel 30.83 33.75 39.55Petrol 34.5 37.31 42.95Gas 11.11 14.17 17.22Biomass 4 4 4CO2 11.24 20.22 25.84

2.4.2. Regulation strategyThree alternative regulation strategies are considered in this

study as presented below.Reference regulation (Ref Reg): This case is based on the following

assumptions:

- At least 35% of conventional plant capacity is used for gridstabilisation.

- Interconnector capacity is 4200 MW.- Wind turbines run according to availability.- There are no measures to reduce excess electricity.

Alternative regulation 1 (Alt Reg 1): This assumes the following:

- Excess electricity is first reduced by replacing combined heatand power (CHP) with boilers, so that electricity generated byCHP is minimised.

Table 3Sectoral energy demand for the UK in 2020 (TWh).

2008system

Referencesystem

Alternativesystem

Electricity 399 390 382Flexible electricity intra-day 0 0 5Flexible electricity intra-week 0 0 3District heating 5 10 30Individual heating 457 362 342Industry 520 454 454Transport 676 691 691

0

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410420430440450460470480490500

0 20 40 60 80 100 120 140 160 180

Red

uctio

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ate (%

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missio

ns (

Mt)

Wind Production (TWh)

CO2 emissions

Reduction rate

Fig. 3. CO2 emissions e reference regulation in reference system.


- If further cut is needed, electric heating will replace boilers tomeet heat demand, so that there is more electricity demand toabsorb excess supply.

Alternative regulation2 (AltReg2): This isavariationof theAltReg1where in addition to the measures of Alt Reg 1 further regulation isconsidered forexcess electricity regulationbystoppingwind turbines(wind curtailment).

The model was run considering the above system configurations,scenarios and energy regulation strategies, and the quantitativeresults were obtained for technical optimisation and economicoptimisation. These results are presented in two subsequentsections. First, the technical results are presented, followed byeconomic results. Optimal wind level is chosen based on economiccost, but it must satisfy technical requirements.

3. Technical results

In technical terms, two main aspects are analysed for thereference and alternative systems under different regulationstrategies. These are critical excess electricity production (CEEP)from wind sources, and CO2 emission from the system. CEEP is thecritical amount left after using and even exporting power throughthe interconnector. This situation arises due to supplyedemandmismatches: if high wind power generation takes place during lowelectricity demand conditions, CEEP is likely to occur. Similarly, oneof the main objectives of wind power integration into electricitysystem is to reduce CO2 emission. A comparison of emissionreduction in various cases can therefore produce interestinginsights. We discuss the results for three scenarios below.

3.1. Reference system (Ref Sys)

Reference regulation in reference system: Fig. 2 shows changes inCEEP for the reference regulation when wind is integrated into thesystem. CEEP only appears when 60 TWh of wind power isintegrated into the system. At lower levels, no excess power appearsdue to the existence of the 4200 MW interconnector. But CEEP risessharply after that and reaches 54 TWh at 180-TWhwind power. Thismeans 30% of wind production (54 out of 180 TWh) is not utilised insuch a situation.

Fig. 3 shows the changes in CO2 emissions subsequent to windpower integration into the system. CO2 emission falls from 490 Mtin base case (no-wind) to 438 Mt at 160 TWh of wind powerintegration. This lowest level corresponds to a reduction rate at10.6%. However, CO2 reduction slows down after that, due toincreasing production from conventional plants to stabilise thegrid.

0

10

20

30

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50

60

0 20 40 60 80 100 120 140 160 180

Exces

s P

ro

du

ctio

n (T

Wh

)


Ref Reg

Fig. 2. CEEP e reference regulation in reference system.

Alternative regulations in reference system: The quantitativeresults show that two alternative regulations (Alt Reg 1 and 2) donot make any improvements for the reference system, both interms of CEEP and CO2 emissions. This is because actions to addresscritical excess production will be taken within the district heatingsubsector (CHP and electric heating), which is small in size(10 TWh) compared to total heat demand (372 TWh). This isa weakness of the reference system that will be improved in thealternative system below.

3.2. Alternative system (Alt Sys)

Reference regulation: Fig. 4 shows CEEP for reference regulation(Ref Reg) in both systems’ configuration. In the alternative system(Alt SyseRef Reg), CEEP only appears from 80-TWh wind power,compared to 60-TWh wind power integration in the referencesystem (Ref SyseRef Reg). This is obtained as a consequence ofhigher level of district heating in the system. In addition, thehighest CEEP at 180-TWh wind power integration stands at41 TWh, which is 14 TWh less than that in the reference system.This therefore suggests that for an effectivewind power integrationinto the British system, more focus on district heating is required.CO2 reduction also sees considerable improvement. As in Fig. 5,maximum reduction rate reaches 12% in the alternative system, 2%higher than that in the reference system.

Alternative regulations in the alternative system: Figs. 6 and 7present the results of alternative regulations in the alternativesystem. As can be seen, the performance improves slightly underthese alternative regulations. For example, Fig. 6 indicates thatalternative regulation 1 can control CEEP more effectively: at180-TWh wind power integration, CEEP is only 31 TWh (10 TWhlower than that in the reference system). Alternative regulation 2

0

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60

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Exc

ess P

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Alt Sys - Ref RegRef Sys - Ref Reg

Fig. 4. CEEP e reference and alternative systems with reference regulation.

05

1015202530354045

0 20 40 60 80 100 120 140 160 180

Exces

s P

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TW

h)


Ref RegAlt Reg 1 Alt Reg 2

Fig. 6. CEEP e reference and alternative regulations in alternative system.

390400410420430440450460470480490500

0 20 40 60 80 100 120 140 160 180

CO

2 E

miss

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ns (

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Ref Reg

Alt Reg 1

Alt Reg 2

Fig. 7. CO2 emissions e reference and alternative regulations in alternative system.

0

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14

0 20 40 60 80 100 120 140 160 180

CO

2R

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Ref Sys - Ref Reg

Fig. 5. CO2 reduction e reference and alternative systems with reference regulation.

-

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Ca

pita

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m

illio

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Offshore OnshoreConventional power plant Other capital cost

Fig. 8. Annual capital investment e reference system.

-

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45,000

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Gen

eratio

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Other RES

Offshore

Onshore

Conventional PP

Other sources

Fig. 9. Electricity generation e reference system.


again eliminates CEEP by stopping wind when required. RegardingCO2 reduction, Fig. 7 shows that there is not much differenceamong three regulations. However, the alternative system can stillreduce CO2 slightly more (maximum 12%) than the referencesystem (10%) when wind is integrated into the system.

Summing up, the technical analysis shows that the alternativesystem performs better than the reference system, in reducingCEEP and CO2 emissions. In particular, the alternative system cangenerate 180 TWh of wind power in 2020 (with zero CEEP and athighest CO2 reduction rate). If however the district heating systemdoes not develop as is considered in this scenario, the Britishsystem could only generate 160 TWh of wind power.

4. Economic results

Asbefore, the economic results are providedfirst for the referencesystem with a regulation strategy. Subsequently, the results for thealternative system are presented.

4.1. Reference system

Our optimal integration of wind power is based on theassumption that CEEP must be eliminated. Accordingly, alternativeregulation 2 is chosen for the economic analysis, where optimalwind level is chosen based on total cost. The energy system’s totalcost consists of annualized investment cost, fuel and CO2 cost, andother expenses (like net revenue from electricity trade). First, Fig. 8shows the annualized capital investment for the UK referencesystem in 2020.

As wind power is integrated into the system, capital investmentin the electricity sector changes. This is reflected by decreasinginvestment for conventional power plants, though by limitedamount; and increasing investment for onshore and offshore windturbines. Because other capital costs (other renewable, nuclear andother capital costs in heat sector) remain unchanged, total capitalinvestment increases significantly from £11 billions (no-wind) tomore than £18 billions (180-TWh wind integration).

Besides capital investment, changes in variable costs also takeplace mostly in the electricity sector, and therefore variable costsdepend on the level of electricity generation. Fig. 9 shows that theoutput from conventional power plants falls gradually with windpower integration. This however slows down from 140-TWh ofwind power integration, due to increasing grid-stabilisationrequirements.

As a result, total fuel andCO2 costs (in electricity, heat and transportsectors), show a pattern as shown in Fig. 10. Wind power integrationbrings down fuel and CO2 cost from £99 billions (no-wind) to low of£93.8 billions (140-TWh wind power). But the system’s variable coststarts rising at higher integration levels.

75,000

80,000

85,000

90,000

95,000

100,000

0 20 40 60 80 100 120 140 160 180

Co

st (£ m

illio

ns)


CO2 cost

Fuel cost

Fig. 10. Annual variable cost e reference system.

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Average Maximum Utilisation rate

Fig. 12. Conventional power plant’s capacity and utilisation rate.

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Conventional PP


Changes in the total cost of the energy system with windintegration are presented in Fig. 11. Total cost falls from £111.5billions (no-wind), to lowest at £110.5 billions (80-TWh wind),before shooting up again. It is concluded that 80 TWh of windproduction is the optimal-level based on the economic analysis,with saving up to 0.85% of the energy system’s total cost. This arisesdue to faster increase in the capital investment costs compared tothe variable cost saving achieved at higher levels of wind powerintegration.

Fig. 12 provides the implication of wind power integration forconventional power plants. Required capacity of conventionalpower plant (the maximum) reduces when more wind power isintegrated into the system, but the reduction is not significantamount due to limited wind capacity credit. On the other hand,actual generation from conventional plants (on average) can bereduced considerably at high-levels of wind power integration. Thisleads to a fall in the utilisation rate of the conventional plants, from54% (no-wind) to the lowest of 37.5% (140-TWh wind power).Certainly, low plant load factor can pose adverse economic-problems for owners of conventional power plants and reduceoverall system efficiency.

4.2. Alternative system

The capital investment in the alternative system is not thatdifferent from the reference system (apart from some more CHP indistrict heating, and some less gas boilers for individual heating). Sochanges in capital investment for wind power integration lookalmost similar to that in the reference system. This is not elaboratedany further here.

-2

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109,000 109,500 110,000 110,500 111,000 111,500 112,000 112,500 113,000 113,500 114,000

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Total Cost

Saving rate

Fig. 11. Total cost and saving rate e reference system.

But there are differences in electricity generation, which willlead to differences in fuel and CO2 cost. As Fig. 13 shows, thealternative system allows better utilisation of onshore and offshorewind generation: in particular, offshore electricity supply is2300 MW higher than that in the reference system. As a result,conventional power plant’s generation can be reduced up to2400 MW (21 TWh less) at 180-wind. This leads to a fall in fuel andCO2 cost for the alternative system as shown in Fig. 14. Fuel cost canbe reduced by up to £1.6 billions (180-TWh wind power case),compared to the reference system.

Fig. 15 shows the total cost of the alternative system as windpower production goes up. Total cost falls from £111 billions(no-wind) to the lowest at £110 billions (80-TWh wind), equal toa 0.91% saving rate. Although the optimal wind level is still 80 TWh,the alternative system shows two improvements in economic

Fig. 13. Wind generation difference e alternative vs. reference system.

-1,800 -1,600 -1,400 -1,200 -1,000

-800 -600 -400 -200

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0 20 40 60 80 100 120 140 160 180

Co

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es

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FuelCO2

Fig. 14. Variable cost difference e alternative vs. reference system.

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Ref Sys

Fig. 16. Convention power plant’s utilisation rate.

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Fig. 15. Total cost and saving rate e alternative system.


results over the reference system. First, as can be seen from Table 4,the highest cost reduction rate (0.91%) is better than that in thereference system (0.85%). Second, further increase in wind powerproduction does not push the rate down significantly e as happensin the reference system. This proves that the alternative system isbetter in integrating wind generation.

Specific implication for conventional power plants is againmentioned here. As shown in Fig. 16, the utilisation rate dropseven further in the alternative system, to as low as 35% as windpower production approaches 140 TWh. Because the conventionalcapacity remainedunchanged, andwindelectricity is better utilised,it is no surprise that plant load factor is reduced more in the alter-native system. Plant owners will be more negatively affected asa consequence.

To sum up, the optimal wind power integration level remains at80 TWh in the alternative system as was found in the referencesystem, but the alternative system shows better capability tointegrate wind, although the conventional plant utilisation ratedrops here. Whether this result holds in other contexts of fuel priceand capital cost, will be revealed in the sensitivity analysis.

4.3. Sensitivity analysis

The model results depend on a variety of input assumptions,among which commodity price and power plant’s capital cost aresubject to highest uncertainty. Accordingly, the sensitivity of thereported results to changes in these assumptions is explored in thissection. Two additional fuel price and capital cost assumptions(low and high) have been considered here outside the central

Table 4Wind integration e total cost (£ millions) and total cost saving (%).

Wind production 0 20 40 60 80

Reference systemFuel 89,041 88,172 87,368 86,561 85,8CO2 9807 9605 9419 9231 90Fixed OM 3503 3565 3731 3980 42Capital 7512 8044 8631 9351 10,0Other 1627 1580 1534 1456 12Total cost 111,490 110,966 110,683 110,579 110,5Total cost saving (%) 0 0.47 0.72 0.82Alternative systemFuel 88,549 87,680 86,875 86,041 85,2CO2 9789 9587 9400 9207 90Fixed OM 3587 3650 3815 4065 43Capital 7539 8071 8659 9379 10,1Other 1629 1582 1538 1488 13Total 111,093 110,570 110,287 110,180 110,0Total cost saving (%) 0 0.47 0.73 0.82

estimates used in the previous cases. This will show how theoptimal wind generation changes when a factor from the externalenvironment changes. Moreover, comparing the results from twoenergy systems will reveal which one is better at coping with theuncertainty of fuel and capital expenses.

Fuel price: As shown in Fig. 17, both the reference and alternativesystems are very sensitive to fuel price. For both systems, optimalwind power integration level drops from 80 TWh to 20 TWh in thelow fuel price case, which in turn yields limited cost savings. Incontrast, for high commodity prices, the alternative systemoutperforms when optimal wind power integration level increasesto 120 TWh, yielding a cost saving of 2%; compared with100 TWh wind power integration at a cost saving of 1.5% in thereference system.

Capital cost: Capital costs of conventional power plants, onshore,and offshore wind power plants are subjected to 5%, 10%, 20%changes respectively (up for the high case, and down for the lowcase). As shown in Fig. 18, higher capex reduces the optimal windpower integration level to 40 TWh in both systems. But with lowercapex, again the alternative system performs better: optimal windlevel jumps to 120 TWh, saving 1.8% of the total cost; comparedwith respective figures of 100 TWh and 1.4% in the referencesystem.

The sensitivity analysis therefore suggests that the results areinfluenced by the key price and cost variables but the resultsobtained are generally quite robust in the sense that rankings of thescenarios or regulation strategies do not change, although theabsolute value of the wind power integration will vary dependingon the price or cost assumptions.

100 120 140 160 180

72 85,365 85,065 84,948 84,967 85,12771 8954 8885 8858 8863 890032 4493 4701 4931 5108 534075 10,822 11,458 12,113 12,679 13,33793 1102 912 780 702 66243 110,736 111,021 111,630 112,319 113,3660.85 0.68 0.42 �0.13 �0.74 �1.69

54 84,585 84,064 83,725 83,557 83,53524 8872 8756 8686 8654 865516 4578 4785 5016 5193 542403 10,849 11,485 12,140 12,706 13,36490 1210 1023 860 763 71387 110,094 110,113 110,427 110,873 111,6910.91 0.9 0.88 0.6 0.2 �0.54

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Fig. 17. Fuel price sensitivity analysis.

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Fig. 18. Capital cost sensitivity analysis.


5. Conclusion

Using EnergyPLAN model, this paper finds that 80 TWh of windpower production can be optimally integrated into the UK energysystem in 2020. At this level of integration, the total cost of supply is

minimised, therefore, lower or higher wind integration level willincur more cost to the system. Under current and projecteddevelopments in commercial, technical and regulatory frameworktill 2020, such wind generation level is achievable, though it isassociated with certain difficulties. For example, bottlenecks in thewind turbine supply chain are biggest commercial challenges. Theseinclude limited numbers of turbine manufacturers and specialisedvessels for setting up offshore facilities, which result in low build ratefor wind farms. Besides, there are technical requirements for gridexpansion and reinforcement to connect offshore wind to onshoretransmissions, and properlymove power to load centres over the UK.Lastly, in order to incentivise much more wind power generation,the current Renewable Obligation scheme will need to be modified,in addition to other measures like the Feed-in Tariff.

Some of those difficulties can be addressed by changing theenergy system configurations: moving from centralized only tomore decentralized generation, and from passive to active demandmanagement. This is what we have considered in our two scenarios:a shift fromthe reference to the alternative systemwill improvewindintegration into theBritish system.Quantitative results showthat thealternative system is more effective than the reference in accom-modatingwind power: with optimality still at 80 TWh, but at highertotal cost saving rate. Sensitivity analysis resultswith fuel and capitalcosts, again show the alternative system can utilise more renewablegeneration: with higher optimal-level, and at higher saving rate.

The fact that optimal wind capacity remains at 80 TWh, andtotal cost saving only improves slightly when moving from thereference to the alternative system (with baseline fuel cost), cancome from several reasons. Firstly, this is because of the small sizeof district heating (30 TWh in the alternative system) compared tototal heat demand (372 TWh). This leads to limited impacts ofdistrict heating CHP, electric heating on the overall system.Secondly, the small size of flexible electricity demand (8 TWh)relative to total electricity demand (382 TWh), means that there isless room to cut electricity demand in low wind and push upconsumption in high wind situation. This again constrains thebenefits of high-level wind integration for the alternative system.

Outcomes of two energy systems lead to some policy recom-mendations. First, to support the alternative system with decen-tralized generation, the UK should create more incentives for smallgenerators. The distributed generationwill bring more flexibility tothe energy system, which is key to integrating variable energysources like wind. The UK new FIT scheme is the main tool, butother solutions to attract non-energy professionals are alsoimportant, such as credit support or simplified installation andoperation for micro generators at the household level. Second,long-term planning for grid development and pricing should becarefully (but also timely) designed. Moreover, the regulator shouldactively negotiate with offshore wind developers about onshoreconnection points. This is because while the shortest connectionline is best for developers, another (and probably longer) route canrelieve onshore bottlenecks and reduce extra deep-reinforcement.Balancing developers’ objectives with that of the system operatorwill be tricky but beneficial. Third, financial incentives to promoteactive demand management are necessary. Cost saving of thealternative over the reference system, suggests how much shouldbe paid to users engaged in the scheme. On the other hand,effective mechanism regarding capacity payment will be crucial tosupport conventional generators, given declining load factor.

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