Chapter 3. Analysis of reserve by hour
2. Analysis of reserve pattern by time
Table 3-3 shows the amount of reserve per hour by scenario on a representative day in summer. In Case 1, the amount of average required reserve per hour is 3,051MWh, but in Case 2_Wind and Solar, it rises significantly to 11,765MWh. In Case 3_Wind and Solar, where an ESS (5GW) is introduced, the average required reserve per hour declines significantly to 4,850MWh.
Meanwhile, in Case 2_Wind and Solar, the maximum reserve is 20,105MWh, and the minimum reserve is 3,063MWh, revealing a significant variation in required reserve by time.18 Figure 3-4 shows the average load-following reserve and average contingency reserve by scenario, indicating that, when VRE is deployed in a large scale, the load-following reserve is larger than the contingency reserve.
Table 3-3. Analysis of required reserve per hour by scenario on a representative day in summer MWh/
hour
Load-following reserve Contingency reserve Sum of
average reserves
Average Max Min Average Max Min
c1 2,585 6,643 40 466 466 466 3,051
c2w 6,245 8,914 2,432 2,638 3,712 1,051 8,883
c2w 5,716 10,742 40 2,439 5,154 466 8,155
c2ws 8,022 13,196 2,100 3,743 6,909 963 11,765
c3w 2,828 6,835 - 641 2,414 - 3,469
c3s 2,324 5,588 - 108 1,439 - 2,432
c3ws 3,638 8,243 - 1,212 4,539 - 4,850
Source: author
Figure 3-4. Average contingency and load-following reserves by scenario on a representative day in summer
18 Sum of maximum load-following reserve and maximum contingency reserve and sum of minimum load-following reserve and minimum contingency reserve.
Source: author
Figures 4-5 and 4-6 show the 24-hour reserve profiles per hour for up and down reserves. In Case 1, where uncertainty is low overall, at times when power demand increases or decreases, only a small amount of load-following reserve is needed. Case 2_Wind and Solar is similar to Case 2_Solar and requires higher reserve per hour on the whole.
In Case 3, overall, the required reserve by time dropped remarkably and effectively. However, Case 3_Wind and Solar shows that a certain level of reserve is necessary, especially during peak demand hours, suggesting that additional ESSs are needed.
Figure 3-5. 24-hour required reserve profile per hour by scenario on a representative day in summer (1)
Case 1
Case 2_Wind Case 2_Solar
Case 3_Wind Case 3_Solar Source: author
Figure 3-6. 24-hour required reserve profile per hour by scenario on a representative day in summer (2)
Case 2_Wind and Solar
Case 3_Wind and Solar Source: author
3. Analysis of the impact of the reserve price
One of the aims of this study is to identify the extent of the increase of reserve necessary to maintain grid stability while the deployment of wind and solar PV increases. One of the inputs necessary to determine the amount of reserve is the reserve price. For the analysis conducted in this study, we applied the average price of reserve in Korea over the past 10 years (KRW 3,000/MWh), which does not reflect opportunity costs because the share of VRE is low and the reserve price is not determined by supply and demand in the Korean market. As a result, the reserve price in Korea is lower than in other countries. By analyzing the impact of price changes on reserve, this study derives policy implications related to reserve prices and markets.
To analyze the required reserve to respond to reserve price changes, the average reserve price of major ISOs in the United States (USD 5.6/MWh (KRW 6,300/MWh)19), which appears to be more realistic than the price in Korea, was applied (Table 3-4).
Table 3-4. Average spinning reserve prices in 2014 by ISO in the United States
ISO Spinning reserve offer price (USD/MWh)
CAISO 3.34
ERCOT 14.15
MISO 2.58
ISONE 2.53
NYISO_E 6.49
NYISO_W 4.07
PJM 4.21
SPP 7.46
평균 5.60
Source: Zhi Zhou, Todd Levin, and Guenter Conzelmann, 2016, Survey of U.S. Ancillary Services Markets, p.34.
Table 3-5 shows a comparison of scenarios using a high reserve price (KRW 6,300/MWh) and scenarios using the existing low reserve price. With the existing wind-solar PV combination model (Case 2_Wind and Solar: c2ws) and a new reserve price model (Case 2_Wind and Solar_r1: c2ws_r1), if the reserve price doubles, the required reserve drops by 32%, and the integration of renewable generation into the grid falls by 26.1%. With the rise of the reserve price, the ability to respond to the variability of renewable energy decreases, the required reserve amount decreases, and renewable energy that cannot be integrated into the power grid is curtailed. As a result, renewable generation that can be integrated into the power grid declines.
Table 3-5. Optimization results using high reserve price and current low reserve price: generation and reserve
(E [MWh]/day) c2ws c2ws_r1 c3ws c3ws_r1
E [renewables generation] 346,807 342,078 347,825 345,363 E [non-renewable generation] 1,716,981 1,721,709 1,717,326 1,720,186 Load-following up reserve 99,817 80,279 45,580 31,770 Load-following down reserve 84,684 61,180 38,089 28,558 Contingency reserve 88,507 60,291 27,928 10,182 E [load curtailment] 0.54 0.61 0.24 0.19 Source: author
Figure 3-7 illustrates the analysis results above. Under the low reserve price scenario (c2ws) and high reserve scenario
19 KRW 1,125/USD, as of October 18, 2018 (basic KRW/USD exchange rate quoted by the Bank of Korea).
(c2ws_r1), as the reserve price rises, the scope of variability that grid operators can accept as appropriate shrinks, and reserve decreases, increasing the loss of renewable energy and thus reducing the generation of renewables.
Figure 3-8 shows the reserve profile by reserve price and time under the Case 2_Wind and Solar scenario. Relative to the scenario with the low reserve price, the scenario with the high reserve price leads to a smaller required reserve amount over the entire period.
Figure 3-7. Low reserve price (left) and high reserve price (right): renewables generation and required reserve
Source: author
Figure 3-8. Reserve profile by time under low reserve price and high reserve price: Case 2_Wind and Solar
(a) Low reserve price
(b) High reserve price Source: author
Figure 3-9 compares the system operation cost saving effect when an ESS is used in the low reserve price and high reserve price scenarios. Using solar PV and wind power, the system operation cost saving effect of an ESS with a high reserve price improved significantly by 76% compared to that with a low reserve price. This suggests that a high reserve price further facilitates the process through which an ESS reduces the reserve by reducing the variability of renewable energy. In terms of the cost of generation, while a high reserve cost leads to the loss of renewable energy and increase in the cost of generation, ESSs mitigate the variability of renewable energy, which decreases the loss of renewable energy and ultimately lowers the cost of generation.
This finding indicates that if the reserve price is raised to a level that reflects the opportunity cost of reserve, the value of the benefits provided by ESSs as a flexibility resource of VRE increases, further boosting the economic feasibility of ESSs. In other words, if an appropriate reserve price is introduced into the electric power market, various flexibility resources intended to reduce the variability of renewables compete for adoption, increasing the efficiency of resource allocation. In this respect, the introduction of a reasonable reserve price into the market is critical to the efficient operation of the future power market, where the penetration of renewables will increase rapidly. Over a longer term, a reserve market where the reserve price is determined needs to be fostered.
Figure 3-9. Low reserve price (left) vs. high reserve price (right): cost-saving effect of ESS
Source: author
백만원/일 Million KRW/day
3천원 KRW 3,000
6.3천원 KRW 6,300