The Economic Value of Wind Energy Nowcasting.

Summary In recent years, environmental concerns resulted in an increase in the use of renewable resources such as wind energy. However, high penetration of the wind power is a challenge due to the intermittency of this resource. In this context, the wind energy forecasting has become a major issue. In particular, for the end users of wind energy forecasts, a critical but often neglected issue is the economic value of the forecast. In this work, we investigate the economic value of forecasting from 30 min to 3 h ahead, also known as nowcasting. Nowcasting is mainly used to inform trading decisions in the intraday market. Two sources of uncertainty affecting wind farm revenues are investigated, namely forecasting errors and price variations. The impact of these uncertainties is assessed for six wind farms and several balancing strategies using market data. Results are compared with the baseline case of no nowcasting and with the idealized case of perfect nowcast. The three settings show significant differences while the impact of the choice of a specific balancing strategy appears minor.