Wind Generation in Day-Ahead Energy Markets in Italy: Imbalances Penalties

In Italy there has been recently a growing interest in wind energy exploitation. This situation is fostered by the adopted incentive mechanism and by the possibility to sell the energy directly into the Pool or using a regulated tariff option. In this paper an evaluation of the economic opportunity for these two choices has been carried out. Moreover in Italy the wind imbalance costs are compensated by all the consumers. Considering the same market structure and referring to the state-of-the-art of wind power forecasting the imbalances penalties of some Sicilian wind farms have been compared with the achievable gain into the Pool with respect to a regulated tariff. Using different stochastic approaches and with the historical data, easily available both for the system operator and for the electrical regulator, various scenarios have been analyzed. Thus a possible mechanism for imbalance settlement has been proposed in order to maintain the pool more profitable than regulated tariff and to foster the use of good forecasting methods.