Integration of renewable energy in the European power grid: Market mechanism for congestion management

With the increased use of wind energy several Transmission System Operators (TSO) have increasing difficulties for congestion forecasting due to the unpredictable nature of the energy source. To maintain the state of the system within acceptable and secure operating conditions, the TSOs require the curtailment of the production of generators to avoid local congestion on the power grid. These actions reduce the revenue of renewable producers and limit the development of green energy. This is because renewable producers with support schemes bear the inherent cost of congestion when they are re-dispatched. This paper proposes two types of market mechanism that solve the above mentioned problems in case of local congestion. The first mechanism consists in a compensation between renewable producers to limit the amount of redispatched generation in situations when the local congested power grid incorporates only renewable production. If both renewable and conventional productions are connected close to each other, a second mechanism will be used to incentivize competition among power adjustment offers.