Integrating wind - influence of transmission grid extension on European electricity market prices

The increasing share of wind power production in the electrical system is a challenge for TSOs, power producers and electricity markets. Grid reinforcements and extensions will be necessary for a secure integration of renewable energy sources into the electrical system. Based on a combination of three highly sophisticated models the effects of wind power production and grid expansion on the European electricity market prices are evaluated. Using a high resolution numerical weather prediction model the actual wind power production is simulated for three scenarios covering the years 2010, 2020 and 2030. These scenarios are taken as an input to a regional power system model computing a cost optimal macroscopic grid expansion. In a last step the European market prices are simulated using the power system simulation tool PSST. The influence on market prices and load flows, before and after the evaluated grid expansion scenarios, are analyzed as well as the costs and benefits of the proposed grid extensions. The results for both future scenarios in 2020 and 2030, display that the proposed grid expansion is amortized in around 6 years. In addition to that important social-economic benefits arise due to lower average electricity prices.