112 — Estimation of capacity credit in Finland — different methods for different use

This paper describes two different approaches to define the capacity credit of wind power and different factors affecting the capacity credit in both methods are also described. The two ways are time-period-based and risk-based approaches. The time-period-based approach defines the availability of wind power during a peak load period with a certain probability that is based on wind power generation statistics. The risk-based approach utilizes the loss of load probability (LOLP). In addition, the two approaches are used to define the capacity credit of wind power in Finland. The results show that the capacity credit in Finland would be 6% of the installed wind power capacity with the time- period-based method and 10% with the risk-based method respectively. Finally, different meanings of the concept capacity credit in different contexts are discussed and new terms for capacity credit are suggested in order to avoid confusion of concepts. The advantages of the time-period-based approach are its direct implementation and the fact that it takes into account the variability and unavailability of wind power without complex reliability models. In addition, the time-period-based approach can give the availability of different types of generation independently of other production forms and it suits well to Nordel\´s way to estimate the power balance. The estimation of capacity credit is based on simultaneously measured wind generation and load data. The risk-based approach gives the added value of wind power capacity to the power system. It considers the reliability of all generation concepts and is a widely used approach. There are though some disadvantages: it requires lot of information about the power system in question and power system simulations are needed. Finally, the capacity credit of wind power calculated by risk-based method cannot directly be applied for power balance studies made in the Nordel, because the Nordic definition of capacity credit for other generat- ion types is based on the different approach. The concept "capacity credit" is used at least in two different ways: 1) it is the available wind power generation during the peak load period, which is not dependent on the power system it is connected to and 2) it is the value of additional wind power capacity on power system in terms of power system security, which is system dependent. Both definitions are correct. They are calculated with different methods and are often used in different contexts, which can create confusion. One has to be exact with definition if using the term capacity credit to avoid misunderstanding. Instead of capacity credit we recommend to use concepts "available wind power generation" and "capacity value of wind power".