Economic Impact Assessment of using Congestion Management Methods to enable increased Wind Power Integration on Gotland : Performed in collaboration with Vattenfall R&D

Abstract: Congestion management methods are useful regulatory mechanisms to prevent transmission capacity problems. This thesis intends to assess whether congestion management can be cost effciently used to postpone or even avoid network capacity reinforcements while increasing the hosting capacity of wind power on Gotland. Two methods, re-dispatch and market splitting, are studied in details and applied to the Gotland case. A simplified electricity market model using historical data from Gotland was designed to perform the simulations. While these methods pass the cost of lack of transmission capacity on diffrent actors in the electricity market (mainly grid owner for re-dispatch and consumers and producers for market splitting), simulations indicate that both method could be employed to raise the installed production capacity of wind power on Gotland by at least 25MW above the stated limit of 195MW without negatively impacting the income of any actors. Moreover, market splitting eÿciently reflects the transmission problems on the energy price of Gotland, thus giving economic incentive for flexible power consumption to alleviate the problems.