The Economic Value of Improving Forecasting Accuracy in High Wind Penetrated Power Systems

As the percentage of renewables in the energy mix keeps rising, improving forecast accuracy of renewable power output becomes increasingly essential for economic planning and operation of power systems. However, in consideration of forecasting improvement costs or forecasting service costs, the forecasting solution with the highest accuracy is not always the most cost-effective one. Under this background, in this paper, we propose a strategy to assess and quantify the economic value of available forecasting solutions with attached costs in wind-penetrated power systems. The assessment is based on day-ahead unit commitment and economic dispatch model, aiming at minimizing total expected cost, including system operation cost and forecasting service cost. Uncertainty in wind power is modelled using scenarios which are dependent on selection decisions on forecasting solutions. The proposed model is formulated as a mixed-integer linear program. A case study based on a modified IEEE 30-bus system demonstrates the validity of the proposed method. Case study shows that the value of forecasting accuracy improvement is jointly affected by system flexibility and wind penetration level.