The Value of (Improved) Renewable
Energy Forecasts to Operational and
Market Stakeholders
Justin Sharp, Ph.D.
“As yet the wind is an untamed and un-harnessed force;
And quite possibly one of the greatest discoveries hereafter to be made
Will be the taming and harnessing of the wind.”
3367 NE Oregon Street,
Portland, OR 97232
[email protected]
Abraham Lincoln, Bloomington, IL. April 4, 1858
Klondike Wind Farm. Photo © Justin Sharp
AMS Renewable Energy Committee
July 14, 2015
Justin Sharp, Ph.D. and Sharply Focused
•  1 year at BPA
•  6 ½ years at Iberdrola
•  Founded Sharply Focused
LLC in March 2012
•  Bridges the meteorology/
electric utility knowledge and
culture divide
•  Major clients include
EPRI, PGE, DOE, Vaisala
and Lockheed Martin.
3367 NE Oregon Street,
Portland, OR 97232
[email protected]
AMS Renewable Energy Committee
July 14, 2015
Integration of Forecasting into System Operations
EPRI R&D project in Renewable Integration Program
§  Goal: Develop methods to better integrate variable generation forecasts into
system operations, including improved consideration of uncertainty in
operational processes
§  Several topical areas being researched (2013-present)
–  Evaluation of Wind/PV forecast accuracy and value in operations
–  Technology watch and integration of new forecasting methods into operations
–  Use of probabilistic forecasts in grid operations
§  Other EPRI efforts related to forecasting and value:
–  National Research Council Weather Forecasting Needs for the Electricity Industry
–  Solar forecasting trials
–  Numerous other projects related to forecasting
§  Data requirements for behind the meter PV in load forecasting
§  Sky imaging techniques and demonstration
§  Long range lidar for wind forecasting (w/ASU)
§  Load forecasting: Artificial Neural Network approach (ANNSTLF tool)
Understanding value is key to application of forecasting in grid operations
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© 2015 Electric Power Research Institute, Inc. All rights reserved.
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Definition of VALUE (from Merriam-Webster)
1 : a fair return or equivalent in goods, services, or money
for something exchanged
2 : the monetary worth of something
3 : relative worth, utility, or importance <a good value at
the price> <the value of base stealing in baseball> <had
nothing of value to say>
Application to forecasting:
Avoided cost or ability to monetize knowledge (1 & 2)
The value of sometimes being right (3)
The value of falling within a particular range (3)
AMS Renewable Energy Committee
July 14, 2105
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A Brief History of Renewable Energy Forecasting
2003-2004: Early entry/early adopter forecasts
•  In-house NWP, in-house statistical engines, in-house wind→power
•  Typical cost: $2000-$3000/farm/month
NWP improvements, many competing products
•  No objective way to assess value except cheaper is better
WWSIS (GE) values DA forecasting improvement
(SOA->perfect) at $3B/yr for 20% penetration!
Specialization
Situational awareness and
decision support tools
2010-2015: Commodization
•  Almost exclusive government NWP inputs
•  Maximum automation; economies of scale
•  Little diversity in skill
•  Typical cost: $100-$200/farm/month
Typical cost: $2K$3K/farm/month
The Future?
AMS Renewable Energy Committee
July 14, 2105
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Forecast Cost Versus Forecast Value
•  Numerous studies show the value of VG forecasts is in the
hundreds of millions to billions of dollars range
•  Yet VG forecasting has become commoditized
•  Why are prices so low?
–  Cheaply/freely available “good” NWP
–  Difficult to quantify value with current use and evaluation practices
–  Over supply and competition
•  Consequences:
–  Little innovation/improvement is occurring. Price hurdle is
prohibitive. Incentive to run own models is low.
•  Philosophical
–  Is forecasting good enough?
–  At current penetrations? As penetration increases?
–  Will reliability concerns drive investment in data-driven short range
forecasting?
AMS Renewable Energy Committee
July 14, 2105
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Definition of VALUE (from Merriam-Webster)
1 : a fair return or equivalent in goods, services, or money
for something exchanged
2 : the monetary worth of something
3 : relative worth, utility, or importance <a good value at
the price> <the value of base stealing in baseball> <had
nothing of value to say>
Application to forecasting:
Avoided cost or ability to monetize knowledge (1 & 2)
The value of sometimes being right (3)
The value of falling within a particular range (3)
AMS Renewable Energy Committee
July 14, 2105
Variability and Uncertainty
80
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Plant Output
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Hrly Ave (Perf ect Fcst?)
Park Ave Wind
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Power (MW)
50
Wind Speed (m/s)
60
15
40
30
10
20
5
10
0
0
8
8
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Managing Variability and Uncertainty
The optimal application of
forecasting fits hand in
glove with market design
and system operation
Generation/MW
•  Forecasting provides knowledge
and reduces uncertainty
•  Market design/operating
practices appropriate for VERS
and designed to utilize
forecasting help manage
variability impact and reduce
risk.
Figure adapted from testimony in BPA 2012
rate case written by Kirby and Castille for NWG
AMS Renewable Energy Committee
July 14, 2105
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What determines VER and load forecast value?
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• 
• 
• 
• 
Market design/rules and operating practices
System operator charges, incentives and penalties
Forecast accuracy and reliability
Forecast confidence and a reliable measures of it
Variability of the wind resource in time and space
How the forecast is communicated and used
Forecasting Is Not A Silver Bullet
It Needs To Be Melded With Market/System Changes
That Maximize Benefits And Minimize Costs of VERs
AMS Renewable Energy Committee
July 14, 2105
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The Weather Forecast Value Chain
Weather
Atmospheric
Monitoring
Weather
Prediction
(usually
NWP)
Tailored
Forecast
Datasets
Dissemination
and
Communication
Perception &
Interpretation
Use &
Decision
Making
Actions &
Outcomes
VALUE
Adapted for Energy. Original from Jeff Lazo, NCAR
Pretty Good
Lots Of Room For Improvement
•  VG and load forecasts provide enormous ROI
•  But value chain is not being fully utilized, esp. for VG
•  More value can be extracted if there is more focus on the
elements to the right
•  These convert data into actions and outcomes
AMS Renewable Energy Committee
July 14, 2105
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Value is in the Eye of the Beholder (and of your BAA’s)
Wake
AMS Renewable Energy Committee
Example of mountain
waves coming off the
Cascades and a wake in
the lee of Mount Hood
from a 1KM WRF
model simulation
July 14, 2105
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An Integrated Approach to Forecasting is Needed
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As VG penetration increases, net load begins to
look very different
Behind the meter VG will make traditional load
forecasts obsolete
Deterministic forecasts will be insufficient
Optimal deployment of forecasting:
The duck plot over-simplifies
–  Enables commitment of cheapest units
–  Minimizes the amount of reserves that need to be
held to maintain reliability
–  Reduces transmission curtailment and oversupply
problems
• 
Holistic methods are needed that:
–  Consider system wide (and inter-system) impact
of weather
–  Can utilize probabilistic forecasts
LOAD AND VARIABLE GENERATION
ARE NOT INDEPENDENT
AMS Renewable Energy Committee
July 14, 2105
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How Do We Bridge the Gap
•  Understand your organization’s
requirements, motivation and incentives
–  Actionable forecast information and its
presentation is different based on an
organization’s needs
–  Better information has no value if it doesn’t
lead to better decisions
–  One size fits all format may be cheap but its
not always effective
•  Use all the data instead of throwing it away
–  Deploy the best Neural Network to make sense of data
•  Deploy tools that distill information to support decision
making and actions (of your well trained staff!)
AMS Renewable Energy Committee
July 14, 2105
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Re-inventing the Grid – Incorporating Forecasting into
System Design
•  For all types of generation (and load is analogous too):
Output = Dispatchable (1) + Known Variable Part (2)
± Uncertain Component (3)
•  Some might argue VERS have more attractive uncertainty characteristics
than some traditional generators
•  Calibrated probabilistic forecasts could allow (1), (2) and (3) to be
determined
•  Shorter dispatch horizons decrease (3) and thus increase (1) and (2)
•  Shorter dispatch intervals increase (1) as (2) and (3) decrease
•  Example: VERS (or load) could be used in ancillary services markets
–  Very cheap, fast regulation; up as well as down
–  Doesn’t make sense in current market structures esp. with PTC
AMS Renewable Energy Committee
July 14, 2105
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Re-inventing the Grid – Incorporating Forecasting into
System Design
•  All generation types have costs,
benefits and challenges
•  Current operating practices are
optimized around thermal generation
•  VER challenges are different =>
Market/system redesign is needed
•  The value of forecasting (load as well
as renewables) is inextricably linked
with system design
hable
Dispatc
Load
Wind
Solar
–  Its contribution MUST be considered in a
holistic fashion as we re-optimize towards
increasing RE penetration
–  When it stops being an after-thought we
might be able to evaluate its value!
AMS Renewable Energy Committee
July 14, 2105
Thank You
Questions
3367 NE Oregon Street,
Portland, OR 97232
[email protected]
Sunset Over Hay Canyon Wind Farm. Photo © Justin Sharp
“It always seems impossible until its done."
Nelson Mandela, 1918-2013