ARENA Short-Term Forecasting pilot in the NEM: An interview with Utopus Insights, Vestas, and Infigen

The Australian Renewable Energy Agency (ARENA) awarded funds in March 2019 to develop a new short-term wind power forecasting solution for Infigen Energy’s Lake Bonney Stages 2 and 3 wind farms in Southern Australia. The funding was part of ARENA’s Advancing Renewables Program. The solution was developed by Vestas (Australia’s largest wind energy solution provider), together with its wholly-owned energy analytics digital solution provider, Utopus Insights. A short-term forecasting trial at Infigen Energy’s Lake Bonney 2 and 3 wind farms improved forecasting accuracy by an average of 26% when compared with AEMO’s forecasting system.

Here's an excerpt from a Q&A by ARENA with Utopus Insights, Vestas, and Infigen Energy on the pilot outcomes, learnings and what this means for the Australia renewable energy market.



Interview With: 

Utopus Insights: 

• Shekhar Kamath, General Manager, Business Development
• José Sebastiao, Director Of Portfolio Management And Customer Integration 

Vestas: 

• Hugh Mckenzie, Business Manager Fleet Optimization, Vestas Asia Pacific 
• Peter Cowling, Head Of Vestas Australia and New Zealand

Infigen Energy: 

• Matt Dickie, General Manager, Operations

WHAT WERE THE KEY DRIVERS FOR VESTAS AND UTOPUS INSIGHTS TO DEMONSTRATE THE ABILITY TO SELF-FORECAST?

VESTAS: Self-forecasting in the National Electricity Market (NEM) provides semi-scheduled generators with the opportunity to more  accurately predict their electricity production and more closely meet their dispatch target. By doing so, they can reduce their exposure to Frequency Control Ancillary Services (FCAS) ‘Causer Pays’ costs and contribute to stabilising the grid. Across Australia and New Zealand, Vestas currently services 3.7 GW worth of projects. Within a focus on the NEM, Vestas is positioned to play a key role in shaping a grid that is less reliant on FCAS and better equipped to absorb more renewables in its energy mix. Equally important is improving the business cases of renewable asset owners in the NEM, which we hope will lead to further investment in renewables, lower power prices for consumers and ultimately a reduction in carbon emissions.

UTOPUS INSIGHTS: Utopus Insights used the self-forecasting trial under ARENA’s Advancing Renewables Program, as an opportunity to explore and push the boundaries of Machine Learning by making renewable energy production forecasting as accurate as possible. The team strived to make renewables more dispatchable in the power market, and to improve the accuracy of five-minute forecasting, which is going to be increasingly important in the coming years, not only in this region, but worldwide. Self-forecasting is a clear fit in our mission to deliver digital solutions to Independent Power Producers (IPPs), farm owners and operators to maximize asset output. The ability to self-forecast helps renewable power producers minimize their exposure to financial penalties associated with 5-minute intermittent resource forecast requirements, which we have now proved to be among our strongest digital solution service offering. 

WHAT RESULTS ARE YOU MOST PROUD OF ACHIEVING IN THE TRIAL?

UTOPUS INSIGHTS: The fact that we were able to deliver commercial value early on to Infigen has been the most important achievement. Our forecasting models performed well early into the project to show results for the customer, and we were the first wind power self-forecasting service to qualify on behalf of Infigen Energy. What started as a trial project to test short-term forecasting, has developed into a solution from Utopus Insights that can now serve power producers in the NEM, and can also serve future global customers as market regulations evolve.

VESTAS: In addition, we’ve demonstrated that renewables have the capacity to contribute to greater power system security via data driven technology.

DID THE BENEFITS OUTWEIGH THE COSTS FOR SELF-FORECASTING FOR INFIGEN?

VESTAS: It was estimated by Infigen that the Causer Pays Factor (CPF) at Lake Bonney 2 and 3 reduced by 26% due to the more accurate self-forecast. The estimated cost saving was $198,000 (or $1,000 per MW) annually based on the median 28-day cost reductions. Infigen did however note that there has been a large historical variance in both the CPF and Regulation FCAS charges over varying 28-day evaluation periods at both wind farms, which makes it hard to narrow the estimated savings. Following the trial, Infigen and Utopus Insights have continued their partnership, with the Self Forecast continuing to be supplied as a Software-as-a-Service subscription. The estimated cost savings outweigh the costs of the subscription.

INFIGEN: The results we’ve seen have made a compelling case to Infigen that an ongoing subscription is worth the cost. It is very pleasing to see the financial benefits that the Vestas and Utopus Insights self-forecasting solution has been able to achieve for Lake Bonney 2 and 3 Wind Farms.

HOW DOES IMPROVED SHORT-TERM POWER FORECASTING BENEFIT THE NEM AND, ULTIMATELY, THE AUSTRALIAN CONSUMER?

VESTAS: Accurate short-term power forecasting improves the value capture of renewable energy asset investments while contributing to a more secure power system. When the supply of electricity more accurately meets the demand, in other words, when the forecasted production meets actual production, there is less reliance on high cost FCAS. With less FCAS required and a greater proportion of low-cost renewables in the energy mix, the wholesale cost of energy is expected to reduce, benefitting the Australian consumer. With the introduction of the 5-minute settlement rule in the NEM, the importance of accurate short-term forecasting will become more apparent. We look forward to the rule change and expect the Australian consumer to further benefit from lower power prices.

UTOPUS INSIGHTS: Utopus Insights’ aim is to offer an advanced forecasting solution that can reduce generator dispatch uncertainty, lower the operational cost of balancing energy supply and demand, and limit energy price volatility and regulatory complexity. Our solution will help deliver sufficient and reliable renewable energy to the market. Australia is leading the world in many ways. Creating an industry-leading product for that market is essential and differentiating, making renewable energy more competitive against conventional energy sources. Such a product also enables customers to make smarter and more profitable decisions about the energy they generate.

INFIGEN: Self-forecasting allows renewable generators to take advantage of the wealth of operational data they have of their assets. This results not only in financial savings but also in improved dispatch for the broader market. Being able to reduce dispatch uncertainty encourages more efficient electricity dispatch and can reduce the amount that reserves are called on to balance supply and demand within the network. Improved market efficiency results in savings for Australian consumers. Moreover, the improved operational efficiency of renewable energy enables companies like Infigen to invest in additional low-cost renewable generation.

As published on ARENA. Read the full interview here.