Value of flexible consumption in the electricity markets

Benjamin Biegel, Lars Henrik Hansen, Jakob Stoustrup, Palle Andersen, Silas Harbo

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

33 Citationer (Scopus)
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Resumé

A transition from an oil and coal based energy system to a systems based on renewable and sustainable energy sources has begun in many countries throughout the developed world. As a pioneer, Denmark currently has a wind energy penetration of 30% in the electricity sector and an end goal of 100% renewables in all energy sectors by 2050. The main elements in this transition are an increase in the wind energy production and electrification of main energy sectors such as transport and heating. Activation of flexible consumption in the electricity markets is believed to be one of the means to compensate for the growth of fluctuating renewables and the decrease of conventional power plants providing system-stabilizing services. In this work, we examine the requirements for flexible consumption to be active in the spot market and the regulating power market in the Nordic system and estimate the costs of entering these markets; further, we briefly describe the debated and planned changes in the electricity market to better accommodate flexible consumers. Based on recent market data, we estimate the revenue that flexible consumers can generate by market entry depending on the capacity of the consumers. The results show that consumers should have an energy capacity in the magnitude of 20−70 kWh to break-even in the spot market, while a capacity of 70−230 kWh is required in the regulating power market under current regulations. Upon implementation of the debated and planned market changes, the break-even capacity will decrease significantly, possibly to an energy capacity as low as 1 kWh.
OriginalsprogEngelsk
TidsskriftEnergy
Vol/bind66
Sider (fra-til)354-362
Antal sider9
ISSN0360-5442
DOI
StatusUdgivet - 1 mar. 2014

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Wind power
Power plants
Electricity
Chemical activation
Coal
Heating
Power markets
Costs
Oils

Emneord

  • Smart grid
  • Flexible demand
  • Electricity market
  • Renewable energy
  • Ancillary services

Citer dette

Biegel, Benjamin ; Hansen, Lars Henrik ; Stoustrup, Jakob ; Andersen, Palle ; Harbo, Silas. / Value of flexible consumption in the electricity markets. I: Energy. 2014 ; Bind 66. s. 354-362.
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abstract = "A transition from an oil and coal based energy system to a systems based on renewable and sustainable energy sources has begun in many countries throughout the developed world. As a pioneer, Denmark currently has a wind energy penetration of 30{\%} in the electricity sector and an end goal of 100{\%} renewables in all energy sectors by 2050. The main elements in this transition are an increase in the wind energy production and electrification of main energy sectors such as transport and heating. Activation of flexible consumption in the electricity markets is believed to be one of the means to compensate for the growth of fluctuating renewables and the decrease of conventional power plants providing system-stabilizing services. In this work, we examine the requirements for flexible consumption to be active in the spot market and the regulating power market in the Nordic system and estimate the costs of entering these markets; further, we briefly describe the debated and planned changes in the electricity market to better accommodate flexible consumers. Based on recent market data, we estimate the revenue that flexible consumers can generate by market entry depending on the capacity of the consumers. The results show that consumers should have an energy capacity in the magnitude of 20−70 kWh to break-even in the spot market, while a capacity of 70−230 kWh is required in the regulating power market under current regulations. Upon implementation of the debated and planned market changes, the break-even capacity will decrease significantly, possibly to an energy capacity as low as 1 kWh.",
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Value of flexible consumption in the electricity markets. / Biegel, Benjamin; Hansen, Lars Henrik; Stoustrup, Jakob; Andersen, Palle; Harbo, Silas.

I: Energy, Bind 66, 01.03.2014, s. 354-362.

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

TY - JOUR

T1 - Value of flexible consumption in the electricity markets

AU - Biegel, Benjamin

AU - Hansen, Lars Henrik

AU - Stoustrup, Jakob

AU - Andersen, Palle

AU - Harbo, Silas

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N2 - A transition from an oil and coal based energy system to a systems based on renewable and sustainable energy sources has begun in many countries throughout the developed world. As a pioneer, Denmark currently has a wind energy penetration of 30% in the electricity sector and an end goal of 100% renewables in all energy sectors by 2050. The main elements in this transition are an increase in the wind energy production and electrification of main energy sectors such as transport and heating. Activation of flexible consumption in the electricity markets is believed to be one of the means to compensate for the growth of fluctuating renewables and the decrease of conventional power plants providing system-stabilizing services. In this work, we examine the requirements for flexible consumption to be active in the spot market and the regulating power market in the Nordic system and estimate the costs of entering these markets; further, we briefly describe the debated and planned changes in the electricity market to better accommodate flexible consumers. Based on recent market data, we estimate the revenue that flexible consumers can generate by market entry depending on the capacity of the consumers. The results show that consumers should have an energy capacity in the magnitude of 20−70 kWh to break-even in the spot market, while a capacity of 70−230 kWh is required in the regulating power market under current regulations. Upon implementation of the debated and planned market changes, the break-even capacity will decrease significantly, possibly to an energy capacity as low as 1 kWh.

AB - A transition from an oil and coal based energy system to a systems based on renewable and sustainable energy sources has begun in many countries throughout the developed world. As a pioneer, Denmark currently has a wind energy penetration of 30% in the electricity sector and an end goal of 100% renewables in all energy sectors by 2050. The main elements in this transition are an increase in the wind energy production and electrification of main energy sectors such as transport and heating. Activation of flexible consumption in the electricity markets is believed to be one of the means to compensate for the growth of fluctuating renewables and the decrease of conventional power plants providing system-stabilizing services. In this work, we examine the requirements for flexible consumption to be active in the spot market and the regulating power market in the Nordic system and estimate the costs of entering these markets; further, we briefly describe the debated and planned changes in the electricity market to better accommodate flexible consumers. Based on recent market data, we estimate the revenue that flexible consumers can generate by market entry depending on the capacity of the consumers. The results show that consumers should have an energy capacity in the magnitude of 20−70 kWh to break-even in the spot market, while a capacity of 70−230 kWh is required in the regulating power market under current regulations. Upon implementation of the debated and planned market changes, the break-even capacity will decrease significantly, possibly to an energy capacity as low as 1 kWh.

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