From electricity smart grids to smart energy systems: A market operation based approach and understanding

The challenge of integrating fluctuating power from renewable energy sources in the electricitygrid by the use of smartgrids cannot be looked upon as an isolated issue but should be seen as one out of various means and challenges of approaching sustainable energysystems in general. Therefore, electricitysmartgrids must be coordinated with the utilisation of renewable energy being converted into other forms of carriers than electricity including heat and biofuels as well as energy conservation and efficiency improvements, such as CHP and improved efficiencies e.g. in the form of fuel cells. All such measures have the potential to replace fossil fuels or improve the fuel efficiency of the system. However, they also add to the electricity balancing problem and contribute to the excess electricity production and thereby to the need for electricitysmartgrids. The long-term relevant systems are those in which such measures are combined with energy conservation and system efficiency improvements. This article illustrates why electricitysmartgrids should be seen as part of overall smartenergysystems and emphasises the inclusion of flexible CHP production in the electricity balancing and grid stabilisation. Furthermore, it highlights some recent developments in the Danish electricitymarketoperation.