Demand response in the Nordic electricity market
Planning and operating a power system can be challenging since production and demand must be exactly equal at all times, bottlenecks must be immediately addressed and capacity constraints in the network respected. A…
Planning and operating a power system can be challenging since production and demand must be exactly equal at all times, bottlenecks must be immediately addressed and capacity constraints in the network respected. A certain level of flexibility in the system is necessary in order to address critical situations when they arise. Today, such flexibility is provided by generators as flexibility on the consumer side is generally low.
In order to reduce greenhouse gas emissions from power generation, the power systems in the Nordic countries, as well as in the rest of Europe, are profoundly changing. In parallel with the “greening” of electricity generation by increased use of renewable energy resources, electricity consumption should be reduced through increased energy efficiency. However, renewable electricity generation such as small-scale hydropower, wind and solar has limited capacity to deliver flexibility to the power system. Hence, it is relevant to consider to what extent the provision of flexibility from the consumer-side could and should be facilitated.
This report is commissioned by the Nordic Electricity Market Group (Nordic Council of Ministers) and provides input to a Nordic strategy on how to address the potential need for consumer flexibility in a costefficient manner. The report is part of the Nordic Prime Ministers’ green growth initiative: The Nordic Region – leading in green growth.