Evolving Electricity Market Design for further integration of wind energy

Both Denmark and China have ambitious plans to increase wind energy within electric power sectors. E.g. the Danish national energy strategy suggests 50% electricity supplied by wind by 2025, while in China the Renewable Energy Law is recently passed and accordingly 30 GW wind installation capacity is set as the national target for 2020.

A key prerequisite for further integration of wind power is an integrated and effective electricity market system that can enable bulk power trading without prejudices against traditional or wind-like distributed and renewable generation resources and compromise to the security of supply. As a leading country of wind energy, about 20% electricity (2007 data) is supplied from wind in Denmark, and bulk electricity is traded through a day-ahead plus an hourly balancing market system. With the increase of penetration level, operating the Danish power system has experienced a variety of difficulties and a high cost for ancillary services, due to the very limited predictability and high intermittence of the wind. This indicates that the current market structure is not optimal in terms of economy and system operation, particularly for the future where large amount (>30%) of fluctuating wind and other renewables will be integrated. It is therefore the objective of this project is to join the research forces in Denmark and China towards development a (near) real time electricity market framework that can facilitate further and better integration of wind power into the electric power systems therefore contributing to the wind energy development in both countries.

By collaboration between Danish and Chinese partners in this project, it is expected a formal project application on the subject will be produced ready for submission to relevant funding organisations in Denmark, China or EU.