TY - JOUR
T1 - Area price and demand response in a market with 25% wind power
AU - Grohnheit, Poul Erik
AU - Møller Andersen, Frits
AU - Larsen, Helge V.
PY - 2011
Y1 - 2011
N2 - Denmark, east and west of the Great Belt are bidding areas with separate hourly area prices for the Nord Pool power exchange, covering four Nordic countries and parts of Germany. The share of wind power has now increased to 25% on an annual basis in western Denmark. This has a significant impact not only on the electricity wholesale prices, but also on the development of the market. Hourly market data are available from the website of Danish TSO from 1999. In this paper these data are analysed for the period 2004–2010. Electricity generators and customers may respond to hourly price variations, which can improve market efficiency, and a welfare gain is obtained. An important limitation for demand response is events of several consecutive hours with extreme values. The analysis in this paper is a summary and update of some of the issues covered by the EU RESPOND project. It shows that extreme events were few, and the current infrastructure and market organisation have been able to handle the amount of wind power installed so far. This recommends that geographical bidding area for the wholesale electricity market reflects external transmission constraints caused by wind power.
AB - Denmark, east and west of the Great Belt are bidding areas with separate hourly area prices for the Nord Pool power exchange, covering four Nordic countries and parts of Germany. The share of wind power has now increased to 25% on an annual basis in western Denmark. This has a significant impact not only on the electricity wholesale prices, but also on the development of the market. Hourly market data are available from the website of Danish TSO from 1999. In this paper these data are analysed for the period 2004–2010. Electricity generators and customers may respond to hourly price variations, which can improve market efficiency, and a welfare gain is obtained. An important limitation for demand response is events of several consecutive hours with extreme values. The analysis in this paper is a summary and update of some of the issues covered by the EU RESPOND project. It shows that extreme events were few, and the current infrastructure and market organisation have been able to handle the amount of wind power installed so far. This recommends that geographical bidding area for the wholesale electricity market reflects external transmission constraints caused by wind power.
KW - Energy systems analysis
KW - Energisystemanalyse
U2 - 10.1016/j.enpol.2011.09.060
DO - 10.1016/j.enpol.2011.09.060
M3 - Journal article
SN - 0301-4215
VL - 39
SP - 8051
EP - 8061
JO - Energy Policy
JF - Energy Policy
IS - 12
ER -