Energinet to grow local flexibility markets in Denmark

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Danish national transmission system operator (TSO) Energinet plans to grow local flexibility markets to manage grid congestion.

The plan, which has been communicated to the Danish utility regulator Forsyningstilsynet, is focussed on areas of the country with wind or solar generation that is excess to local consumption and cannot be absorbed into the grid.

The proposal follows the completion of a pilot on the island of Lolland, the country’s fourth largest island located in the Baltic Sea. Lolland already is able to generate more electricity than is required locally and with the prospect of more renewable generation, congestion in the lines to the rest of the country is a growing concern.

The biggest challenge arises when both the wind and solar production is at a maximum, which occurs infrequently during a relatively small number of hours in a year.

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“Here it is a socio-economically good solution to shut down some of the local production and a local market creates competition to deliver the cheapest bids to do that,” says Thomas Dalgas Fechtenburg, energy engineer in Energinet’s Flexibility and System Services department.

“The alternative would be for Energinet to order electricity producers to switch off without competition to deliver a cheapest bid.”

During the pilot, which also involved the Danish energy association Dansk Energi, network company Cerius, Centrica and Copenhagen utility HOFOR, the local flexibility market was activated 11 times in six months, in most cases for a down-regulation around 50MW.

The largest down-regulation was equivalent to about 10% of the island’s total production during the hour in question, corresponding to 200% of the Lolland municipality’s average consumption.

Individual wind turbines were geotagged so each could submit bids for down-regulation in response to a request from Energinet, from which the TSO then selected the cheapest.

The pilot also highlighted the need for close cooperation with Cerius as the network operator to avoid any drop in the power quality.

Fechtenburg says that paying for local down-regulation can in some situations be cheaper than expanding the electricity grid. However, he adds that such local flexibility markets should generally be seen as a temporary operating solution until the power grid is expanded to be able accommodate all the renewable energy generation.

As it is usually possible to install a new solar park more quickly than expanding the electricity grid, it makes sense to extend the Lolland project to other parts of the country where local electricity production is growing rapidly, Energinet says.

In addition to Lolland, these include the next door island of Falster, west and north Jutland and South Zealand.

For its part following the pilot, Dansk Energi is working on a market design for flexibility in the distribution networks, which is expected to be completed before the end of 2021.