Local energy markets

Wind power as well as CHP and electricity savings contribute to an increased demand for flexibility. This project has analysed different ways of increasing flexibility by development and incorporation of local regulation mechanisms in the energy systems. This strategy is compared with the opposite extreme, i.e. trying to solve all correlation problems via electricity trade on the international market. Analyses are made for the Eltra area (Jutland/Funen). Each alternative was analysed with a view to the socio-economic consequences of trade with our neighbouring countries via Nord Pool. The conclusion of the analyses is that it is possible to earn money by including the CHP plants in the balancing of fluctuating wind power. And there are major socio-economic advantages in equipping small CHP plants as well as the large CHP plants with heat pumps. By doing so it will be possible to increase the share of wind power from the present 20% to 40% without causing significant problems of imbalance between electricity consumption and production. Investment in increased flexibility is in itself profitable. Furthermore it is a benefit that the feasibility of wind power is improved. With a CO2-cost of DKK 100/ton and production costs for wind power of DKK 220/MWh the share of feasible wind power is thus moved from 25% of the electricity consumption in the present system to over 40% if investment is made in increased flexibility. How the effect of an increased share of wind power in electricity production influences the transmission grid, with or without investments in flexibility, has also been analysed. In general it is not profitable to extend the transmission lines to the Nordic countries. This also applies when potential commercial advantages are taken into consideration. However, the present public regulation does not facilitate the most advantageous solutions in a socioeconomic perspective. Thus, the report suggests several changes to the existing set of rules