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PRIBAS – Pricing Balancing Services in the Future Nordic Power Market

PRIBAS – Pricing Balancing Services in the Future Nordic Power Market

Published 24 April 2017

The Nordic power market is in transition, both in terms of technologies used for power generation and market structures.

Binding targets exist for renewable power generation, as well as decisions to decommission nuclear generation capacity. Thus, the overall share of intermittent generation will continue to grow, and consequently, the need for flexibility and controllability both in production and demand will increase.

In this context there is a need for long-term price forecasts for all electricity products, including energy and different types of reserve capacity and balancing energy, in order to make robust and correct investment decisions, e.g. related to building new cables to the European continent and upgrading and expanding the hydropower system. We believe that consistent price forecasts should be obtained by use of fundamental multi-market models. Currently used fundamental market models for hydro-thermal systems typically only concern the product energy, assume that all uncertainty is revealed in weekly steps, and that all functional relationships are linear. These assumptions will be significantly challenged in the future European power market. The computation of realistic cost for balancing services, which also include the products reserve capacity and balancing energy, requires a much higher degree of details, e.g. in the representation of uncertainty and description of the physical system.

In this project we will develop and verify a model concept able to compute marginal prices for all physical electricity products in the Nordic power market. The concept should allow detailed modeling of all physical electricity products, flexible consumption and local storages on a fine time scale. A significant research challenge is to assess how the different market products and corresponding market clearing sequences impacts the system operation and costs.

Statnett, Svenska Kraftnät, Statkraft, E-CO Energi, Lyse Produksjon , Agder Energi , Hydro Energi, NTNU Elkraft, SINTEF Energi, The Research Council of Norway

The project is a Knowledge-building Project for Industry (KPN) funded by the Research Council.



Research Scientist

Project duration

2017 - 2020