Competence building capacity shortage

The objective of the project 'Competence Building Capacity Shortage' has been 'to increase knowledge about central approaches aimed at solving the peaking capacity problem in restructured power systems'. With respect to reserve markets, a model was developed in the project to analyze the relations between reserve requirements and prices in the spot and reserve markets respectively. A mathematical model was also developed and implemented, which also includes the balance market, and has a good ability to predict the relations between these markets under various assumptions. With some further development, this model can be used fore realistic analyses of these markets in a Nordic context. It was also concluded that certain system requirements with respect to frequency and time deviation can be relaxed without adverse effects. However, the requirements to system bias, Frequency Activated Operating Reserves and Frequency Activated Contingency Reserves cannot be relaxed, the latter because they must cover the dimensioning fault in the system. On the other hand, Fast Contingency Reserves can be reduced by removing requirements to national balances. Costs can furthermore be reduced by increasingly adapting a Nordic as opposed to national approach. A model for stepwise power flow was developed in the project, which is especially useful to analyze slow power system dynamics. This is relevant when analysing the effects of reserve requirements. A model for the analysis of the capacity balance in Norway and Sweden was also developed. This model is useful for looking at the future balance under various assumptions regarding e.g. weather conditions, demand growth and the development of the generation system. With respect to the present situation, if there is some price flexibility on the demand side and system operators are able to use reserves from the demand side, the probability for load shedding during the peak load hour is close to zero under the weather conditions after 1990 and if the availability of Danish import and hydropower is normal. Finally, an analysis was done of Capacity Subscription, a model where consumers pay for the capacity they use during system peak load. It was shown how this model can be embedded in the Nordic market solution. However, given the present situation which is not seen as critical, a prospective introduction of this model would lie some years into the future. Further research with respect to technological solutions and market communication should be undertaken to learn more about these central issues for this model. (author)