Integration of 50 % wind power in a CHP-based ... - Ea Energianalyse

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Integration of 50 % wind power in a CHP-based ... - Ea Energianalyse

18 Characteristics of the Danish energy system3.2.4. Market compositionGeographical market division in the Elspot area:Norway 2Norway 3SwedenNorway 1FinlandWest‐DKEEXEast‐DKKontekFigure 3.3. A geographical overview of the markets in the El Spot-area. Note that Sweden andFinland have not being internally divided into markets like the rest, and that the Kontek arearepresents the former East Germany, while the remaining German system goes under EEX.(Source: Nordpool Spot)The Spot marketThe Spot market is the place where producers and buyers trade physical power. Theprimary function of an organized spot market for electricity is to maximize cost efficiencyby ensuring that the most economic supplier get to satisfy the demand for power (NordPool Spot)Ever since the Danish power systems and its parties fully switched to market conditions,all trading activities in the Nordic area have been taking place at the physical spot market:Elspot – owned and managed by the company Nordpool Spot. Here, power is tradedone day ahead on an hourly basis every day. Other goods such as CO2 certificates aretraded on Nordpool as well. Entrants on Elspot are primarily producers, heavy industrialconsumers buying for themselves and finally; retailers – reselling the energy to “regular”consumers such as households.Today, Elspot prices are formed in eight different price areas allocated on five countries 7 .Although the power is traded on an hourly basis, not all energy on Elspot is traded viathe hourly bid. Some quantities are offered for much longer time periods, in fact, somebids are independent of price for all hours. Also, a part of the suppliers make use of blockbidding while setting a sort of 'all or nothing' condition (Elspot). In this way they ensurethe plants generating the power (usually the ones with cost heavy start-ups) a fixed7Countries include Denmark (2 price areas), Sweden (1), Norway (3), North-east Germany (Kontek) (1),and Finland (1). Political bodies have for some years tried to encourage Swedish TSO authorities toperform a much needed fragmentation into more price areas in order to encounter the frequent bottlenecksituations.

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