Integration of Regulating Power Markets in Northern Europe

In order to ensure a stable operation of the power system, Transmission System Operators have to balance production and consumption of electiricty continuously. For this purpose balancing services are utilised. With the European objective to migrate to a sustainable power production, a significant share of generation is expected to be from renewable sources, with its inherent production forecast errors. To balance this variable production, the requirement for balancing services increases. The Nordic, particularly the Norwegian hydrobased power system is predestinated of providing such balancing services to the continental European power system.This thesis studies the integration of national regulating power markets, enabling the cross-border exchange of balancing services in Northern Europe. The research encompasses the development of a mathematical model for the regulating power market, which is based on a day-ahead spot market model. Furthermore, data models for the Northern European power system are developed. Succeedingly, these models are utilised for a set of case studies.The first part of the thesis focuses on the model development and implementation of system scenarios. The mathematical model of the regulating power market comprises the procurement as well as activation of regulating reserves and explicitly addresses the exchange of balancing services. This model is used to assess the integration of national regulating power markets.Two detailed data models are compiled, encompassing 2010’s and 2020’s state of the Northern European power system. For these scenarios the outcome of the the day-ahead spot market is analysed, which shows significant changes in the future system dispatch. Taking the system dispatch as input to the regulating power market model, its market outcome is investigated. The analysis illustrates significant cost savings for the integration of national regulating power markets.The second part of the thesis comprises a set of analyses, executed with the developed models. The increase in power production from renewable energy sources, especially wind power production is taken as a basis for the future development of the power system. With the changes in the power production portfolio in Northern Europe, including higher variability and increased production forecast error, the future outcome of the regulating power market is studied. Moreover, the impact of various forecast horizons for wind power production and the definition of different reserve requirement levels are investigated. In general the analyses illustrate the challenges due to increased power production from renewable sources. These result in higher system imbalances and hence costs in the regulating power market. It is shown, that an integration of national regulating power markets in Northern Europe provides a good possibility to counteract this cost increase, while the system security is enhanced.