PowerDig develops different mathematical programming models to analyze the operations of the Norwegian power market and mechanisms for providing the needed flexibility to ensure a secure and efficient system. These activities include analyzing the current market design (Day-Ahead=>Intra Day=>Grid Redispatch), integrating flexibility markets, and understanding TSO-DSO coordination. These activities are under the perspective that digitalization and digital platforms will be an enabler on defining new roles, automatization, and market mechanisms
1. Modeling the Wholesale Electricity Market
As part of the PowerDig project, one essential task is establishing a comprehensive baseline of Norway’s current wholesale market landscape. This baseline allows to assess the impact of the incoming market structures on the country’s energy and flexibility trading dynamics.
PowerDig analysis covers the entire market chain, including the day-ahead market, intraday market, and the grid redispatch process, including cross-border transactions. For the intraday stage, we examine both the existing continuous markets and the forthcoming auction-based markets.
The introduction of a new auction-based intraday market, slated for production in 2024, marks a significant development. This market is designed to operate three auctions daily, although currently, it is only accessible in a testing environment. The specifics of these auctions are as follows:
IDA 1 features a gate closure time (GCT) at 15:00 CET, with the delivery period covering 00:00 to 24:00 the following day.
IDA 2 has a GCT at 22:00 CET, also with delivery from 00:00 to 24:00 the following day.
IDA 3’s GCT is at 10:00 CET, with delivery from 12:00 to 24:00 on the same day.
This detailed assessment of the current and upcoming trading mechanisms is crucial for understanding what market structures can enhance energy trading efficiency and flexibility in Norway.
2. Integration of Flexibility Markets
Flexibility markets might be crucial for integrating renewable energy sources and managing grid congestion. They enable energy consumers, distributed energy resources (DERs), and other assets to adjust electricity consumption or production in response to grid conditions, ensuring a balance between supply and demand. This responsiveness enhances grid stability, reduces peak electricity demand, and minimizes the need for costly infrastructure investments.
What role can Flexibility markets play in the power market? In day-ahead and intraday markets, flexibility allows for real-time balancing, reducing price volatility and mitigating grid congestion. By providing up- and down-ramping capabilities, flexibility markets could help stabilize prices and ensure efficient market operations. They also offer additional revenue streams for flexible assets, such as demand response and energy storage, by allowing them to participate in multiple market segments, thus optimizing their utilization and supporting a resilient and efficient power system.
A key characteristic of flexibility markets is the role of Digitalization and digital platforms as enablers of real-time data exchange, optimizing energy flows, and facilitating market transactions. They support the integration of distributed energy resources, improve grid management, and provide transparency, thus fostering efficient and resilient energy systems
3. TSO-DSO Coordination
The PowerDig project aims to analyze and design TSO-DSO coordination mechanisms tailored for Norway. This coordination mechanism is aimed at harnessing flexibility and understand how to enhance the security of supply within the system.
TSO-DSO coordination brings every potential of the energy network, from high-voltage transmission grids to local distribution networks, ensuring an efficient utilization of energy resources. The idea is to facilitate the coordination of the balancing needs of the TSO with local flexibility markets run by DSOs, or by separate companies in close collaboration with DSOs (the term used below is “aggregation-disaggregation services”).
Perfect TSO-DSO coordination would require huge amounts of information, communication and optimization across the TSO and DSO-levels (i.e. finding the detailed optimal dispatch across all network levels). PowerDig will look into a hierarchical approach that is designed to overcome this problem, “by adopting a top-down approach whereby the system is optimized at different layers, with each layer being designed so as to be as close as possible to respecting the institutional and technological constraints of future TSO-DSO coordination, without sacrificing the optimality of the dispatch solution.”
Case Studies
A central activity within the PowerDig project is the development and analysis of case studies, which serve as demonstrations of the project’s concepts and theoretical frameworks with specific and tangible cases. These analyzes also take into account the role of digitalization and digital platforms.
The case studies bring perspectives on the practical application and effectiveness of the newly designed markets, role of digital platforms, and TSO-DSO coordination mechanisms. Through detailed data analysis, scenario generation, and modeling analysis, these case studies will showcase further the implications of the three central market designs (see above).
In short, the case studies validate the project’s methodologies and market designs, and offer valuable insights into potential improvements and adaptations for broader application.
Technology platforms and digitalization
This part of the project focuses on understanding the advancement of digital solutions for modern energy systems. This includes the development and integration of digital platforms designed to facilitate enhanced security and efficiency in electricity markets. The initiative aims to design next-generation digital services that are not only resilient to cyber threats but also adept at managing the complex interactions across the energy value chain, including data sharing, analytics, and operational optimization.
This activity covers how to establish secure, automated platforms that can handle real-time process management and ensure the safe sharing of critical data among various stakeholders in the energy market. These platforms are intended to support a dynamic market environment where service provisioning is automated and aligned with regulatory and operational requirements. This integration will allow for a more flexible and efficient allocation of energy resources, thereby fostering innovation in service offerings and business models within the energy sector.
Furthermore, this activity delves into understanding the interactions between various digital platforms, assessing their roles in existing electricity markets, and defining new roles that harness the capabilities of digitalization.