Right now, it is already clear that the power markets must be developed further in various regions and countries. Furthermore, the power systems and the electricity grid need to be developed in order to cope with the physical changes in production on our way to a fully carbon neutral power system.
Timo Kaukonen, Head of Operational Planning at Fingrid, comments that the need for electricity is going to be great and adjustments need to be made.
”In Finland, we are adding around 1,000 MW of wind power every year. Within a couple of years, we will be in a situation where wind power production reaches a level where the power system requires more flexibility, especially for congestion management such as countertrading and redispatching,” Kaukonen says.
Nail the forecast!
Fingrid is working hard to create possibilities and incentives for flexibility to the system. One key measure in this is developing better forecasting systems to cope with inaccuracies due to the weather changes in the coming hours and days.
According to Kaukonen, the creation of a more flexible power market means that all possible balancing power consumption and production is available on the market to make it work.
“The challenge here is the accuracy of forecasts in weather-dependent operations – but we are likely to achieve a sufficient level there. In addition, the flex market needs to have very clear-cut rules in order to attract the needed flexible capacity,” Kaukonen says.
The challenge here is the accuracy of forecasts in weather-dependent operations – but we are likely to achieve a sufficient level there.
North stands united
Nordic RSC (Regional Security Coordination) is a joint office for the Nordic TSOs with the prime target to support the TSOs to ensure security of supply of electricity and to maximise the availability of the Nordic electricity grid for the electricity market. Director Jens Møller Birkebæk from Nordic RSC says that most TSOs – Fingrid as a prime example – have initiated two really major changes during the recent years that will likely prove to be the backbone in dealing with the future electrification.
“First of all, a full digitalisation of the power system, reaching from the charging of your electric car to the balancing of the entire national supply and demand at high voltage level. Second, intensified regional cooperation in operational planning, in balancing of the power system and in market development,” he says.
According to Birkebæk, TSO collaboration is simply the key in all of this:
“In my view, the energy transition will fail – or at least be extraordinary expensive for the society – unless TSOs are collaborating very closely bilaterally, regionally and even Pan-European,” says Birkebæk, adding that fruitful collaboration is exactly what the Nordic TSOs have done in the
Nordic electricity markets for decades and only intensified of late.
Transparency increases trust
Nordic RSC, in itself, is a living proof of regional collaboration and digitalisation. Based on fully data-based decisions, Nordic RSC provides support to the Nordic TSOs to optimise the utilisation of the power system from long-term planning to close to real time.
“A major advantage of this is the transparency that data-based decisions are providing – this creates trust, because the basis for decisions will be visual for all parties and the best solutions across the region can be made for the benefit of the Nordic society at large,” says Birkebæk who believes that this transparent, trust-based collaboration will develop further in the coming years in all regions across Europe.
“We have recently seen incidents which brought the electricity system in continental Europe close to a collapse because of lack of or limited regional collaboration,” he cautions.
Digitalisation is just getting started
According to Birkebæk, new solutions are needed to solve the challenges of tomorrow – and this calls for innovation not only amongst traditional players in the industry, but also from new players.
”We have only seen the very early beginning of the advantages of digitalisation in our sector. Availability of data will enhance the opportunities for market-based innovation of new tools that can support electrification and the growth in electricity consumption without a proportional increase in new infrastructure,” he says.
We have only seen the very early beginning of the advantages of digitalisation in our sector.
Another challenge is safeguarding the open market while keeping the regional cooperation going. “We need to avoid national restrictions to trade also during the challenging times of the energy transition or maybe in situations where electricity prices are regarded too high.”
Hold the line
Kjell Arne Barmsnes is the chair for ENTSO-E Market Committee and well aware of the challenges facing the energy sector today. He believes that TSOs are working hard to make the transition happen.
“There are significant improvement plans for Europe such as improved market mechanisms and infrastructure expansions like offshore grids that will lay the foundation for the coming change,” he says.
Such a huge task requires broad shoulders – meaning everybody needs to contribute. “Electrification of Europe is not something you can do on your own: collaboration is needed on all levels.”
Improved markets and collaboration
Running markets more effectively – transitioning from a 60 minute resolution to a 15 minute one – is one important improvement to the market mechanisms. “The time resolution change is a prerequisite for balancing the system in a more effective way,” Barmsnes says.
According to Barmsnes, collaboration on regional and European level is required in all market timeframes to support the continued electrification.
“We are moving towards European solutions and a European balancing market, and in doing so regional collaboration will still be important to handle regional specificities in support of the European solutions.”
We are moving towards European solutions and a European balancing market.
Looking ahead, new solutions are needed to support the large penetration of renewables that are foreseen. Barmsnes observes that new and improved IT solutions with more and better data will be crucial in this regard.
“Digitalisation, including cyber security, becomes increasingly important in this transition.”
Collaboration requires compromise
Tahir Kapetanovic, as the Chair of the ENTSO-E System Operations Committee, has a good handle on the topic, as well. He says that TSOs are ready for the challenges of electrification and are, indeed, solving many of those challenges as we speak.
“What is needed is internal collaboration and willingness to compromise,” he says, adding that “nothing is more important” than TSO cooperation, if one wants to make the great leap to electrification successfully.
“There is still some egoism here or there and reluctance to adjust a bit your own goals for the greater good, but we have great examples of smooth collaboration that really works, like the decades-long cooperation of the four Nordic TSOs and also of the bigger ‘family’ of 29 TSOs of Continental Europe,” Kapetanovic says.
“The biggest challenge for the TSOs right now is that we must all be fully committed to the cooperation and mutual support in order to master this transition we are in.”
Patience is required, too, since change does not take place overnight:
“Even with the renewables coming in strong, natural gas will probably be around for 20-30 years.”