Large-scale integration of renewable energy into international electricity markets:The case of Danish wind power and the nordic electricity market

The paper presents the ability of different energy systems and regulation strategies to integrate renewable energy sources (RES) into the electricity supply system. The fluctuating electricity production from renewable energy must interact with the rest of the production units in order to make it possible for the system to secure a balance between supply and demand. At the same time most European electricity systems are in the process of being transformed into competitive electricity markets. Already today, the annual share of wind power in the western part of Denmark is nearly 20 percent, which has lead to excess electricity production and thus low prices on the Nord Pool electricity market. This paper describes how such problems can be avoided by the introduction of flexible energy systems including changes in the regulation of power plants and investments in heat pumps and heat storage capacity. Such investments are feasible because the ability to benefit from trade of electricity on the exchange is improved. At the same time the economic advantage of renewable energy is increased