Conference Paper

Peaking capacity in restructured power systems: experience and solutions

SINTEF Energy Res., Trondheim
DOI: 10.1109/PTC.2001.964621 Conference: Power Tech Proceedings, 2001 IEEE Porto, Volume: 1
Source: IEEE Xplore

ABSTRACT This paper discusses two alternative ways to ensure the
availability of power reserves through market based mechanisms. The
first way is procurement of reserves by the transmission system operator
(TSO) on a seasonal and annual basis. The Norwegian TSO, Statnett, has
organized a reserves auction where both the supply and demand side can
participate. The successful bidders are obliged to make their capacity
available for reserve purposes instead of bidding it in the spot market.
The standby price that was paid for these reserves was between 30 and
50% of the estimated annual cost of the cheapest alternative, increasing
capacity in existing hydro plants. With this market the TSO has
succeeded in contracting reducible loads from paper mills and smelting
plants. The challenge of including domestic load and smaller industry as
regulation objects is discussed in this paper. The other alternative
described is to procure reserves directly in the spot market. In this
case the reserve price will be the implicit result of the market
participants' energy bids and offers

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