Report on Energinet’s purchase of reserves in the electricity system

In a recent report, Danish Utility Regulator has analysed the competition and described the roles and competences of the various stakeholders in the development of the market for electricity reserves. The market participants play an important role in the market development, which is becoming increasingly internationalised both at Nordic and EU level

Energinet is responsible for monitoring and maintaining the level of electricity security of supply. The level of security of supply is determined by the Minister for Energy, Utilities and Climate. Energinet thus is responsible for planning the operation of the electricity system in order to manage the most critical failures without loss of power at consumer level. Energinet purchases reserves in order for the system to revert swiftly to a safe operation after a major mistake.

According to the report, Energinet’s expenses to reserves (reserve capacity and reserve energy) have been at some 67 million € to 107 million € annually. The annual expenses for reserve capacity constitutes approximately 80 percent of this amount.

The market for capacity reserves and energy reserves is part of the so-called balancing market. The EU Agency for the Cooperation of Energy Regulators (ACER) estimates that the social welfare benefits of an integration of balancing markets constitutes approximately 1.2 billion € annually, most of this yet to be obtained.

Read a summary in English of the report and the entire report (in Danish) here on the page.

Contact:

Torben Hvidsten, telephone 4171 5360; tohv@forsyningstilsynet.dk