Future trading with regulating power

Sammanfattning: Regulating power is needed to compensate for unplanned deviations from production and consumption plans. The transmission system operator (TSO) in each country is responsible for keeping the electric system balanced, and activates regulation if needed to keep the frequency in the network stable. The need for regulations is assumed to grow if wind power is implemented in the power system, as it is difficult to forecast wind power production and make accurate production plans. This report investigates how trade with regulating power is affected by a large-scale installation of wind power in the Swedish electricity power system. The report explains how energy and regulating power is traded today in the Nordic interconnected power system. By using data on wind power prognosis errors from the West Danish power system, the report predicts the need for regulating power in the Swedish system with 4000 MW of wind power installed. A model is used to foresee pricing on regulating power in Sweden based on the need for regulating power along with other aspects. The results show that the regulating power market energy turnover increases along with the monetary turnover following the installation of a large amount of wind power. Bottlenecks have a large impact on the energy system and trade today and increase the need for regulations.