Short-term flexibility in power consumption - quantifying, stimulation and valuation

Denmark has now over a number of years participated in the Nordic power market, NordPool, and this collaboration has until now been successful, the exchange being capable of handling the balance of demand and supply at the market place. Nevertheless, there is an increasing concern related to the price inelacticity of power consumption, implying that in cases with a deficit of power supplied, very high power prices at the power exchange are needed to equalise demand and supply. Thus, it is important in the future power market to increase flexibility, especially the consumer price elasticity, implying a more efficient utilisation of the power supply system and expectedly an improvement in security of power supply. Thus, the main objective of this project is to analyse the flexibility at the Nordic power market, especially addressing technological and policy options for increasing the short-term price elasticity of power. The project consists of four major work tasks: 1) To investigate the technological possibilities for increasing flexibility in power consumption; 2) To analyse the policy options available to increase the flexibility and to describe the consequences for short-term power consumption of utilising these; 3) To describe and quantify the short-term price elasticity in the existing Nordic power system and to evaluate methodological and theoretical problems related to short term changes in power consumption; 4) To evaluate the value of increased flexibility in power consumption among other issues in relation to increased security of supply and reduced possibilities to utilise market power