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Denmark has the highest proportion of wind power in the world. Wind power provided a world record of 39.1% of the total annual Danish electricity consumption in 2014 with as much as 51.7% in Western Denmark. Many would argue that the present power markets are not designed for such high shares of wind power production and that it would be hard to get good and stable prices. However, analyses in this chapter show that the Nordic power market works, extreme events have been few, and the current infrastructure and market organization has been able to handle the amount of wind power installed so far. It is found that geographical bidding areas for the wholesale electricity market reflect external transmission constraints caused by wind power. The analyses in this chapter use hourly data from West Denmark—which has the highest share of wind energy in Denmark and which is a separate price area at the Nordic power exchange. Data have been collected from the last ten years and periods with extreme wind conditions are used as case studies to illustrate the robustness of our findings.

What differentiates the structure of Nord Pool from other power exchanges around the world is the way the balance from the spot market is maintained until the actual, physical delivery takes place, via the regulating power market in Norway. This paper reveals the pattern of the prices on the regulating power market, by analysing the cost of being unable to fulfil the commitments made on the spot market. Some power producers with unpredictable fluctuations (e.g. wind) will need to buy regulation services. The disclosed pattern implies that these producers must pay a limited premium of readiness in addition to the spot price; this premium is independent of the amount of regulation. The level of the premium of readiness for down-regulation is shown to be strongly influenced by the level of the spot price. On the other hand, it is demonstrated that the premium for up-regulation is less correlated to the spot price. Furthermore, it is found that the amount of regulation affects the price of regulating power for up-regulation more strongly than it does for down-regulation. The disclosed cost of using the regulating power market is a quadratic function of the amount of regulation. This asymmetric cost may encourage bidders with fluctuating production to be more strategic in their way of bidding on the spot market. By using such strategies the extra costs (for example wind power) needed to counter unpredictable fluctuations may be limited.

Up till now, most analyses of the northern European electricity liberalisation have assumed that a perfect competitive electricity market can be obtained. It has not been taken into account that a number of imperfections will inevitably occur – at least during the transition period. These imperfections can be technical, economic or tradition-bound, and can also have political characteristics. It is important to recognise and incorporate the market imperfections in the liberalisation policy and analysis. Otherwise, the purposes of the liberalisation and other energy policy goals may not be achieved. The aim of this paper is to survey market imperfections and their influence on the liberalisation processes in northern Europe.

The present share of variable renewable energy (VRE) generation such as wind power and solar photo voltaic is relative high in many of the Nordic countries. E.g. wind power generated 42% of the annual electricity consumption in Denmark in 2015. The share of VRE is expected to increase in the years to come in order to reach the ambitious renewable energy deployment targets in the Nordic and Baltic countries. Transformation to an energy system increasingly based on VRE will escalate the requirement for flexible operation of the entireenergy system, including improved integration among energy sectors. District heating (DH) is an important sector in the Nordic energy system and has a large potential for increased flexible operation in relation to the future electricity system. This potential is only partly exploited today. One reason for this is the differences in regulatory framework conditions for DH compared to the electricity market, e.g. different energy taxes, which may hinder the potential benefits from systems integration and lower the realisable potentials.

Production of bioenergy in organic agriculture may be implemented in the future to reduce the reliance on non-renewable fossil fuels and minimize greenhouse gas (GHG) emissions. Therefore it is important to assess the potential effect this may have on soil quality and biological parameters. This project aims at designing and evaluate a combined concept for biomass and bio-energy production in OA, while considering soil bio-geo-chemical cycling of plant nutrients and biodiversity of the soil microbiota.

With expected future penetration of variable renewable energies (VREs) arises the question of how to optimize the utilization of large shares of cheap energy resources while providing sufficient flexibility. This study explores the benefits for Denmark of encouraging flexibility through energy systems coupling and the electrification of Danish district heating system, as compared to a strategy where Denmark mainly relies on its interconnections to balance the demand and supply. Using a partial equilibrium modelling tool representing the heat and electricity sector, the study compares the impacts of both scenarios at the horizon 2050, and assesses their distributional effects in terms of energy technology shift; electricity spot prices; system cost; electricity exchange balance and total CO2 emissions.

Sweden has set long-term energy policy targets which aim at eliminating net greenhouse gas (GHG) emissions by 2050 [1]. Since the production of power and district heating in Sweden is already close to be carbon neutral, a further reduction of GHG emissions have to be seeked in other sectors, for example the transport sector. By 2011, approximately 90% of the total fuel consumption in the transport sector stems from fossil fuels, accounting for around 45% of the GHG emissions in Sweden [1]. Therefore, the Swedish transport sector will have to face a major transformation in the next future, if the ambitious targets of a carbon neutral transport system by 2050 and of being independent from fossil fuels in the vehicle fleet by 2030 have to be achieved [1]. To meet the energypolicy targets, radical restructuring of the fuel use and vehicle stock in the transport sector is required. In this context, this paper develops two alternative scenarios for the transport sector by 2050 – an Electric Vehicles Scenario (EVS) which include a high percentage of electric vehicles and a BIOfuel Scenario (BIOS) with a high percentage of biofuels. The scenario results are compared to the Carbon Neutral Scenario (CNS), adopted from the Nordic Energy Technology Perspective (NETP) 2013 [2]. The alternative scenarios for the transport sector are developed by means of an energy system model which includes the power, heat and transport sectors, taking into account possible synergies among the sectors. The energy system model computes the socio-economic value of the total annual system cost which then allows for a comparative analysis between the investigated scenarios.