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Options for Increasing Power System Flexibility

The availability of flexible balancing solutions (generation capabilities, load management and energy storage) in power systems is an important facilitating factor for the integration of wind power. Even though power system balancing is not new, wind power provides new challenges at high penetration levels, since its variable nature requires additional flexibility in the power system - the capability to adequately respond to fast and significant net system load variations.

By increasing the flexibility of the power system, its ability to integrate variable output generation can be enhanced. In a more flexible system (for example systems with large amounts of hydro or gas powered electricity), the effort required to reach a certain wind energy penetration level can be lower than in a less flexible system (for example systems with a high share of nuclear power). In a system that covers a larger geographical area, a larger amount of flexibility sources are usually available. The differences in the size of power systems, dispatching principles and system flexibility explain the differences in integration costs in different countries. For example, Denmark has a high level of flexibility as it is well interconnected, thus enabling a high penetration level without significant additional costs. Portugal is another example of a flexible power system enabling easy and low-cost wind power integration, due to the large amount of fast responding, reversible hydro power plants in the system.

A serious consideration in the planning to integrate substantial amounts of wind power is the provision (flexibility sources) for additional flexibility needs in the system, compared to a situation without wind power. In the assessment of the required additional flexibility, a distinction has to be made in the different market timescales (hour/day ahead).

The main sources for additional flexibility are:

  • Fast markets (markets with short gate closure);
  • Flexible generation (i.e. gas and hydro);
  • Demand side management (DSM);
  • Energy storage; and
  • Interconnection.


There is considerable diversity in European power market rules, but day-ahead markets exist in most countries. The day-ahead forecast error for wind has been significantly reduced in recent years, due to improved weather forecast models, but the error is still higher than for intraday forecasts. In the interest of wind power integration, gate closure times should be reduced, in order to minimise forecasting uncertainty, and in this way reduce last-minute balancing adjustments. Organising markets throughout Europe to operate faster and on shorter gate closure times (typically 3 hours ahead) would favour the economic integration of wind power.

A recent study (Milligan and Kirby, 2008), based on the situation in the state of Minnesota in the US, calculates the savings in balance power that could be achieved by balancing areas and assuming the presence of an energy market with a five-minute re-dispatch. In the hourly timescale, balance area consolidation reduces ramp requirements of balancing plants by 10 per cent, while in the five-minute timescale this reduction is double - more than 20 per cent.  This has considerable cost effects on the balancing costs, and thus on the integration of wind power.


Existing balancing solutions involve mostly conventional generation units: hydropower, pumped hydro and thermal units. Hydropower is commonly regarded as a very fast way of reducing the power imbalance, due to its fast ramp-up and ramp-down rates. It also has a marginal cost, close to zero, making it a very competitive solution. Pumped hydro accumulation storage (PAC, see below) also allows energy storage, making it possible to buy cheap electricity during low-load hours and to sell it when demand and prices are higher.

Of course, thermal units are also commonly used for power system balancing (primary control and secondary control). In the category of thermal generation, gas fired units are often considered to be most flexible, allowing rapid production adjustments. There is also potential in making existing power plants more flexible.


There is increasing interest in both large-scale storage implemented at transmission level, and smaller scale dedicated storage embedded in distribution networks. The range of storage technologies is potentially wide. For large-scale storage, PAC is the most common and best known technology. PAC can also be set up underground.

Another large-scale technology option is compressed air energy storage (CAES). On a decentralised scale, storage options include:

  • Flywheels;
  • Batteries (lead acid and advanced), possibly in combination with electric vehicles;
  • Fuel cells (including regenerative fuel cells, ‘redox systems’);
  • Electrolysis (for example hydrogen for powering engine-generators or fuel cells);
  • Super-capacitors.

An attractive solution would be the installation of heat boilers at selected combined heat and power locations (CHP), in order to increase the operational flexibility of these units.

Storage involves a loss of energy. If a country does not have favourable geographical conditions for hydro reservoirs, storage is not the first solution to look at due to the poor economics at moderate wind power penetration levels (up to 20 per cent). In certain cases, it can have an adverse effect on system operation with respect to CO2 emissions (Ummels et al. 2008). In fact, the use of storage to balance variations at wind plant level is neither necessary nor economically viable.


With demand-side management (DSM), loads are controlled to respond to power imbalances by reducing or increasing power demand. Part of the demand can be time shifted (for example, heating or cooling) or simply switched off or on according to price signals. This enables a new balance between generation and consumption, without the need to adjust generation levels.

Today, the adjustment of generation levels is more common than DSM. The availability of this solution depends on load management possibilities (for example, in industrial processes, such as steel treatment) and the financial benefits offered by flexible load contracts (cost of power cuts and power increases versus lower bills). Attractive demand-side solutions in combination with decentralised storage are:

  • Heat pumps combined with heat boilers (at domestic or district level);
  • Cooling machines combined with cold storage;and
  • Plug-in electric vehicles.

Each of these solutions permits the separation of the time of consumption of electricity from the use of the appliance, by means of storage.


Available interconnection capacity for exchange of power between countries is a significant source of flexibility in a power system. However, the capacity should be technically as well as commercially available. Data on available interconnection capacities are published at


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