The Danish Energy System in well known internationally for at least two rather significant aspects.
- Denmark’s power system features the largest penetration of wind power in the world – 39% of gross electricity consumption in 2014.
- District heating is the supply form for 62% of Danish households. In 2013, 73% the district heat supply came from co-generation and 61% thermal power generation was co-generated.
Energy in Denmark has undergone significant transformation since the oil crises in the late 1970s, going through processes of technical transformation as well as intense institutional and market reform.
Because of the concurrent changes to the market and regulatory framework with the development of wind and efficient cogeneration heating systems some of the mayor pitfalls in this technical combination have been avoided.
Both wind power production and combined heat and power production are practical approaches of promoting efficient use of resources. The Northern provinces in China, like Denmark, have both forms of generation in abundance. A challenge faced in many countries, China included, is that when the weather is cold and heating is required, CHP units will be ‘forced’ to generate electricity often coinciding with available wind, leaving dispatchers with the choice of cutting down on one or the other – most often the wind. The unfortunate tendency of having the most wind in the winter reinforces this problem.
In spite of the high levels of penetration, this form of curtailment very rarely occurs in Denmark because of flexible technologies, and markets, which signal stakeholders when to generate and when to hold back or even consume electricity.
The Danish success in avoiding wind power is mainly related to three main factors:
- Good technical flexibility in district heating supply
- The power market is designed to provide flexibility for combined heat and power plants
- The Danish district heating plants optimize their bidding into the power market to ensure lowest possible net-costs for the heat supply.
See more details about each measure by clicking on the links.
Main messages for China
The main messages for China from the Danish experiences are:
- The Danish thermal power plants are all combined heat and power production units (CHP plants). But the district heating systems also have back-up from heat-only-boilers (HOB) and heat storages. Both increase the flexibility for the CHP plants. Furthermore, the power plants are typically extraction units which possibility for a very flexible relationship between power and heat production. So technically, the Danish thermal power plants are able to operate flexibly and independent of the current need for heat supply if necessary.
- The Danish power market, an integrated part of the Nordic Power Market, has both a day-ahead market and an intraday market. And also the final adjustments between load and supply are carried out using a market for power reserves. This allows for a quick adaptation to changes in the wind power forecasting facilitated through dynamic price signals.
- The Danish CHP plant owners use the technical possibilities and the market set-up to ensure the lowest possible heat price, taking into account the income from power production. This means that the heat producers will choose between heat from the CHP plants if the power price is high enough, heat from heat storage of from HOB if the power price is low, or even choose to use electric boilers, if the power price is very low (or negative).
For me it is clear that the Danish mechanisms to avoid curtailment could be used successfully in China. The Chinese CHP plants are modern and could be operated flexibly; heat storages at the CHP plants are both feasible and low-cost solutions for decoupling the instant power and heat production, and with a proper power market design, the owners of the CHP plants could get strong incentives for flexibility and least-cost operation.
Of course such a system cannot be introduced overnight and transition schemes must be considered. This is among the research topics at China National Renewable Energy Centre where I work as Chief Modelling Expert. We have for the last couple of years prepared our modelling tools for showcasing the impact of such combination of measures on the RE integration and energy system transition for the whole of China and we will be able to present the results of such analyses in the coming year as a basis for decision making to support the Chinese energy system transition.
Lars Møllenbach Bregnbæk is Chief Modelling Expert at CNREC and Partner in Ea Energy Analyses