MSc Thesis Presentation: Model-Based Insights Into Changing of the Market Time Unit. Impacts on Power Imbalances and Reserve Requirements in the Nordic Power System

Variable renewable energy sources (VREs) have seen rapid expansion due to the need to reduce greenhouse gas emissions from the energy sector, growing electricity demand, and their increasing cost-competitiveness compared to conventional generation. However, VRE such as wind and solar PV power are inherently weather-dependent, resulting in a variable and uncertain power output. Electricity demand is likewise subject to forecasting uncertainty, driven by stochastic consumer behaviour and weather-related effects. Power systems must maintain continuous balance between electricity generation and consumption, making power systems with high shares of integrated VREs more challenging to balance. In response to this challenge, the Nordic electricity market recently transitioned from a 1-hour to a 15-minute market time unit (MTU), with the expectation that shorter MTUs would incentivise market participants to contribute more to continuous system balancing. The objective of this thesis is to use model-based simulations to study how this change impacts power imbalances in the Nordic synchronous system and the resulting need for balancing services. To enable this, a dynamic Power Imbalance Model is developed to simulate high-resolution power imbalances at different MTUs, with a focus on behaviour relevant for operational conditions and balancing service requirements. The developed model is applied to compare the effects of 1-hour and 15-minute MTUs. The results indicate that shorter MTUs alter both the magnitude and temporal structure of power imbalances, leading to more frequent smaller imbalances but less imbalances of higher magnitude. Year-long simulation outcomes with 15-minute MTUs also indicate a reduced need for balancing services compared to 1-hour MTUs, under the assumption that imbalances are managed locally within each bidding zone. The proposed modelling framework and results provide insights that support the motivation of the recent market design change and are relevant for future studies of power systems.