Economic valuation of reserves on cross border interconnections; A Danish case study

Denmark avails the highest penetration of wind power in the world. Danish power system is subdivided into two asynchronous parts; western and eastern Danish power systems. With more than 35% wind penetration, western Danish power system has the merits to be considered as the pilot grid for many regions that plan for high penetration of intermittent renewables. Extreme intermittency in the nature of wind power imposes elevated risk levels to power system operation. This every day challenge of wind dominant power systems necessitate the crucial role of operating reserves. In this paper, we propose an optimization framework that minimizes the cost of reserve procurement. The framework decouples the share of upward and downward primary, secondary, and tertiary reserve services within DK1 (western Danish power system) and neighboring cross border resources (Norway and Germany). Results indicate the economic benefit of reserve provision provided by cross border interconnections. The focus here will be on reserve services from abundant hydropower resource in Norway, taking advantage of fast VSC-based HVDC interconnection that is expected to be commissioned in immediate coming years.