Production and consumption in the electricity market ultimately come down to physics; ensuring that the electricity has the correct frequency and quality. When the power system is in balance, the frequency is correct, and the system functions as it should.
This is essential for everything connected to it to work. Everything that uses or produces electricity affects the balance. We must ensure that every single device that uses electricity has a corresponding production elsewhere. This maintains the correct frequency.
Common Rules and Safety Mechanisms Prevent Imbalances
In the worst case, an imbalance can lead to a collapse of the entire or parts of the power grid, causing us to lose electricity. In 2006, an imbalance and fault occurred in Europe, and many millions lost power.
Major faults can still happen. In January 2021, several lines went out, but quick coordination between countries helped prevent significant impacts. Cooperation and coordination during such events are crucial for you and me to continue having electricity in our outlets.
Throughout the power system, many safety mechanisms are in place to prevent such outages and prevent them from spreading to other countries. Common operating rules largely aim to avoid such power outages and faults. This cooperation takes place in NordReg and ACER.
Electricity Markets Are an Important Tool for Maintaining Balance
In Norway, Statnett is responsible for coordinating the operation of the power grid. They have several tools to maintain balance in the power system. The most important tool is the electricity markets. There, production and consumption are planned to achieve balance. Additionally, they must consider a large number of constraints on various cables and equipment. Lines, transformer stations, and power plants also have a tolerance that must be continuously monitored.
The Green Transition May Lead to Greater Instability
In the transition to a renewable society, fossil power production will be replaced by solar and wind power. This makes the system more weather-dependent. Large power plants, such as hydro, gas, and nuclear power, contribute stability to the power system. Solar and wind power production will vary with weather conditions and therefore do not have the same stability. This makes the system more vulnerable to faults that can challenge the balance.