The main equilibrium control issue associated with increasing the proportion of wind power in the electricity system becomes apparent when revisiting the characteristics of electricity production by means of wind turbines. The power plant operator can only turn down electricity generation; it cannot be increased without an increase in wind speed, which has to be kept below a specified maximum. And still, a wind turbine only works within a specific wind speed spectrum. At average wind speeds, which are the most common and hardest to forecast, electricity generation is exponentially related to wind speed, which implies that relatively small changes in wind speed will lead to relatively large changes in electricity production. Considering these specific characteristics of electricity production by means of wind turbines, it becomes apparent that an increase in wind power generation requires additional resources for the maintenance of equilibrium in the electricity system. When compared with a general characterization of situations in which control becomes increasingly important, it becomes apparent that wind power pushes all the buttons:
Control is required when a match between actual and intended performance cannot be reliably maintained. Typically because requirements change or cannot be designed-in. For example, performance might change over time due to changing inputs or outputs; it might involve processes which disproportionately amplify small differences in inputs; it might require optimization or fine- tuning in use; or performance may be too complicated to predict ex ante. In these instances, control systems monitor, compare and modify the inputs and parameters of various subcomponents in a coordinated way to ensure that the system behaves as intended
[Italics in original] (Dorf & Bishop in Nightingale et al., 2003, p. 484) Increasing the proportion of electricity produced by wind turbines thus conflicts with the supply follows demand philosophy by augmenting the above-mentioned problems associated with wind power production. As a larger part of electricity production becomes bound to the wind, the provision of the resources for maintaining equilibrium in the system becomes increasingly expensive and wasteful. One way to solve the control problem would be to reverse the mode of electricity system operation, and have consumption follow production by implementing a centrally run “demand follows supply” concept (Schweppe et al.,
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1980). By creating a frequency control system with the capacity to regulate consumption for various purposes and taking it to the extreme, equilibrium in the electricity system could be maintained by starting and interrupting the use of electricity in different instances. All power plants could by means of such an approach be run in the most efficient manner, and the system would be resilient to short-term and long-term contingencies. Such an approach would in turn present new challenges for the consumers, who would have to adapt their routines and general modes of consumption.
The current approach to frequency control in the Danish electricity system does not prescribe that supply only follows demand or vice versa. Since electricity was liberalized in Denmark, the principal method guiding frequency control has involved trying to encompass both these seemingly opposed approaches. Approaching the control problem from both sides in Denmark implies an effort to facilitate the mutual adjustment of generation and consumption by means of homeostatic control (Schweppe et al., 1987). From the perspective of the system operator, the general argument is that:
…Homeostatic Utility Control can offer a set of advantages of both ‘supply follows demand’ and ‘demand follows supply’ while avoiding the majority of their major pitfalls. It offers a continuous accommodation of the utility and the customer to achieve stability and to minimize costs through a price-guided process…
(Schweppe et al., 1980, p. 1152) Homeostatic control implies operating the electricity system by means of an electricity market. And this in turn points to the central focus of the present inquiry. This study is about the work involved in using and enabling homeostatic control to solve the intermittency problem, as described by providing three particular empirical accounts. The three examples show how electricity markets have been introduced, changed and represented in the effort to integrate fluctuating electricity production from wind turbines into the Danish electricity system. In other words, the analysis documents three attempts to strengthen and expand the means by which homeostatic control can be exerted. Doing so implies following different efforts to change the material and conceptual infrastructure by which the Danish electricity market habitually operates the electricity system and maintains equilibrium. Doing so enables two new understandings of the
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performation of markets. One is made by taking into consideration the impact on market design and management made by control systems engineering in various formats. The other presents a new conception of the role of economics in market construction by demonstrating how in the context of Nord Pool, the discipline supplies measures describing the objectives applied in engineering markets for control.
In the context of electricity system control, adopting the biological notion of homeostasis implies that the equilibrium of the electricity system is displaced (Callon, 1986b) into the equilibrium of the electricity market. That is to say that the equilibrium between input and output in the electricity system resulting in the achievement of a stable system frequency was converted and inscribed into the equilibrium between supply and demand in Nord Pool, resulting in the generation of a price. Doing so involves having asking prices and bids for specific amounts of electricity at given points in time stand in and communicate on behalf of all the elements involved in production and consumption. To make the operation clear and enable an understanding of the role of control systems engineering in this first example of wind power integration by means of market construction, price-setting in Nord Pool will be discussed. Initially, emphasis is placed on how the idea of controlling power systems with price signals (e.g. Alvarado, 2005) has been implemented and actualized in Denmark. In other words, the issue is how price has come to function as a new control signal associated with the implementation of homeostatic control. For it is by demonstrating how price-setting in Nord Pool works that it becomes possible to understand how the equilibrium of the electricity system is displaced into the equilibrium of the electricity market in a way that implies that “price reflects physics” (Møller, 2006, p. 12) in Nord Pool.