economic experiments in a laboratory rather than a platform setting. There is thus a shift in the analysis implying the inclusion of another significantly different empirical setting. In being followed in the wild, through a platform, and into laboratories, the efforts of renewable energy integration under inquiry are located increasingly far away from an implemented solution to the intermittency problem. The analysis thus moves from documenting actual full-scale changes in the transmission system, to experimental changes in a limited part of the distribution system, to the making of prerequisites for computer-based electricity market representations.
The chapter focuses on efforts to depict an ideal Nord Pool, and is dedicated to documenting the construction and implications of a widely used software programme for electricity market representation named the Baltic Model of Regional Electricity Liberalization (BALMOREL). While discussing the making of BALMOREL, the making of an essentially mandatory source for technology data for electricity market modeling is also described. Following the making of an effectively obligatory reference stipulating the qualities and costs of energy system components in the context of public energy planning projects implies tracing the construction of the Danish Energy Agency’s Technology Catalog. It is here pointed out how BALMOREL and the Technology Catalog are included in the efforts to solve the intermittency problem, through being used in the making of scenarios constituting the techno-economic inputs for building actualized energy
51
policy recommendations regarding the reconfiguration of Nord Pool (e.g. Danish Commission on Climate Change Policy, 2010). When Nord Pool was introduced as the means to reach objectives such as equilibrium maintenance, lower electricity prices, and investment in generation capacity, it was made to play a similar role in the laboratories of Danish energy planners. Here BALMOREL helps make scenarios stipulating the format of energy system operation and configuration Nord Pool should produce in the years to come, as related to a set of quantified political, technical, and economic circumstances and requirements. Technical circumstances are typically the costs and qualities associated with energy system components such as power plants at a given point in time. These qualities and costs are in turn described in the Technology Catalog, which functions as a form of a best available technology list. BALMOREL simulates a perfectly functioning Nord Pool by operating and composing a virtual electricity market through linear programming using the General Algebraic Modelling System (GAMS). And within this setting, emphasis is placed on the way linear programming has been conceived of and developed as a form of “higher order control” (Dantzig, 1957) for the optimization of production systems. The basic functioning of this higher order control system is then shown to have been coupled with a concept of demand in the form of responsive requirements for system output in order to simulate market dynamics.
It is then highlighted that linear programming is an established generic approach to running the basic merit-order dispatch of power plants in electricity markets (e.g. Hogan, Read, & Ring, 1996). Electricity market representation is thus here based on central parts of Nord Pool and BALMOREL being the same. Considering that Nord Pool does not work as intended (e.g. Danish Energy Association, 2013), the approach to reaching the objectives set out for the market has to some extent become one of representing what Nord Pool in principle should do in order to then help realize that state of affairs through the use of policy. And the solution to the intermittency problem is an inevitable part of what needs to be realized. Insights into electricity market representation are thus important for seeing how Nord Pool’s capacity for exerting control and solving the intermittency problem in the short and long run has been understood through and reinforced by means of a third kind of control system. Linear programming or higher order control is a central part of what informs various actors about how to most economically endow the electricity market with the capacity to integrate wind
52
power (e.g. Aarhus Municipality, 2012). And for the third time, a measure from economics is shown to have been included when mobilizing a form of control system in the attempt to integrate wind power into the Danish electricity system. The notion of producer and consumer surplus is highlighted as being used to describe the criteria for optimization introduced in the design and operation of BALMOREL.
Throughout the three cases of market performation and wind power integration, economics is shown to have provided a point of reference for market design and management by describing the state of the world in need of realization. The way this has worked, specifically, is here understood by considering how conditions of satisfaction (Searle, 2001) implied in economics as a representation of markets have been incorporated into the making of objectives of market construction when introducing or improving control system operation for electricity system equilibrium maintenance. The direction of fit and direction of causation (Ibid.) of economics as a representation of an empirical state of affairs are shown to have been reversed in the process.
Summary
While describing the motivation for the present inquiry as being grounded in concerns related to the problematic effects stemming from fossil fuel-based energy systems, a backdrop for the study was provided. A historical context for better understanding the subsequent description of the technical aspects of the intermittency problem was then provided. After noting how the liberalization of electricity in Denmark established the electricity market as the framework for operating and composing the Danish electricity system, an initial research question focusing on the introduction and reconfiguration of Nord Pool for wind power integration was presented: How has the introduction and reconfiguration of Nord Pool characterized the endeavor to integrate fluctuating electricity supply into the Danish electricity system? The making of the question and the approach to answering it were then discussed as involving a number of different components. Specifically, the empirical stance and maxim of pragmaticism were described as being actualized by means of a number of interrelated rules, techniques, and methods of research. Having clarified the position taken up in the inquiry, a body
53
of relevant concepts from the performativity programme of the new new economic sociology was then introduced. A conceptually informed research question explicitly focusing on the role of knowledge and expertise in the performation of Nord Pool for the integration of wind power in the electricity system was then formulated: How have control systems engineering and economics been mobilized in the endeavor to integrate wind power into the Danish electricity system through electricity market design and management? A short outline of the analysis addressing the issues implied in answering the research questions then demonstrated how the present study augments the performativity programme in two ways, in addition to producing insights into how the intermittency problem is being handled in Denmark. One way is to show how control systems engineering, being a form of expertise previously unstudied by the performativity programme, has played a crucial role in the making of a series of markets. The other is to show how economics, being a form of expertise studied extensively by the members of the performativity programme in other empirical settings, has had heretofore undescribed functions.
54
Homeostatic control │ Liquidity
Homeostasis is a biological term referring to the existence of a state of equilibrium…between the interdependent elements of an organism. It is appropriate to apply this concept to an electric power system in which the supply systems and demand systems work together to provide a natural state of continuous equilibrium to the benefit of both the utilities and their customers. A set of interrelated physical and economic forces maintains the balance between electric supply and customer load
(Schweppe et al., 1980, p. 1151)
…the objective is to make the electricity market liquid, so it will be able to incorporate the increasing amounts of electricity from renewable energy
[Author’s translation] (Energinet.dk, 2012a, p. 12)
To describe the particular way control systems engineering and economics have been mobilized as part of a process of market construction when integrating wind power into the Danish electricity system, we must first establish several facts. It is initially shown how the liberalization of electricity and Denmark’s entry into the Nordic wholesale electricity market implied introducing a new form of control device for maintaining the crucial equilibrium in the electricity system. Homeostatic utility control came to replace the overall supply follows demand approach to equating input and output, as the equilibrium of the electricity system was displaced into the equilibrium of the electricity market. Nord Pool is highlighted as being an engineered market conceived of, implemented as, and functioning as a control system. In this way, the empirical scope of the performativity programme is augmented by pointing to control systems engineering as a generative form of expertise in market design and maintenance. The chapter then unfolds how the introduction of Nord Pool in Denmark brought with it a specific way of understanding the intermittency problem and how it could be solved. Wind power integration became a matter of electricity valuation in terms of how low, zero, and negative prices paid for electricity generated by wind
55
turbines were to be avoided. We then see how ensuring the value of electricity generated by wind turbines was pursued by expanding the means by which homeostatic control can be exerted. In the present case, doing so implied increasing the liquidity of wholesale electricity. As an example of this wider and established approach known as the “export strategy” (H. Lund & Clark, 2002), the making of a new transmission system interconnector is described. By making an addition to the electricity grid, the ability to trade electricity produced by wind turbines was increased and the tendency to produce low, zero, or negative prices diminished. Increasing the liquidity of electricity generated in an area relatively rich in wind turbines meant that more resources for absorbing fluctuations in electricity generation became available. As a metric, liquidity was used to describe an objective or outcome to be reached by expanding the material infrastructure of Nord Pool and letting the market exert homeostatic control. The empirical scope of the performativity programme is in this way extended again, this time by noting how economics is included in market design and management by helping to describe an outcome to be realized by means of constructing a control system in the form of a market.
To clarify how the present form of wind power integration works, the wider Nord Pool arrangement will be introduced. The more general aspects of the Danish electricity market are described by following the conceptual components informing the engineering of a homeostatic control system and their actualization through the liberalization of electricity. Tracing the introduction and reconfiguration of Nord Pool as related to wind power integration here constitutes the first of three examples of how control systems engineering has been a generative form of expertise in market performation. Similarly, the present chapter provides the first of three examples of approaches to wind power integration where economics is shown to have supplied a measure used in conceiving of a state of the world to be actualized by market construction for the introduction or improvement of control system operation.