Flexibility Market Research at Haugaland Kraft

Data science FOU

In this article we will give an overview of the Utsira Market Flexibility project covering the following topics:

– Brief introduction to current challenges faced by the power industry

– What is a flexible power system and how can it contribute to solving these challenges?

– Flexibility market, value and pricing

– Haugaland Kraft flexibility research and development on the Utsira island

– The role of data science in the Utsira project


The power industry is witnessing dramatic shifts with regards to production, transmission and consumption of energy. The demand side is growing due to electrification of transport and increased activities in the residential sector. In parallel changes in the energy production mix where there is an increased share of renewable resources in the low voltage grid, such as solar and wind production. These resources are good for the environment, but they are less predictable than conventional power production sources like for example hydro.

The increase on the demand side due to accelerating electrification combined with the unpredictability on the production side, makes the electricity system operators face unprecedented levels of voltage variations and grid congestion. Traditionally this is solved by investing in upgrading the grid’s capacity to withstand these variations. This solution entails high capital fixed and operational costs. However, with the recent developments in information and communication technologies, which are empowered by smart meters (AMS), the costs can be reduced. The solution is to create a flexible power system where the source of this flexibility is the customer.

Flexible system

In system design, flexibility can be defined  as the ability of a system to respond to potential internal or external threats  in a timely and cost-effective manner in such a way that it continues to function within quality standards.

In the Norwegian electricity context, these standards are set by FOL (forskrift for leveringskvalitet i kraftsystemet). Increasing the lifespan of equipment in the grid and ensuring power delivery at all times are also important factors.  

Flexibility in a power system can be defined as the ability to activate power modification at a defined time for a defined duration at a specific location. This modification is activated when there is a mismatch between the load ( demand side) and production ( supply side).

The mismatch can happen in two cases:

To do this power modification, there has to be access to controllable assets that can facilitate the process of enhancing the generation or load side. Examples of these assets are:

A flexible customer is a customer who owns controllable assets and is able to provide flexibility service upon agreement. A new term worth to be mentioned is «Prosumer» who is someone both producing and consuming energy that for example; in case of someone connected to the grid, consumes electricity and also feeds electricity back to the grid through solar panels.

Flexibility market 

The buying and selling of flexibility will happen in a digital marketplace. The prosumers will offer bids containing when and how much flexibility their assets can provide. On the other side, grid system operators will make requests for needed flexibility.

Very few prosumers will be able to provide enough flexibility on their own. The flexibility market will only work if groups of prosumers can group together in a specific area and provide aggregated loads of flexibility. There’s a potential for an aggregator who collects all prosumers’ available flexibility and trades it on behalf of them.

flexibility market design

Flexibility Value 

The economic value of flexibility is more significant for grid operators than for aggregators and prosumers.  For grid operators the opportunity cost of not exploiting flexibility would be to invest in new assets to control the voltage.

From a society perspective the costs would be ramping the production of power plants up or down.

By taking advantage of power flexibility, these costs can be reduced, which in the end will lead to cheaper electricity costs for the consumers.

Flexibility pricing 

The pricing of flexibility is under research, however, since value can be a base for pricing, it can for example be as follows:

In case of overproduction: Maximum price is the electricity price for curtailing wind or solar production, or alternatively, the costs of investing in grid enhancements to tackle the peak voltage.

In case of overconsumption: Maximum price is the cost of investing in grid enhancements and infrastructure.


HK research and development in Utsira Island 

Utsira is the smallest municipality of Norway. The island municipality is located  about 18 kilometres west of the town of Haugesund in the western coast of Norway.  The Island is inhabited by 193 people.

Currently the island has two windmills for generating energy, and installation of solar panels is on the way. The island is connected to the national grid with a sea cable that connects Utsira with Karmøy.

At Utsira the high voltage problem is a bit particular. High voltage challenges at Utsira requires that the local production from windmills exceeds the demand for electricity on the island. It’s therefore important to identify when the windmills at Utsira produce more than the predicted load. When this is the case, combined with high local solar production, it’s expected to give local challenges with high voltage.

In the case where there is no production from the windmills, Utsira has a large capacity for solar power without reaching the voltage limit of 253V. The capacity then equals at least the local demand.

The role of Data science in Utsira project

Haugaland Kraft is carrying out a research project on the Utsira island in order to investigate and implement flexibility market mechanisms. The current scope is:

Sherif AhmedKristian Finborud
Data Scientist
Tidligere Prosjektingeniør