Solving infrastructural concerns through a market reorganization: A case study of a Danish smart grid demonstration

Abstract

Following the rapid growth of wind power in Denmark in the past 20 years, energy infrastructure has become increasingly politicized. Fluctuating renewables not only contest the dominant ‘logic’ of operating the system, namely ‘supply-follows-demand’, but it also introduces new actors like aggregators and reconfigures existing market actors. In this paper, we study a case, EcoGrid 2.0 on the Danish island Bornholm, as a case of a ‘marketized’ solution to the infrastructural concerns emerging from the large share of fluctuating wind power in the system. The market design involves transforming ‘flexible consumption’ into an exchangeable good, as well as a transformation of households into ‘distributed energy resources’, making it possible to capitalize on the existing infrastructure in new ways. We end the paper with a discussion of the implications for infrastructure; when households become balancing entities and a digital and smart infrastructure is made indispensable to the operation of the system, the infrastructure grows significantly in terms of scope and complexity eventually introducing yet new challenges.