The general concept of this proposal is based on a real-time market approach that lets destributed energy resources and flexible electricity demand receive and respond to variable electricity prices. Soon after clearing the electricity price from the already well established day-ahead Elspot market is sent to the end-user. This price acts as a forecast of the real-time price and allows scheduling of assets that require advance planning.

Price signal updates
In the course of the day the price signal is updated in real-time, i.e. every five minutes, to reflect the need for up or down regulation due to an imbalance in the power system. If no imbalance exists the real-time price will be equal to the day-ahead Elspot price. Sending a price update every five minutes makes is possible to take advantage of flexible electricity demand and DER.

Market-based platform and ICT infrastructure
The concept provides a market-based platform and ICT infrastructure that extends the current electricity market to a shorter time horizon and to smaller assets. By letting DERs receive and respond to real-time prices it is ensured that DERs can be better utilized in the market and by using a simple and cost efficient market concept it is ensured that small-scale DERs can take part of the market. Both these factors therefore imply a large potential for improved system opreation by utilizing resources that would otherwise have been left unused.

The graph below illustrates the EcoGrid EU concept in the context of the current (Nordic) power markets and system operation.