Øyvind Vessia, Ørsted: "Renewable energy sources are intermittent, but not unpredictable. The future of balancing requires physics, trust, and cross-border cooperation"

17.10.2025

Balancing Europe’s Energy System: Regulatory Challenges and New Principles for RES Integration

On October 9th in Vienna, during the Energy Club forum “Balancing Europe’s Energy System: Challenges, Solutions, and Prospects,” Øyvind Vessia, Director of Regulatory Affairs at Ørsted—a global leader in offshore wind energy—spoke at the second panel discussion, “The Future of Balancing: Digitalization, Flexibility Markets, and Consumer Integration.”

In his speech, he analyzed how regulatory policy affects the efficiency of integrating offshore wind farms into Transmission System Operator (TSO) grids, the development of hybrid projects, and the implementation of Battery Energy Storage Systems (BESS) to provide Black Start services.

Three Key Principles of the New Energy Reality

At the beginning of his speech, Øyvind Vessia outlined three fundamental ideas that, he said, define Ørsted’s approach and the broader European energy sector’s approach to system balancing: “First, renewable energy sources are intermittent, but they are not unpredictable. This is a very important distinction. Second, physics matters. When we design markets, we must ensure that more physics is represented in the incentives we provide to operators. And third, as system complexity grows, we increasingly face trade-offs. Sometimes, by achieving some goals, we make it harder to achieve others.”

He emphasized that simple, win-win solutions in the field of balancing no longer exist—instead, there is a growing need for flexible models that combine technological, market, and regulatory tools.

Ørsted’s Transformation: From Oil and Gas to a Global Leader in Offshore Wind

Next, Øyvind Vessia briefly introduced Ørsted, a company that today symbolizes the energy transition. “When I joined the company 10 years ago, it wasn’t called Ørsted, but Dong Energy—Danish Oil and Natural Gas. That speaks for itself,” he noted.

In 2007, 93% of the company’s profits came from oil, gas, and coal-fired power plants. However, in less than 20 years, Ørsted has undergone a profound transformation—completely phasing out coal, reducing its carbon footprint, and increasing its renewable generation capacity from less than 1 GW to 18 GW, with another 8 GW under construction.

The speaker noted that this transformation was made possible by the forward-thinking policy of the Danish government, which created an effective framework for the development of wind energy, as well as by regulatory stability that ensured profitability for companies in the renewable energy sector.

Market Reaction to Weather: The German Example

Citing recent data from Germany, Øyvind Vessia showed that markets are already demonstrating adaptability even in difficult weather conditions: “We often say that we need flexible generation and demand response—and that is certainly true. But we are already seeing that renewable capacity is responding to market prices. This shows that the market is working.”

According to him, generation curtailment, although undesirable, demonstrates that RES are already integrated to the point where they independently react to market price signals. This confirms the system’s ability to function even when demand is fully met by renewable sources.

The Danish Experience: Interconnectors, Trust, and Future Challenges

The expert elaborated on the example of Denmark, which today gets 86% of its electricity from renewable sources, mainly from onshore and offshore wind farms. However, he stressed that such a high share of RES was only possible thanks to powerful interconnectors with Norway, Sweden, Germany, and the United Kingdom.

“It is the interconnection and trust between countries that allow us to ensure the security of supply. This is not just a technical issue, but also a political one—cross-border cooperation is crucial,” emphasized Øyvind Vessia.

However, future forecasts indicate significant changes: while Denmark is currently close to 100% self-sufficiency, by 2045 this figure could drop to 20%. “We will become much more dependent on our neighbors for security of supply. And this again highlights the importance of trust, market integration, and joint planning,” the speaker noted.

The 2045 Scenario: Critical Duration and the Role of Interconnections

Demonstrating a simulation for 2045, Øyvind Vessia drew attention to the increasing critical duration of events when generation deficits will occur—from the current 4 hours to 20 hours in the future: “This means that periods of windless days or lack of sun will require more active use of imports. That is why the capacity of cross-border connections is extremely important.”

Transforming the Energy Balance: From Oil to Wind

The expert showed models of Denmark’s energy flows between 2020 and 2030, which reflect a profound transformation: “In 2020, oil had a significant share, especially in transport. But by 2030, its share drops sharply, while electricity production from wind doubles.” This transformation, he said, not only changes the energy sources but also creates new opportunities for flexibility and integration.

Balancing Markets: New Rules of the Game

“Balancing markets have undergone radical changes in the last 10 years,” emphasized Øyvind Vessia.

Among the key reforms:

• Reserves are divided into upward and downward flows;
• Renewable generators have been given the opportunity to participate in balancing;
• RES producers have been made responsible for their own balancing, which encourages forecasting accuracy;
• 15-minute settlement intervals have been introduced within the balancing period;
• Flow-based market models have emerged, allowing the system to be optimized as a whole, rather than at the border level.

These changes, he said, have made the markets more flexible and closer to the physical realities of the system, but challenges remain.

New Challenges Ahead: Grids, Consumers, Tariffs

“We have not yet made sufficient progress in grid infrastructure. We need to invest more in grid development and also develop cross-border risk hedging mechanisms,” concluded Øyvind Vessia.

He noted that consumer pricing often still does not reflect the real cost of electricity at different times of the day: “Many consumers charge their electric vehicles at home without even seeing the daily price. This shows that we need to move towards truly smart metering and transparent tariffs.”

Conclusion: The Future of Balancing is Trust, Integration, and Physics

Øyvind Vessia’s speech was a deep analysis of how regulation, the market, and technology must evolve in response to the rapid changes in the energy sector. His main message is that the market works when it takes into account physics, flexibility, and the human factor of trust. Without this, the effective integration of renewable energy is impossible—not in Denmark, not in Europe, and not in Ukraine.