Flexibility Beyond the hype

Size: px

Start display at page:

Download "Flexibility Beyond the hype"

Benjamin Underwood
6 years ago
Views:

1 Flexibility Beyond the hype A practical approach towards 2025 Martijn Duvoort, Head of Section Market & Policy Development 1 11 June 2016 SAFER, SMARTER, GREENER

2 Global trends in energy, and the role of flexibility 2

3 DNV GL s Technology Outlook Technology trends creating a new power reality 3

4 Energy transition strengthened by socio-economic developments Energy transition Growth of renewables Electrification of our energy supply Socio-economy Decentralisation, next to Europeanisation Digitization Super computers that fit in the palm of your hand Access to the cloud Open data Source: Eurostat Social media, social trends Socially connected everywhere, anytime 4

5 GW wind) Residual load Netherlands -2030 (8 GW PV, 16 GW wind) 25000 25000 20000 20000 15000 15000

5 Projections show an increasing need for flexibility at multiple timescales Residual load Netherlands (0.7 GW PV, 2.5 GW wind) Residual load Netherlands (8 GW PV, 16 GW wind) Megawatt Megawatt Hour Hour Expected volatility at multiple timescales 5

6 Price incentives are to drive flexible technologies Fast controllable power generation (and/or curtailment of e.g. wind power) Demand response and an active participation of end-users Energy storage Increase interconnection capacity 6

7 Unlocking the value of flexibility 7

8 This flexibility is to be remunerated at ahead and balancing markets Wind uncertainty (RMS) Ahead markets Balancing provisions Month/week ahead Day ahead Hour ahead Day after OTC contracts Continuous forward market FRR reservation contracts Weekly FCR auction Day-ahead market Intraday Submission of E- programmes Gate closure Real-time Control signal/price Dispatch and (portfolio) balancing Imbalance price and settlement 8

9 Yet, today s market opportunities are dim with modest price volatility Ahead markets Balancing provisions 9

10 Flexibility is an heterogeneous product Energy consumers become flexibility providers, respond to market and regulatory incentives Physical constraints determining the boundaries of their product e.g. technology choice, amount and location Users of flexibility each have their own interests and needs BRP focuses on portfolio balancing within PTU (15 minutes) and within control area DSO needs power flow management and voltage control within specific area TSO is responsible for system balancing on time scales between 30 seconds and 15 minutes, and has to prevent congestion Source: USEF Aim is to design a standardised market solution for a heterogeneous product 10

locally available reserve power Market re-opened for TSO/DSO to place local R+ and R-bids upon need By

11 Locality in dual-sided balancing markets STEP 1 STEP 2 STEP 3 At market clearing: determine locally available reserve power (map the locality of all supply bids): Each TSO/DSO may check the amount of locally available reserve power Market re-opened for TSO/DSO to place local R+ and R-bids upon need By introducing a 2-step clearing approach, TSOs and DSOs can ensure sufficient local reserve capacity, which comes at a cost 11

12 How is value created from flexibility? Cooling Systems Emergency Generators Prosumer Production Process Heat Pump Solar Electric Vehicle FLEXIBILITY Aggregator The aggregator A new role, unlocking flexibility Airco System - 12

13 How is value created from flexibility? Cooling Systems Emergency Generators BRP Flex for Portfolio optimization Prosumer Production Process Heat Pump Solar FLEXIBILITY Aggregator UFLEX DSO Flex For grid management Electric Vehicle Airco System TSO Flex to maintain balance - 13

14 Practical example: making money today 14

Retail innovation goes beyond commodity pricing Electric mobility opens a new

15 With commodity prices declining; parties are eager to explore alternative earning models B2B sees multiple pricing strategies; B2C products price kwh Retail innovation goes beyond commodity pricing Electric mobility opens a new window of opportunities Collaboration between utility and automotive sector is essential 15

16 EV market just started, however growing so fast that it can contribute to the present primary and secondary control reserve EVs will be able to serve the entire German demand by 2025 By that time stationary storage (2 nd use of EV batteries) will begin to take over the market 16

17 Annual alternative use benefits [Unit of Measure: EUR] Discharging capability always provides additional value 348 Larger batteries yield more economic potential 17

18 What about battery degradation? Negligible if managed The ideal charging and discharging strategy will be key to maximizing returns while preserving battery capacity 18

19 The case for second use Depending on the battery pack s fitness for reuse, the residual value is positive Second use batteries will compete against new stationary storage appliances 19

20 New collaboration leads to new business opportunities??? Present infrastructure accommodates various ownership and/or control concepts 20

21 Next steps 21

Business starts today Conceptual progress Today s business improvements New market designs are essential to boost flexible innovations Both wholesale and retail-level models have been developed We

22 Business starts today Conceptual progress Today s business improvements New market designs are essential to boost flexible innovations Both wholesale and retail-level models have been developed We are ready to implement these concept both in live-pilots and real-gaming environments Already in today s markets, new flexible products are feasible DNV GL assists parties to end cave thinking and explore new product market combinations and partnerships (see EV case) DNV GL process and decision support services ensure agile response to opportunities 22

23 Thank you. Martijn Duvoort, Head of Section Market & Policy Development SAFER, SMARTER, GREENER 23

Universal Smart Energy Framework

Universal Smart Energy Framework Seminar Future Grid Lab: Introduction to Flexibility 09-10-2018 A solid foundation for smart energy futures - 1 The Energy Transition the need for flexibility Energy transition