• Fayaz Ahmed

Flexibility Services and The Future of Power Grid

Updated: Nov 24, 2020

If you have the ability to increase or reduce the production of your power generation sources or the consumption of your demand loads then you have a valuable good which is very valuable in today's energy markets and many expect that it will become even more so in the future.

As penetration of intermittent renewables increases in the system, and more and more energy use is getting electrified (for example because of e-mobility and electric heat pumps for heating) the electricity system becomes more decentralised and interactive. The need for flexibility services is getting more important to distribution grid operators to help manage the operations of grid efficiently.

Flexibility services can help energy networks operators to monitor energy flows and create market signals to motivate changes in energy supply and demand, integrating smart meters, smart appliances, renewable energy resources and energy efficient resources accordingly.

As ways to procure, manage, and market new forms of flexibility increase, entrepreneurs, and energy companies are developing new business models and coming up with a range of products to advance the market.

  • Circuit breakers

  • Energy control platforms

  • Batteries

  • Aggregations

  • Virtual power plants

  • Non-wires alternatives

  • Building electrification

Some examples of Products and Business Models for Monetizing Flexibility Services:

  • · TESLA Autobidder: Recently, it was all over the news that Tesla has received permission from the government of the UK to act as electric Utility in the country. Tesla plans to develop virtual power plants in the UK and in other countries using its ‘Autobidder’ real-time trading and control platform, which aggregates distributed energy resources and works to balance demand and supply in the power grid.

  • Piclo is the largest marketplace for flexibility providers in the UK having lion’s share of the UK market, currently with over 300 flexibility providers on their marketplace, including flexible aggregators such as Kiwi Power and Open Energi, and standalone independent power producers (IPP).

  • Similar to Piclo Leap is also a marketplace for flexibility providers having a majority share of flexibility providers in the California area, which they have procured via strategic partnerships with Googles’ Nest Smart Thermostats (procuring residential HVAC) and also Axiom Exergy, procuring commercial refrigerator flexibility.

  • EATON and Sunverge: Eaton and Sunverge have jointly announced a product combining Eaton circuit breaker energy management capability and Sunverge intelligent energy management platform giving utilities the ability to manage 80 percent of household load without relying on smart appliances.

  • Sunrun and SCE: Sunrun residential solar power provider has recently announced that it is working with mega utility Southern California Edison (SCE) to launch a virtual power plant comprised of residential energy storage systems of Sunrun to balance demand and supply in the power grid.

  • Centrica and Sonnen Residential VPP: Centrica plc and sonnen, Inc. have recently announced the creation of a residential virtual power plant (VPP) with an installation of 100 sonnen batteries. Sonnen batteries would be connected to Centrica’s FlexPond, a cloud-based technology that aggregates the batteries into a VPP. National Grid (UK) has already approved the VPP to provide dynamic firm frequency response.

  • Kaluza Residential Flexibility Program Finally, OVO-owned technology provider Kaluza announced it has become the first residential flexibility platform to provide a paid service to a UK distribution network operator

Benefits of Flexibility Services:

  • Flexibility as a boost for electrification: As consumers start getting some value (i.e. revenue, energy savings or backup power) by offering their home’s energy assets for grid use. Then, consumers would be more inclined to push for the use of electricity in their homes compared to other fuels, boosting society’s move toward increased electrification, accelerating decarbonisation of our energy system.

  • Flexibility as a way to integrate more variable renewable generation: To support a clean, resilient, affordable grid, markets must evolve to value flexible resources -- the key to reducing integration costs for variable resources. Two recent reports from America’s Power Plan (APP) outline how markets can evolve in the short- and long-term to cost-effectively integrate ever higher amounts of variable renewable generation like wind and solar.

  • Flexibility as an alternative to investment in the transmission grid: The flexibility resources also act as non-wires alternatives — they allow the utility to forego building new substations or laying cable, a less expensive approach that lowers customer costs, according to UK Power Networks (UKPN).







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