Flexibility markets to procure system services. CoordiNet project

The article describes the objectives of the CoordiNet project, the proposed coordination schemes and architecture to allow TSOs and DSOs to procure systems services in a coordinated manner, and the platforms being developed in the three demonstrators of the project (Spain, Sweden, Greece).The efficiency and reliability of electricity systems depend, among other aspects, on an efficient collaboration between the different market participants, which require updating the roles of all agents involved. The CoordiNet project, co-funded by the EU, intends to demonstrate how TSOs and DSOs can act in a coordinated manner, to purchase and activate system services, promote the cooperation of all actors and eliminate barriers for the active participation of DERs in the market. The results of the project will help to design scalable tools and methodologies for system operators and third parties to safely connect, manage and coordinate flexibility providers. This paper describes the developments in CoordiNet to ensure the interoperability of the different markets and platforms developed by TSOs and DSOs across Europe.European Commissions' H2020 under grant agreement No 824414

TSO-DSO-Customer coordination for purchasing flexibility system services: Challenges and lessons learned from a demonstration in Sweden

This paper presents a real-word implementation of a TSO-DSO-customer coordination framework for the use of flexibility to support system operation. First, we describe the general requirements for TSO-DSO-customer coordination, including potential coordination schemes, actors and roles and the required architecture. Then, we particularise those general requirements for a real-world demonstration in Sweden, aiming to avoid congestions in the grid during the high-demand winter season. In the light of current congestion management rules and existing markets in Sweden, we describe an integration path to newly defined flexibility markets in support of new tools that we developed for this application. The results show that the use of flexibility can reduce the congestion costs while enhancing the secure operation of the system. Additionally, we discuss challenges and lessons learned from the demonstration, including the importance of the engagement between stakeholders, the role of availability remuneration, and the paramount importance of defining appropriate technical requirements and market timings.This work has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement nº 824414

Recommendations for customer engagement strategies

Customers are expected to play a fundamental role in the transition to a decarbonised and digitalised energy system. However, experience so far suggests that customer engagement in energy markets cannot be given for granted. This report investigates those barriers hindering customer engagement in flexibility markets and discusses strategies for their mitigation, aiming to unlock the untapped potential of the resources located at the customer’s premises and foster a more consumer-centric power system. Drawing from an extensive and multi-disciplinary literature review and benefiting from interactions with OneNet cluster demonstrators, this research identifies economic, behavioural, legal, and technical barriers to customer engagement in flexibility markets. Tailored recommendations are provided to surmount each of these barriers, advocating, among other things, for value stacking support, targeted awareness campaigns, regulatory adaptations, and robust infrastructure enhancements

Fostering Residential Demand Response through Dynamic Pricing Schemes: A Behavioural Review of Smart Grid Pilots in Europe

Many smart grid projects make use of dynamic pricing schemes aimed to motivate consumers to shift and/or decrease energy use. Based upon existing literature and analyses of current smart grid projects, this survey paper presents key lessons on how to encourage households to adjust energy end use by means of dynamic tariffs. The paper identifies four key hypotheses related to fostering demand response through dynamic tariff schemes and examines whether these hypotheses can be accepted or rejected based on a review of published findings from a range of European pilot projects. We conclude that dynamic pricing schemes have the power to adjust energy consumption behavior within households. In order to work effectively, the dynamic tariff should be simple to understand for the end users, with timely notifications of price changes, a considerable effect on their energy bill and, if the tariff is more complex, the burden for the consumer could be eased by introducing automated control. Although sometimes the mere introduction of a dynamic tariff has proven to be effective, often the success of the pricing scheme depends also on other factors influencing the behavior of end users. An important condition to make dynamic tariffs work is that the end users should be engaged with them

Capacity-Based Grid Fees for Residential Customers

In general, residential customers pay for every unit of energy (kWh) consumed. This tariff includes a component for energy and a component for using the grid. The latter represents the costs for network operation. Yet, this system is not suited for rising levels of self-generation of energy. Lower off-take will lead to a redistribution of grid costs. A possible solution might be a grid tariff based on load in kW instead of energy off-take. Such tariffs exist, but are not used for residential customers. In this paper, it is analyzed whether these existing tariffs are suited for high shares of self-generation. Results indicate that a load-based tariff is a reasonable solution. Yet, if storage is considered, a combination of a fixed component, an energy component and a load component offer better results.status: accepte

Impact of storage efficiency and charging costs on storage profitability in the electricity market

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Levelised Cost of Storage – Novel Metrics

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Levelized Cost of Storage - Introducing Novel Metrics

© 2017 Elsevier B.V. The increasing share of variable renewable generation capacity leads to a growing interest in electricity storage technologies and a summarizing cost metric to analyze the economic viability of such electricity storage units. For conventional generation technologies, the levelized cost of electricity (LCOE) is a well-known metric. In the context of electricity storage however, such LCOE-like metrics are only limitedly applicable as the finite energy storage capacity can limit the charge and discharge scheduling decisions of the storage operator. In addition, the “fuel”, i.e., charged electricity, and “generated electricity”, i.e., discharged electricity, is one and the same commodity which provides the opportunity to use an adapted levelized cost metric. This work analyzes three different levelized cost metrics and their application to electricity storage units used for electric energy arbitrage. The strengths and shortcomings of these storage cost metrics are analyzed in order to determine how they can be applied correctly. This analysis results in the following recommendations. First, it is recommended to use a levelized cost metric in combination with an analysis of a representative price profile upon which the storage operator will act. This allows a more accurate estimation of the number of charging and discharging hours and the associated charging cost and discharging revenue, given the energy storage capacity constraints of the storage unit. Second, when a number of different representative price profiles, hence with different charging costs, is available, it is recommended to use a cost metric which is independent of the charging cost as this single metric can be compared to each price profile, thereby facilitating the interpretation of the results. The results and conclusions from this work provide a framework on how to use levelized cost metrics in the context of electricity storage. Such metrics may help policy makers and investors in prioritizing energy storage investment decisions.status: publishe

Short-term Consumer Benefits of Dynamic Pricing

Consumer benefits of dynamic pricing depend on a variety of factors. Consumer characteristics and climatic circumstances widely differ, which forces a regional comparison. This paper presents a general overview of demand response programs and focuses on the short-term benefits of dynamic pricing for an average Flemish residential consumer. It reaches a methodology to develop a cost reflective dynamic pricing program and to estimate short-term bill savings. Participating in a dynamic pricing program saves an average consumer 2.32 percent of his initial bill. While this result seems insufficient to justify implementation, it contains only a small proportion of a series of dynamic pricing benefits.status: publishe