FLEXIBILITYFlexibility at the intersection of markets and grids

Tara Esterl

AIT Austrian Institute of Technology GmbH

Giefinggasse 6 | 1210 Vienna | Austria

M +43 664 8157810 | tara.esterl@ait.ac.at

www.ait.ac.at Webinar „Austrian Energy Day“, 24th September 2020

MOTIVATION

225.09.2020

TSO

DSOs

Large, small & medium

industrial customers

policy goal: zero CO2 generation

by 2040

electrification leads to untapped flexibility

potential located in DSO grid

missing coordination

& cooperation

enhancement of

operational planning

growing shares of

variable generation

motivation of consumers

TSO: Transmission System Operator

DSO: Distribution System Operator

need for (aggregated)

flexibility

Prosumer/

Flexible consumers

definition of flexibility

products for DSO

need for optimization &

automation

Suppliers

AGENDA

Flexibility & Markets

• Motivation of customers

• Overview Flex+

• Economic benefits

01

Flexibility & Grids

• Simulation results

• Regulatory framework

02

TSO-DSO Interaction

03

• Research projects

• Overview InteGrid

• Conclusion

Knowledge about „flexibility networks“

• 68% have not heard about flexibility networks (n=847)

• 77% are (perhaps) interested in participation (n=877)

Motivation, influence of participation & desire

• To do something meaningful (73%) (n=678)

• Less costs (82%) (n=733) and more regional RES (80%) (n=717),

Grid is relieved (67%) (n=723)

• Only 34% fear loss of comfort (n=678)

• No restrictions to own usage (86%) and stop interaction (83%) (n=625)

• Transparent documentation and technology data (90%) (n=~622)

• Either not switch supplier: 95% are neutral or (very) happy (n=853)

MOTIVATION OF CONSUMERS

425/09/2020More information: Esterl et al. (2020) „Eigeninteressen der Prosumer und dynamische Interaktionsmöglichkeiten zwischen Aggregator und Prosumer“,

https://jimdo-storage.global.ssl.fastly.net/file/cf71b379-cf7b-4aae-843a-d0878b5331c5/Eigeninteressen_der_Prosumer.pdf; Lead research partner questionnaires:

Photo credit pixabay

E-Cars (min.20)

E-Car-Pool

PARTICIPATION OF FLEXIBILITY ON

SHORT-TERM ELECTRICITY MARKETS

Local

Cloud

Battery Storages (min.10)

Battery-Pool

E-Boilers (min.30)

Boiler-Pool

Smart Home

Optim

satio

n,

Fore

cast

Heat Pumps (min.30)

Heat-Pump-Pool

Flexibility Forecast and Optimisation

525/09/2020

Spot- and

Balancing Markets Energy Supplier Balancing Service

Provider

Selling Flexibility on Short-Term Markets

Flex+ Platform

Data Assignment, Aggregation and Activation

SIMULATION RESULTS HEAT PUMP POOL

625/09/2020

82

84

86

88

90

92

94

96

98

100

102

reference da srl trl

Co

sts

in

pe

rce

nt[%

]

Scenario

Total electricity costs

0

20

40

60

80

100

120

reference da srl trl

Co

sts

in

pe

rce

nt[%

]

Scenario

Day-ahead costs

80

85

90

95

100

105

reference da srl trl

Co

sts

in

pe

rce

nt[%

]

Scenario

Grid costs

1670

1680

1690

1700

1710

1720

1730

1740

1750

1760

reference da srl trl

Co

nsu

mp

tio

n[k

Wh

]

Scenario

Additional el. consumption

reference da aFRR mFRR reference da aFRR mFRR reference da aFRR mFRR reference da aFRR mFRR

→ Up to 65 € per heat pump per year, similar range for other flexible components

→ Up to 12% reduction of total electricity costs with up to 3% increase in electricity consumption

→ Biggest contributing factor to cost reduction are the reduced grid costs

More information: Hemm et al. (2020) „Beschreibung der Algorithmen und Bewertung der Skalierbarkeit“, https://jimdo-storage.global.ssl.fastly.net/file/95c959f9-

fe62-4fff-b7f6-833e194dc6b8/Algorithmen_und_Bewertung_der_Skalierbarkeit.pdf; Lead research partner heat pump pool optimisation:

Overview simulations

• Simulation of ~10.000 Austrian distribution grids

• Every household and agricultural customer has one e-car

• Scenarios:

i. Simultaneity of charging: 20% (normal operation) and

50% (market-based operation) with higher simultanity

ii. Charging power per car: 3,6 / 11 / 22 kW

iii. With and without grid-friendly active power control

Key results

1. Higher simultaneity leads to higher reinforcement demand

in the distribution grids

2. Grid-friendly measures like active power control can

significantly reduce the grid reinforcement

INFLUENCE MARKET-BASED FLEX-

OPERATION ON DISTRIBUTION GRIDS

725/09/2020More information: Kathan et al. (2019) „Final Report – leafs Integration of Loads and Electric Storage Systems into advanced Flexibility

Schemes for LV Networks”, https://www.energieforschung.at/assets/project/final-report/leafs-eb-final.pdf; lead research partner grid simulations

1

1

2

2

Flexibility for the distribution grid

1. Grid connection requirements for generators/demand

(e.g. active power control and peak shaving)

2. Procurement of flexibility

• Evaluation of regulators [1]: Market-based or than

perhaps administrative/mandatory measures

• Mandatory curtailment for fixed level of

compensation can lead to gaming [2]

Selected relevant design parameters (to be specified) [3][4]

825/09/2020

OVERVIEW REGULATORY FRAMEWORK (SELECTION)

Clean Energy Package (Directive 2019/944): Member States shall provide

the necessary regulatory framework to allow and provide incentives to

distribution system operators to procure flexibility services, including

congestion management in their areas, in order to improve efficiencies in

the operation and development of the distribution system. […] Distribution

system operators shall procure such services in accordance with

transparent, non-discriminatory and market-based procedures unless

the regulatory authorities have established that the procurement of such

services is not economically efficient or that such procurement would lead

to severe market distortions or to higher congestion.

Options

Technology

neutrality

Long-term procurement Better to plan for grid operators

Short-term procurement Easier for flexible load and renewable energies to participate

Product

standardisation

Standardised products High liquidity, possibility to choose from merit order

Non-standardised products Special incentives (e.g. for super fast resources or resources in effective location in the grid)

Locational

tagging

Location-based The more local the more effective

(Dynamic) zones or postal The larger the area, the more competition

[1] CEER (2020) „CEER paper on DSO Procedures of Procurement of Flexibility“, https://www.ceer.eu/documents/104400/-/-/f65ef568-dd7b-4f8c-d182-b04fc1656e58

[2] Nouicer et al. (2020) „The economics of explicit demand-side flexibility in the distribution grid”, https://cadmus.eui.eu/bitstream/handle/1814/67762/RSCAS%202020_45.pdf?sequence=1&isAllowed=y

[3] Based on webinar of Florence School of Regulation “Flexibility in electricity markets and networks”; https://fsr.eui.eu/event/enabling-flexibility-in-electricity-markets-and-networks/

[4] Additional, interesting paper as basis for webinar: Schittekatte and Meeus (2020) „Flexibility markets: Q&A with project pioneers”, https://doi.org/10.1016/j.jup.2020.101017

Spot markets (standard)

• Data exchange between TSOs, DSOs and generators/demand

(SO GL Articles 40 – 53)

• Influenced by grid connection requirements

Balancing markets (special)

• Prequalification:

• Contract with DSOs necessary for all units

• Model contract at Oesterreichs Energie

Regulation for high volume of small flexibilities needs to be defined

• Bidding and activation:

• Flexibility in grids with the possibility for grid problems not allowed

Regulation for TSO-DSO interaction still needs to be defined for AT

925/09/2020

OVERVIEW REGULATORY FRAMEWORK (SELECTION)

Electricity balancing guideline (EB GL): System Operation Guideline

(ENTSO-E), Article 182, Paragraph 5, Article 5: Each reserve connecting

DSO and each intermediate DSO shall have the right, in cooperation with

the TSO, to set, before the activation of reserves, temporary limits to

the delivery of active power reserves located in its distribution system.

The respective TSOs shall agree with their reserve connecting DSOs and

intermediate DSOs on the applicable procedures

System Operation Guideline (ENTSO-E), Article 182, Paragraph 5,

Article 4: During the prequalification of a reserve providing unit or group

connected to its distribution system, each reserve connecting DSO and

each intermediate DSO, in cooperation with the TSO, shall have the

right to set limits to or exclude the delivery of active power reserves

located in its distribution system, based on technical reasons such as

the geographical location of the reserve providing units and reserve

providing groups.

Preventive solutions

• Fixed power limitation or limited participation in the balancing

energy market by fixed maximum value per unit

• Feed-in management (P (U) or Q (U)) as well as load management

• Distribution of balancing energy activation to different grid areas

by virtual power plants regardless of the network status

Continous coordination

• Simplified coordination possible if there is only one virtual power plant

operating in a distribution grid section (more interesting for simulation)

• Continous coordination between VPP-DSO-TSO

• Distribution of the activation signal by DSOs

• Common marketplace for flexibility

• Comparison of 4 different TSO-DSO schemes in 4 different

countries

• Constant coordination near real-time between distribution system

operator, aggregator and transmission system operator

TSO-DSO INTERACTION

1025/09/2020

Selected projects

Virtual Power Plants (VPPs) in Integrid‘s view

• Technical VPP (TVPP): Flexibilities exclusively for the DSO

No need for the Traffic Light System

• Commercial VPP (CVPP): Flexibilities for the TSO and other agents

• Increasing need of ancillary services for the TSO, in particular

balancing reserve and redispatch through CVPP (offering

aggregated DER)

• Coordination between grids and markets necessary

Need for the Traffic Light System

Traffic Light System Solution (TLS)

• Technical validation of flexibility products in MV & LV grids in

order not to create potential violations at the distribution side

• Test of traffic light system in Slovenia and Portugal

TSO-DSO INTERACTION VIA

TRAFFIC LIGHT SYSTEM (TLS)

1125/09/2020

Need for coordination

TSO

VPPDSO

1. TLS Input/Output overview

2. TLS operates in day-ahead & intraday

OVERVIEW TRAFFIC LIGHT SYSTEM

1225/09/2020

TLS + other tools

Grid Topology (DSO)

Load/RES forecast (DSO)

Flexibility offers (CVPP)

DSO• Activatable flexibility per bus

• Units: MW

• Granularity: hour

• Traffic light per bus

• Red: No flex can be activated

• Yellow: Flex needs to be

curtailed

• Green: Flex can be fully

activated

• Report sent to

• CVPP

• DSO

Flexibility Report

SIMPLIFIED TLS PROCESSES

1325/09/2020

Day-ahead Intraday

Procedure

• In day-ahead, the evaluation is performed hourly for the 24h of

the next day (before gate closure time of the balancing

markets)

• In intraday, the evaluation is made upon request in real time

(after an mFRR activation by the TSO) and for the next hour

14

TIMELINE TRAFFIC LIGHT SYSTEM

Possible enhancements of InteGrid concept

• Potential extension to other markets as for example

secondary balancing control (aFRR) and

redispatch/congestion management

• Periodical intraday evaluation (-> evaluation not after

activation -> reduction of response time)

TSO-DSO interaction is necessary

• Market integration of flexibility is ongoing

• Market-operated flexibility has a high impact on the

distribution grids

• Functioning concept for full TSO-DSO interaction is

still work in progress

Traffic light system is good starting point

• Enables indirect coordination between TSO and DSOs

via the VPP

• TLS deployment eases pre-qualification for the

flexible units in constraint areas

→ TLS enables more available flexibility

• Deployment interesting for already constraint areas or

foreseen constraint areas

CONCLUSIONS

1525/09/2020

Relevant open issues for TSO-DSO interaction

• Implementation for all markets and definition of

interaction between technical and commercial VPP

• Challenge implementation of interaction for redispatch

• Harmonization and standardization of ICT

architecture, requirement and interfaces

• Regulatory implementation:

• Current EU Regulation needs to be defined and

implemented on national level

• ~2022: input for new regulation on European level

FLEXIBILITY AT THE INTERSECTION OF MARKETS AND GRIDSThe Austrian Case

Tara Esterl

AIT Austrian Institute of Technology GmbH

Giefinggasse 6 | 1210 Vienna | Austria

M +43 664 8157810 | tara.esterl@ait.ac.at

www.ait.ac.at Webinar „Austrian Energy Day“, 24th September 2020