Actors and business models for flexibility in distribution grids

Results:

 

Flexible resources in the power system
CINELDI's Knowledge base 

Flexible resources in the power system (WP5)

To enable large-scale utilization of flexible resources in the distribution grid, it is important to understand the incentives and challenges facing each actor in the distribution system: the DSO, power producers, flexibility aggregators and end-users. Business models and tariff structures are important means of incentivization, and these have been investigated so far in CINELDI.

In 2022, a new grid tariff structure was implemented in Norway, to incentivize the end users to reduce their peak load. In the years leading up to 2022, several works were published in CINELDI which related to tariff structure. A pilot project tested out a capacity-based tariff model, and concluded that it led to minor changes in the household consumers' electricity use [1]. A simulation study combining local peer-to-peer markets and the capacity tariff showed that both aggregated peak load and actors' costs decreased [2]. Reference [3] investigated cost-optimal operation of flexible assets based on capacity-based power grid tariff subscription to identify the optimal characteristics of the tariff structure for reducing the peak loads.

An important question is whether the grid tariff conflicts with price signals from the spot market. Four different grid tariff designs were compared in [6], using a computer model which represented demand response for minimizing the cost of electricity consumption during peak load periods. The method is applied to metered electricity demand from 3608 consumers in Oslo, Norway. Results show that new grid tariff designs reduce peak loads by 1-4% only, and that reduction in peak load is smaller when consumers are subject to electricity spot prices.

Solar prosuming is a phenomenon which has become important in countries such as Australia, Germany and the UK, and the potential in Norway was investigated in [4], considering the interplay between policymakers, grid companies and the prosumers themselves. The results indicated that if increasing solar prosuming activities is a political goal, it will require stronger financial incentives for individual prosumers and a deeper understanding of the interplay among actors.

To understand the DSOs' point of view, in-depth interviews were conducted in 2021 with seven different Norwegian DSOs regarding how they currently see and utilize flexible resources, and which aspects are important for utilizing flexibility: practical, technical, regulatory and other barriers [5]. A spin-off project from CINELDI, FlexOps, was started to implement flexible resources in a digital twin of the power system, in collaboration with Kongsberg Digital.

Selected publications from CINELDI:

  1. H. Sæle, “Household customers’ assessment to capacity based distribution grid tariff,” in 2020 17th International Conference on the European Energy Market (EEM), Sep. 2020, pp. 1–6. doi: 10.1109/EEM49802.2020.9221937.
  2. S. Bjarghov, M. Askeland, and S. Backe, “Peer-to-peer trading under subscribed capacity tariffs - an equilibrium approach,” in 2020 17th International Conference on the European Energy Market (EEM), Sep. 2020, pp. 1–6. doi: 10.1109/EEM49802.2020.9221966.
  3. S. Backe, G. Kara, and A. Tomasgard, “Comparing individual and coordinated demand response with dynamic and static power grid tariffs,” Energy, vol. 201, p. 117619, Jun. 2020, doi: 10.1016/j.energy.2020.117619.
  4. T. H. Jackson Inderberg, H. Sæle, H. Westskog, and T. Winther, “The dynamics of solar prosuming: Exploring interconnections between actor groups in Norway,” Energy Research & Social Science, vol. 70, p. 101816, Dec. 2020, doi: 10.1016/j.erss.2020.101816.
  5. K. W. Høiem, V. Mathiesen, I. B. Sperstad, and H. Sæle, “Mulighetsstudie – Bruk av fleksibilitetsressurser hos nettselskap,” Energi Norge / CINELDI, 2021. 
  6. S. Bjarghov and M. Hofmann, “Grid Tariffs for Peak Demand Reduction: Is there a Price Signal Conflict with Electricity Spot Prices?,“ 18th International Conference on the European Energy Market (EEM), 2022