In a meadow near Lelystad there are two gigantic batteries that absorb the power surpluses and shortages of a nearby wind farm. The operator of those batteries, GIGA Storage, is paid by the local grid operator. The batteries actually reduce a grid operator problem: grid congestion, the threat of the electricity grid becoming clogged. The interim battery storage compensates for the outliers of the wind farm. When there is a lot of (and therefore cheaper) electricity, the batteries charge, when there is little (and therefore more expensive) electricity, the batteries feed back. In addition to the fee, GIGA Storage also earns from the more expensive resale of electricity.
Since November, GIGA Storage has been one congestion service provider (CSP). A CSP’s task is to absorb local power surpluses and shortages when a network operator expects that the electricity consumption somewhere will temporarily not match the supply. That role still had to be made official, which happened when the Netherlands Authority for Consumers and Markets (ACM) amended the network code (the regulations for network users) in November. Surpluses and shortages can be absorbed in various ways. For example, by making a gas or coal-fired power station run faster, by switching solar panels on or off, or by temporarily reducing electricity demand somewhere. Or you use a battery as backup storage, such as GIGA Storage.
Adjusting electricity production and consumption so as not to overload the grid is not new. Many companies that have had a CSP status since November have hardly changed their activities. The change mainly lies in making that status official, and a corresponding platform for CSPs on which the network operators post their network congestion problems. This makes it easier for CSPs to offer their flexible capacity in a targeted manner. TenneT, which manages the high-voltage grid, hopes to further expand this flexible capacity via CSPs in the near future.
Energy transition
Greater flexible capacity on the electricity grid is an important precondition for the energy transition. Electricity consumption will become “three to four times as large”, says Laurens de Vries, who obtained his PhD at TU Delft on the security of supply of the electricity grid. Moving away from fossil fuels often means switching to electricity: think of electric instead of petrol cars.
But what if the entire street charges its electric car on a cloudy, windless day? The capacity to transport that much electricity to the right sockets is currently not there. There is already no room for new grid connections in parts of the Netherlands, which makes it more difficult to build residential areas and solar fields, for example.
The grid managers invest heavily in strengthening the physical electricity grid, but that requires a lot of time, equipment and technical personnel. Moreover, all three are scarce, especially given the pace at which the government wants to continue the energy transition. And so the grid managers want to deal more tactically with the demand, supply and transport of electricity, for example through CSPs, in order to make maximum use of the space within the existing infrastructure. This also saves costs, which in the case of the network operators are paid from public money.
CSPs can offer their flexible capacity via a platform
Edmij, now also an official CSP, has been arranging the tactical timing of their customers’ electricity consumption and production for years. At first, Edmij only did this via large-scale consumption connections to the medium and high-voltage grid. There are now also pilots on the low-voltage grid, to which small consumers are connected. For example, customers can charge their electric cars via Edmij when there is relatively much and therefore cheap electricity available. Solar panels, wind turbines, the pumping stations of the Amsterdamse Waternet and the automated machines of sawdust producer Plosplan also switch on or off depending on the electricity supply and the associated price. Customers pay Edmij a fee for coordinating their consumption and generation, and save on their electricity bills themselves.
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Since their official CSP title, Edmij and GIGA Storage have noticed that they are receiving more attention and recognition from business partners, for example. However, both CSPs still encounter obstacles. GIGA Storage initially ran into electricity regulations. Since a battery absorbs and supplies electricity, GIGA Storage had to pay double energy tax. For large-scale batteries, this will be canceled in 2022. The transport costs still count double, but GIGA Storage avoids them by giving projects a pilot status. This gives room to “jointly look for the edge of regulations,” says CEO Ruud Nijs. For example, the grid operator concerned, which collects the transport costs, pays GIGA Storage an additional fee by way of compensation.
Keep energy system in balance
Edmij has another problem, says co-founder Jeffrey Bartels. Smart electricity meters, which have to register electricity consumption every quarter of an hour, do not always work accurately enough. That is a problem for Edmij’s revenue model. “If electricity is cheapest between three and four hours, and we specifically have an electric car charged then, it must be registered. If that does not happen, you will miss out on the revenue from charging during a low electricity price.” The grid operators expect to need “very high” flexible capacity to keep the energy system in balance, according to an exploratory report from 2021. TenneT therefore wants to hire more CSPs. Companies that can arrange their electricity consumption differently by appointment can receive compensation for this. That message does not seem to be getting through to potential parties for the time being. They had “hoped for more” from a tour last year, says operational director Maarten Abbenhuis. TenneT now wants to visit industry, trade associations and municipalities. “Perhaps there is a tomato grower somewhere who does not yet know that you can earn money from flexible power consumption,” says Emma van der Veen, who maintains contact with CSPs on behalf of TenneT.
CSPs must also meet certain quality requirements. After all, the agreed flexible capacity must be delivered. Interested tomato growers (and other (large) consumers) can in any case download the CSP application form. People with a gigantic battery in the backyard, by the way, too.
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