Flexibility as a valuable good

The ability to increase or reduce the production of power plants or the consumption of demand processes is a valuable good in today’s energy markets. And the importance of flexibility will continue to rise.

This assumption is based on the fact that the total demand for electricity will increase, as energy-intensive processes to produce heat or mechanical energy increasingly use electricity instead of fossil fuels. This could lead to stronger demand peaks. In addition, the volume of less predictable generation becomes larger due to the increasing share of weather-dependent renewable sources like wind and solar.

With the help of untapped flexibility potentials, we are able to meet this challenge. Fluctuations of supply and demand could be compensated by ramping the production of power plants up or down (generation flexibility). A second option is the control of load (demand response or demand side management) by temporarily reducing or increasing the demand of consumers such as industrial plants or households. Further options for flexibility are in the field of storage: Pumped hydro plants, batteries or flywheels offer the possibility of storing energy in limited amounts.

After the liberalization of the energy markets in Europe, many markets developed reserve markets, where flexibility can be offered. Traditionally, flexibility services are offered by large generators. In Italy, the Dispatch Market (MSD) and Balancing Market (MB) are currently still limited to the participation of so-called enabled units (unità abilitata), usually conventional power plants.

However, an opening of the MSD Market to aggregations of distributed assets is expected for 2017. This could uncover large untapped potentials of both upward and downward flexibility in demand response and distributed generation. Both consumers and producers are often not aware of the flexibility they have. To find out how your processes can be put at work in the energy markets, have a look at the products and services of Centrali Next.

duck curve

The Californian duck curve

The Californian duck curve was released by California’s grid operator CAISO within a report on how the growth of solar power was going to change the state’s energy balance over the coming years. It visualizes forcefully the challenges for the electricity as a result of renewable energy generation. The duck curve shows a deep midday drop in net load, driven by lots of solar flooding onto the grid, and a steep ramp-up starting in the late afternoon, as solar fades out just in time for people to come home from work and start using a lot of electricity. This shows that the grid is not ideally used. When demand is lowest, the grid is used far beneath its maximum capacity. At time of peak demand, it is stressed to its limits.