This post was written by Executive Director and co-founder of Smarter Grid Solutions, Alan Gooding.
I had the pleasure of attending the Internet of Energy event in Berlin last week. The event was attended by ~100 professionals from TSOs, DSOs and technology vendors all looking for insight into how the electricity system is likely to change in the coming decades and what opportunities and risks that will bring. For me it was an opportunity to re-engage with the European scene and take stock on how far it has developed; here are a few observations.
VPPs and aggregation 2.0 is on its way. Many countries now have mature Virtual Power Plants (VPPs) operating with highly competitive markets amongst aggregators. However, the vast majority are operated relatively simply addressing a small number of revenue streams such as frequency reserve markets. The trend is undoubtedly towards additional markets and revenue streams opening up as regulation moves forward to support wider market integration. That means VPPs will be doing more wholesale trading, additional flexibility services, operating to shorter windows and more stacking for revenues.
My problem with the Internet of Energy. It is an easy analogy to make that routing electrons from one place to another is similar to routing a packet of data from one place to another. It is not, electrons flow to the point of least resistance rather than where you want to send them and you can’t queue them as they are consumed or generated. Yet much of the conversation around the internet of energy forgets that the physics are different and the analogy only goes so far.
Different flexibility platforms. That took the conversation at the event into a differentiation of flexibility platforms; ones that are integrated to the grid and ones that aren’t. One panellist correctly observed that one of the most critical aspects of the integrated flexibility platform is managing hosting capacity with flexible grid connections. Concepts such as the traffic light approach map directly on to this; green means that DER participants can operate freely to capture whatever revenues they wish, amber means grid capacity may be limited thereby limiting customer trading and encouraging network validated flexibility services; and finally red means that the physical grid cannot allow customers to operate as they wish and emergency control is required. This is the concept of an integrated flexibility platform that SGS align to.
Who has the data? A number of participants cited the need for all data to be open for markets to operate. Unfortunately, in a world where data privacy is so important, it is highly unlikely that data will simply be made available. While many are comfortable sharing their data with Facebook or Google in order to receive a service they value, there are few that are minded to share their energy data.
The killer app. So what is the ‘killer app’ for the grid that encourages us all to provide controlled access to our energy data. We heard from one European utility where 93% of customers buying PV are also buying a residential battery, but reported initial excitement followed by cost saving expectations not being met. For me it comes to an easy to adopt solution that allows us to ‘go green’, predictably reduce costs and want to invest in new heating and transport solutions.