Sav­ing elec­tric­i­ty gen­er­a­tion costs and reliev­ing the strain on elec­tric­i­ty grids with decen­tral­ized flexibilities

Build­ing new plants and mak­ing the pow­er grid more flex­i­ble: these are the two devel­op­ments that are dri­ving the expan­sion of renew­able ener­gies. Sce­nario cal­cu­la­tions show that decen­tral­ized, flex­i­ble tech­ni­cal gen­er­a­tors and con­sumers of renew­able ener­gies — espe­cial­ly heat pumps and elec­tric vehi­cles — can reduce the annu­al cost of elec­tric­i­ty gen­er­a­tion by up to one bil­lion euros. In 2020, the tech­ni­cal flex­i­bil­i­ty poten­tial of decen­tral­ized pro­duc­ers and con­sumers was still around ten ter­awatt hours (TWh). This was just under two per­cent of elec­tric­i­ty con­sump­tion (558 TWh). By 2050, the amount of elec­tric­i­ty that can be flex­i­bi­lized may increase twen­ty-fold to about 220 TWh (info­graph­ic).

How­ev­er, the frame­work con­di­tions must be changed for this to hap­pen. A research team from the Öko-Insti­tut has devel­oped these and sum­ma­rized them in a pol­i­cy brief.

The cur­rent frame­work conditions
In today’s legal frame­work for con­ges­tion man­age­ment (the so-called Redis­patch 2.0), grid oper­a­tors can only access pow­er gen­er­a­tors that have at least 100 kilo­watts of capac­i­ty, as stip­u­lat­ed in Sec­tion 13a of the Elec­tric­i­ty and Gas Sup­ply Act (EnWG). Elec­tric­i­ty con­sumers, on the oth­er hand, are not used today to elim­i­nate grid bot­tle­necks. They can only use their flex­i­bil­i­ty to pro­vide bal­anc­ing pow­er if they meet the require­ment of using at least five megawatts of capac­i­ty (Sec­tion 13i (2) Sen­tence 4 EnWG). A per­for­mance that small con­sumers, such as heat pumps or elec­tric vehi­cles, do not achieve.

Clar­i­fy sec­tion 14a in the EnWG
Sec­tion 14a of the EnWG takes a first step toward con­trol­ling decen­tral­ized con­sump­tion sys­tems. A net­work oper­a­tor may offer a reduced net­work charge to con­sumer oper­a­tors based on this para­graph. In return, the lat­ter grants him the con­trol of a con­sump­tion device. The exact form of this agree­ment between con­sumers and net­work oper­a­tors and the amount of the net­work fee reduc­tion have not yet been defined. A con­crete for­mu­la­tion in an ordi­nance reg­u­lat­ing these points is still pend­ing. This should be devel­oped in a dia­logue between rel­e­vant stake­hold­ers and then imple­ment­ed by policymakers.

Match­ing flex­i­bil­i­ty sup­ply and demand
In order for dis­trib­uted con­sumers and gen­er­a­tors to con­tribute to the grid, mech­a­nisms are need­ed to match the sup­ply and demand for flex­i­bil­i­ty. Dif­fer­ent pro­ce­dures are con­ceiv­able here: They can be flex­i­bil­i­ty mar­kets, for exam­ple. In these mar­kets, con­sumers and pro­duc­ers offer their flex­i­bil­i­ty. Grid oper­a­tors ask for them there and use them in a grid-serv­ing man­ner. Flex­i­bil­i­ty mar­kets have already been devel­oped and test­ed in the SINTEG projects of the Fed­er­al Min­istry for Eco­nom­ic Affairs and Ener­gy. This was also the case in the Enera project, in which the Öko-Insti­tut played a key role in the areas of sce­nar­ios, mod­el­ing and roadmap.
Mech­a­nism design must be dis­cussed and decided
In addi­tion to flex­i­bil­i­ty mar­kets, oth­er instru­ments are also con­ceiv­able. These may include con­trac­tu­al agree­ments between net­work oper­a­tors and indi­vid­ual providers.
Time-vari­able net­work charges are also being dis­cussed. These are based on the net­work load and are high dur­ing peri­ods of crit­i­cal con­di­tions. Con­sumers will be able to adjust their con­sump­tion accord­ing­ly and take pre­ven­tive action against net­work bottlenecks.
Which mech­a­nisms are ulti­mate­ly used must be nego­ti­at­ed in a dia­log between net­work oper­a­tors, flex­i­bil­i­ty providers, the reg­u­la­to­ry author­i­ty and polit­i­cal decision-makers.