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How do players in the power system currently perceive flexibility options and what opportunities would more flexibility unlock?
Dispatchable and renewable power generators
Highly variable prices reduce the utilization rate of my dispatchable assets reducing revenues. Additionally, my renewable assets lower power prices, when they are producing.
Power prices will have a higher “floor” as cheaper energy is used in flexible use cases, generating higher returns for renewable assets, while periods of undersupply become the key value driver of my dispatchable generation assets.
Regulators prevent more flexible uptake forms (eg, increase demand when sun shines) in current contracting forms.
Industrial players donot have the asset base (eg,hybrid boilers) for more flexible uptake of excess renewable production.
Battery storage operators have insufficient capacity installed to uptake the excess renewable production.
The player’s current perspective on flexibility
Dispatchable and renewable power generators
What issue the player perceives in increasing flexibility
The opportunity flexibility would unlock
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This information summarizes quotations from discussions, conferences, interviews, and news articles collected between November 2022 and August 2023. It was not drawn from a survey or representative sample and is not verbatim quotes; each statement paraphrases various similar quotations from different speakers. The quotations have been categorized by the authors depending on whether they addressed the speaker’s current perspective on flexibility; their view of the issues that prevent flexibility from increasing; or the opportunity that increased flexibility would unlock. The authors have attempted to be as transparent as possible when providing the views of the different actors in the value chain.
Source: Conference quotes; interviews; news articles
Distribution system operators and transmission system operators
Unused grid capacity is available many moments during the day, while the grid is formally congested during peak times.
The player’s current perspective on flexibility
Distribution system operators (DSO) and transmission system operators (TSO)
Regulators are preventing more flexible uptake forms, which force me to sell contracts for more capacity on the grid than actually in use, with corresponding grid expansion. Regulators prevent me from taking a more guiding role of locating batteries and other flex options to solve congestion locally.
What issue the player perceives in increasing flexibility
Higher utilization of existing grids will generate additional income, enabling investments and expansion for elements where additional capacity is needed. More options of locally handling peaks in supply / demand, creating use cases for when electrons in oversupply.
The opportunity flexibility would unlock
Government and regulators
Industry needs to decarbonize whilst remaining competitive vs other geographies to keep jobs whilst decarbonizing, which will include more renewable generation. Costs for consumers / households should not become unaffordable and feed-in tariffs for household solar should feel fair to consumers.
The player’s current perspective on flexibility
Government and regulators
Industrial players are not electrifying quickly enough whilst they need to decarbonize their business.
TSOs and DSOs need to expand their network more quickly to allow batteries and industrial use cases to connect.
Renewable generators do not expand capacity quickly enough.
Dispatchable power capacity is decreasing, potentially jeopardizing security of supply.
What issue the player perceives in increasing flexibility
Industry can utilize electricity when available, moving away from fossil-based heating. The grid can move away from uniform “copper plate” pricing, reducing the costs overall. Consumers can sell more solar at attractive prices, reducing need for high, flat, feed-in tariffs.
The opportunity flexibility would unlock
Flexible storage
operators
Low and negative market prices help my business case as I buy power at a lower cost. Current short durations of storage and high investment costs force me to maximize cycles, rather than optimize for maximum spread.
The player’s current perspective on flexibility
Flexible storage operators
Regulators are preventing more flexible uptake forms (eg, charging from a peak load during periods of lower prices).
TSO and DSOs do not reward me enough for decongesting the grid.
What issue the player perceives in increasing flexibility
New connection types will enable charging / discharging based on variability in demand and supply while reducing connection costs (eg, allowing peak loads instead of only baseload charging).
The opportunity flexibility would unlock
Utility services
providers
My CHPs are not in the money anymore and my gas fired boilers have become expensive, electrification of heat and thermal storage look like an attractive value proposition. Cost and availability of grid connection expansion make the case more difficult.
The player’s current perspective on flexibility
Utility services providers
Regulators, through the contracting setup do now allow a business case of more flexible uptake, where I could add thermal storage to my CHP and absorb excess electrons.
What issue the player perceives in increasing flexibility
Attractive new opportunities in energy arbitrage would be available, through new technologies (eg, Thermal Energy Storage) and hybridization, based on existing and new connections and contracts.
The opportunity flexibility would unlock
Industrial
off-takers
The low-cost electricity is a cost-effective way to decarbonize heating using off-the-shelf technology (steam and hot oil) or potentially produce green hydrogen. The TSO connection fees are currently a prohibitive hurdle.
The player’s current perspective on flexibility
Industrial offtakers
TSOs, DSOs, and regulators do not incentivize investments in e-boiler or electrolyzers where its uptake of power is more beneficial to stabilizing the system (eg, at landing of offshore wind).
What issue the player perceives in increasing flexibility
Electrification of industry, enabled by location-based or opportunistic contracting could increase demand where and when desired; flexibility will mean higher stability of prices whilst simultaneously help industrial offtakers to decarbonize.
The opportunity flexibility would unlock