Monetising flexibility as a fix for grid congestion

Flexibility markets are a vital tool in managing grid congestion and ensuring the stability of European grids, according to grid experts gathering at Enlit Europe.

Grid congestion has become a very pertinent issue in Europe as renewables come online at a faster pace. Placing too many Renewable Energy Sources (RES) onto the grid without backing or updating the infrastructure creates problems, as evidenced by the situation in the Netherlands, where cities have been experiencing recurring issues with bottlenecks.

The issue begs the question of how best to manage grids so that high-priority RES can come online without detrimentally affecting businesses, utilities and consumers alike. And it is within this context that flexibility, and flexibility markets, can help.

Discussed during Enlit Europe 2022 in Frankfurt, Germany, Louise Rullaud – Head of Distribution & Market Facilitation Team, Eurelectric – said: “We have to reduce emissions by at least 55%… We have to triple the number of heat pumps and…additions of 700GW of capacity are needed…It’s a lot, especially at distribution level, which will create challenges and opportunities.”

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According to Rullaud, flexibility provides an efficient tool for grid operators, supporting them with congestion management without adding more generation or tech onto the grid. And as it’s used more actively, market and business opportunities open up for market parties.

Flexibility markets help energy networks monitor flows and create signals to change energy supply and demand. Additionally, it allows for more clean energy and metering tech, such as smart meters and energy-efficient resources to come online and even assist with congestion management.

One mechanism to manage grid congestion is that of GOPACS, also discussed in Frankfurt by Ron Van Den Berg of Alliander and Maarten Hofs of Stedin.

An initiative of the Dutch grid operators, the GOPACS platform registers congestion and sends a message to market parties. Those with an electricity connection can then place a buy order on a connected energy market platform.

To prevent grid balance from being disturbed at a national level, the reduction of electricity production within the congestion area is combined with a sell order from a market party outside the congestion area.

GOPACS checks whether the order causes problems at other locations in the electricity grid of the participating network operators.

If all signals are green, the network operators pay the price difference between the two orders so that they can be matched on the trading platform and the congestion situation is resolved.

And so, although grid management continues to be a concern, flexibility provides a potential aspect of smart alleviation.

These markets can hopefully provide the ground upon which grid operators can continue to add renewables onto the grid, while ensuring that new electricity connections are possible.

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