Demand Side Management & Smart Grids

Up to now, electricity grids have been designed and developed to take care of relatively well-known customer load profiles and manageable power generation units. The Transmission System Operators (TSOs – Elia in Belgium) are responsible for ensuring a continual balance between production and consumption. The main way to fulfil this responsibility is to buy ancillary services (primary, secondary and tertiary reserves).

However, the arrival of significant volumes of renewable energy resources on the existing grid architectures – wind, solar, CHP, biogas, etc. – has led to a new era in which the old “production follows consumption” paradigm is no longer applicable. Given the (relative) unpredictability of production by these local units, the old paradigm has to be replaced by a new paradigm in which “consumption follows production”. At the same time, the supply/demand “imbalances” on the grid become visible at a much more micro-level – managed by the Distribution Grid Operators (DGOs, e.g. Eandis or Sibelga) – and require new mechanisms for dealing with those situations.

Under these circumstances, new market roles (e.g. aggregators and virtual power plants or VPPs) have emerged, which offer flexible products to existing players, for both technical (congestion, balance) and commercial (portfolio) applications. These new arrivals put pressure on the existing operating models, as some of the actions initiated by these new roles can counteract the traditional regulating mechanisms. An area of potential conflict between commercial players (seeking to maximise added value for their customers and optimise their portfolio) and grid operators (seeking to protect their assets and the safe operation of their grid) has led to discussions on local, national and international levels.

New paradigm for smart grids

At the European level, the “traffic light concept” (TLC) has gained support and is regarded as the new paradigm for smart grids:

In this illustration, the “green zone” represents a situation in which grid constraints are non-existent and the market-driven logic can be fully deployed, and the suppliers are in the steering position, even if they will need to pass some “information flows” to the grid operator.

In the “red zone”, the operation of the grid is in danger – the grid operator takes over control and can overrule commercial operations (at a certain cost…).

The “orange zone” is the most challenging part: this is where actions can be taken to “stay in” – or “get back to” – the green zone. As indicated in the illustration, the renewables play an important role
in this area.

Demand / Response products

Current activities by TSOs and DGOs focus mainly on curtailment – that is, cutting generated power from the grid by de-activating renewables. This results in losses of both kWh and euros for producers and suppliers. Maximising the use (hosting) of renewables on the grid, in order to realise the “consumption follows production” paradigm, is a prerequisite for the smart grids under development. This requires mechanisms for exchanging information and for interacting with
production, consumption or storage devices. These mechanisms can then be bundled into “demand /
response products”.

Typically, products used in this demand/response mechanism will have 3 time horizons: a long-term activity focused on identifying available flexibility (“flex audit”) and contracting these flex loads; a “day ahead” mechanism to match forecasts from both suppliers and producers; and an intra-day activation. At the moment of activation, a “call” from the buyer needs to be de-aggregated into individual “demand/response events”, which will ultimately act on the individual power installations.

Over the past 4 years, Trilations has participated in the development of “flex use cases” that model the information flows and the business rules related to these “D/R events”. These use cases have been adopted by CEN/CENELEC and are now being considered by the IEC1 as potential worldwide standards.

For more information regarding this article, please contact us via
Author: Jan Van Cauter