Preparing the Market for Virtual Power Plants :DRAFT. Fiona Riddoch COGEN Europe, Brussels

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1 Preparing the Market for Virtual Power Plants :DRAFT Fiona Riddoch COGEN Europe, Brussels

2 COGEN Europe COGEN Europe represents the full supply chain of the cogeneration sector with 72 members across the sector : - 13 Pan-European companies - 15 national associations Kogen Polska - 54 Associate members covering academia to heavy industry and project installation to finance

3 Gas into the home or via the power network to the home? All European Commission scenarios have a significant but slightly reducing quantity of gas as fuel in all parts of the economy in Over 50% of the building stock which will be standing in 2050 is standing today. The remainder will be very energy efficient A large decarbonisation of the electricity sector is assumed (considerable CCS) and based on this decarbonisation electrification of heating is proposed. Fiona Riddoch 3

4 Integration of supply and customer technologies Central Generation including Renewables Decentralised Generation Home Networks / Smart Living Smart Services Smart Meter Smart Charging Decentralised Generation Desertec / HVDC 2 Heimnetz / Smart Home Storage Smart Services 2 Heimnetz / Smart Home Hausanschluß Smart Meter Smart Charging Dezentrale Erzeugung Smart Services Hausanschluß Smart Meter Smart Charging Dezentrale 2 Heimnetz / Smart Home Smart Services Erzeugung Hausanschluß Smart Meter Smart Charging Dezentrale Erzeugung

5 Virtual Power Plant Central control of microgenerators Aggregate capacity of GWe Decouple thermal demand from electricity generation Thermal storage is proxy for electrical storage Available (virtual) generation capacity depends on availability of thermal storage capacity Limited duration Potential value > Reserve capacity > Peak lopping (generation & network) > Islanded operation option

6 Engine-based micro CHP thermally led profile Generation coincides with peak demand and value

7 Micro CHP in Virtual Power Plant Central control of groups of microgenerators Aggregate capacity of Mwe/GWe Decouple thermal demand from electricity generation Thermal storage is proxy for electrical storage Available (virtual) generation capacity depends on availability of thermal storage capacity, demand response Limited duration Potential value > Reserve capacity > Peak lopping (generation & network) > Islanded operation option

8 JRC Inventory smart grids projects in Europe 2012 Smart grid projects investments and scale: Up to 2012 we identified a total of 281 smart grid projects across 30 countries (EU-27, Croatia, Switzerland and Norway), accounting for a total investment of 1.8 billion; After a first phase with some sporadic activity ( ), activities in smart grid projects increased dramatically from 2006 onward; In the period of , investments in smart grid projects were consistently above 200 million per year, reaching 500 million in 2011; Project budgets have been growing steadily. The investment share of projects with budgets of over 20 million grew from 27% in 2006 to 61% in 2012 Fiona Riddoch 8

9 Projects Recently, a key focus of VPP projects has been estimating the benefits of maximising the flexibility of a portfolio of distributed energy resources (demand flexibility, storage, distributed generation) at industrial, commercial and household level. A common theme in these projects is therefore assessing t he viability of aggregators' business models. RWE-led VPP project which tested trail operations with hydro power plants, combined heat and power units, and emergency power systems in and since 2012 has been able to trade electricity on the Energy Exchange (EEX)in Leipzig Projects : Web2Energy, REFLEXE, Virtual PowerPlant, EU-DEEP, FENIX, with technical solutions applied on an increasingly wide scale (e.g. CELL-controller project in Denmark). Key demonstration projects (EcoGridEI, PowerMatchingCity, E-Energy projects) have been testing complex coordination mechanisms among distributed users, taking into account grid constraints and market signals and considering flexibilities of supply and demand Fiona Riddoch

10 German E Energy programme Projects under the German E-Energy programme increasingly show the feasibility of the concept with all participants exposed to marketing and price risks EDEMA project involves aggregating flexibility of supply (14 micro-chps) and demand (1 500 households) based on market signals. etelligence project integrates two cold-storage warehouses, a windpark, a thermal power station and a swimming pool (acting as shiftable load) in a common marketplace. Projects in this programme have shown that Main themes ICT control of flexible generation plants (controllable inverters, current regulated use of cogeneration stations) and localised purchase of reactive power can support grid stabilisation; The integration of decentralised, small producers will be feasible in the future with ICT without endangering grid stability and with less extensive grid expansion; There will be at least one new market function on the energy marketplace flexibility operators will ensure market access for small suppliers and bundle their energy outputs and flexibilities into marketable units for grid operation or electricity trading Fiona Riddoch 10

11 ene.field -European-wide field trials for residential fuel cell micro-chp The ene.field project is the largest European demonstration of the latest smart energy solution for private homes, fuel cell micro-chp Is a Project over 5 years with 26 partners including manufacturers, utilities, research institutes and universities. It will deploy up to 1,000 residential Fuel Cell units in 12 member states, with a demonstration over 3 years in each case. Lifecycle cost assessment, barriers report, commercialisation framework Funded by the partners with support from the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) Includes all of the fuel cell technology variants (high and low temp PEM, intermediate and high temp SOFC)

12 ene.field project partners: Primary Outcomes: Real world learning Developed market focused-product specifications and harmonised codes and standards A more mature supply chain, An evidence base on cost and environmental performance

13 link to the future gas demand in households Future demand profiles and fuels in households will be different The penetration of gas in the network will depend on the innovative home products that can be provided to the customers Fuel cell micro CHP Fuel cell -based micro CHP more flexible higher electrical efficiency Generation coincides with peak demand and value Engine-based micro CHP thermally led profile.

14 ENDS Speaker name 14

15 VPP project Netherla nds Power Matching City II RWE/ Essent m/web/cms/en/ /rwe/innovation /projectstechnologie s/energyapplication/ powermatchingcity/ In the PowerMatching City II pilot in Hoogkerk, the Netherlands, advanced smart grid technology is being tested and developed. This technology optimises the energy use of consumers by automatically shifting local energy production of micro CHP s as well as energy demand of various devices like electric vehicles, washing machines and heat pumps. Hoogkerk II is about exploring this new role of the energy supplier. The project will be expanded with more smart homes and electric vehicles, but the main part of the project is about the interaction with the prosumers and the energy market. Build on the infrastructure of Hoogkerk, new services and products will be tested Fiona Riddoch 15

16 VPP projects Projects focusing on distributed ICT architectures for coordinating distributed resources and providing demand and supply flexibility are probably the majority: > Distributed intelligence/ multi-agent architectures are widely adopted at technical level, with successful trials of technical VPPs (e.g. coordination of DERs for voltage regulation); > A lack of standardised control and communication solutions means that costly ad-hoc configuration is required, which limits the participation of (in particular, small scale) users; > More trials are needed to test the scalability of developed platforms, especially when real-time grid requirements and market signals have to be taken into account; > At market level, the main focus is on analysing the market potential of aggregation schemes and the viability of business models: Fiona Riddoch 16