In the field of renewable energy sources one thing above all is important: flexibility. This can, for example, be generated by drawing on energy from large storage facilities. Or from household appliances such as refrigerators and hot water boilers, because these are also small energy storage devices. The potential lies in bundling them and in controlling them through demand side management. In case of inadequate power generation (e.g. if a large power plant goes out) or high demand for electricity (peak load at midday), electrical devices can be remotely turned off and back on for load shedding purposes.
The use of renewable energy sources is continuously increasing and as a result flexibility is becoming ever more important. Alongside flexible power stations, which adjust their production to the power generated from wind turbines and photovoltaic systems, and storage facilities, which can temporarily store renewable energy, DSM represents a potential for flexibility that cannot be ignored and, at the same time, a possibility for new business models. Potential, which the energy suppliers should use for themselves; if they do not, others will recognise the business opportunities and seize control from the suppliers.
DSM: new source of income & optimisation
For energy suppliers, DSM represents a possible area of improvement and a new source of income. Renewable energy is generated if the conditions allow it, i.e. if it is sunny or windy. This energy can be stored in large, central pumped storage plants, although building these has a significant ecological impact, increasingly leading to resistance amongst the general public against such construction projects. At the same time, almost every fridge, electric heater and boiler is an energy storage system, if smaller and decentralised. The potential lies in grouping several such decentralised energy consumers. However, only models that have a direct connection to the power spot market and that allow fully-automated control are viable in practice. Households could take part in the system either directly via their energy supplier or via an intermediary with an automated market connection.
If the consumption of multiple decentralised devices is controlled so that it occurs when there is a lot of power available, it will be advantageous to the energy suppliers and to their customers. The model works by automatically closing the gap between consumers and energy suppliers. Smart metering is setting the tone by understanding the customer’s consumption and subsequently operating a win-win model for both parties. Demand Side Management simply enables new business models that should be utilised. For example, an energy supplier could connect a household’s fridge to the network for free to make this attractive to customers. However, it is not just in normal use that DSM has its advantages, the concept also helps in exceptional situations. This was demonstrated in Florida after Hurricane Irma, where targeted load management helped the system to remain somewhat stable despite the impacts to the network.
Concept for balancing energy
What is stopping energy suppliers from implementing the new DSM business models themselves, instead of potentially allowing startups and intermediaries, who are already sensing their chance, to take the helm? Until now energy suppliers have been very quiet on the topic of marketing flexibilities. Even network operators have said little, whilst DSM concepts (keyword – balance energy) would be more than helpful to ensure the security of supply. Do the established providers really want to wait for others to take the helm and challenge their business? It’s time to trade!
Commentary published in: zek Kommunal 06.04.2018; © 2018 zek.
The original article (in German) can be downloaded in PDF format.
About zek Kommunal
zek Zukunftsenergie und Kommunaltechnik (“Future Energy and Municipal Technology”) is a politically independent trade magazine for renewable energy and future-oriented technologies, as well as municipal management.
Its readers include, among others, mayors, heads of municipal organisations and energy providers in Austria, Switzerland, Germany and parts of Italy.
© 2018 zek