Battery Investors, EV Aggregators Can Now Get Access to Flexibility Markets
The more renewables are added to the energy system, the more transmission system operators have to deal with large imbalances and find the extra capacity to balance the grid.
“Often, the amount of solar and wind energy that gets produced is different from the forecast,” says Per Almbladh, Head of Product Strategy at Market Services, Volue. “But grid operators still have to balance production and consumption and ensure a stable system frequency.”
TSOs handle these imbalances in the balancing markets where they procure reserve capacity in auctions and activate reserve energy when required.
Traditionally, flexibility has been provided by outlets such as hydro and Combined Heat and Power plants, but this is changing.
“The value of flexibility has shot up, and what we are seeing is that balancing services are provided by new players using new technologies, for example, battery operators and EV aggregators. Every single EV has a battery. If you can aggregate 10,000 cars, you are looking at a huge flexibility storage.”
But getting market access to the different marketplaces is a challenge for new players. It’s also a challenge Per Almbladh and his team is taking head-on.
“Take batteries as an example. Battery investors have a common problem. They need a location for their battery installation that is connected to the grid. They also need market access to flexibility markets and somebody to manage their market activities. There’s also the need for integration with the battery to control when it should charge or discharge."
If battery operators can connect to the grid and are able to control the charging and discharging of batteries, they can participate in the market. In this way, they will not only support TSOs but also get paid for the flexibility they offer.
“At this point, they also need a third party, like Volue, to be the balance-responsible party for that point in the grid to be allowed to bid into the balancing markets,” Per Almbladh says.
Based on the energy level in the battery, his team can forecast how much capacity can be sold in the market.
“We send a bid to the TSO, and the TSO tells us how much of the capacity that we bid into the market has been accepted.”
As a next step, the team controls the battery to respond when needed. When the grid frequency deviates from 50 Hz, the battery will charge or discharge.
Bringing new technologies to the market
Just like battery investors, EV aggregators who aggregate flexibility from individual EV owners need a partner to bring flexibility to the market.
Wind farms can also participate in the balancing markets. Many wind turbines can alter the blade pitch and control how much they produce.
“Most wind farms can adjust up and down their production. Some very recent wind farms are even pre-qualified for these markets.”
Industrial companies with large consumption units, such as boilers or thermal reservoirs, can switch off the consumption units for a short period of time and contribute flexibility to the market.
And as far as batteries are concerned, Per Almbladh expects that in one to two years, we will see a big growth in battery capacity connected to the grid.
“At the moment, the payment is highest in Sweden and Denmark, and this is where we see the biggest investments in battery installations,” he says.