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Industrial demand side response and energy storage

Flexible electricity use may offer an opportunity to lower energy bills for individual industrial customers. Moreover, greater flexibility is vital for the energy transition to succeed. Flexible resources include options covering short term (day-night) variations, options for prolonged periods of high or low production from wind and/or solar, and options needed only sporadically on occasions when security of supply is at risk. As a result, flexible sources can support supply security in various ways.

The Industrial ValueFlex Tool gives a picture of the maximum return per year for flexible deployment of assets in a company, by mirroring the flex capacity with the market value. Can a battery, an electric boiler, heat storage or a production process operate flexibly? And how much capacity can then be available to the market, how quickly? With that information, the tool calculates opportunities on the markets for day ahead, intraday, FCR, aFRR and mFRR power. Various modules zoom in on specific processes: combined heat, batch and continuous processes, energy storage and air conditioning.

Result: efficiency estimation

The result of the calculations is always an estimate of the potential return that can be achieved, per asset, per year. The Industrial ValueFlex Tool thereby gives an indication of returns that are possible in existing markets, but not the optimal mix of assets, smartly distributed across all markets. The tool has many variables, which users can adjust as they see fit. For example, it is possible to enter one's own estimate of price developments in the energy markets into the calculation tool.  Prices in the markets are currently very volatile. Also, production processes can often be adjusted in many ways.

Unknown makes unloved

The Industrial ValueFlex Tool makes it easier for large industrial energy consumers to visualise their financial opportunities with flex power. Such opportunities are readily available in companies where heat plays a role, such as in the chemical and food industries - even if they are slightly smaller enterprises. Sometimes the opportunities are insufficiently known, or it is assumed that a production process cannot simply be adapted. But even in that situation, there are often opportunities in secondary processes, with heat or steam, for example. In the current market conditions, there is certainly no harm in using this tool to explore the opportunities and risks of flex power.

How we support security of supply

National market consultation

TenneT estimates that currently only 10 per cent of the available flexible capacity is used. A national market consultation, announced on 17 November last, should show where additional space could become available on the existing grid by deploying flexibility. Customers would then be able to reduce their grid capacity during peak times and use more capacity at other times for a fee. The study is a collaboration with regional grid operators and industry associations.

Grid cannot do it alone

The launch of the Industrial ValueFlex Tool, is in line with that quest: the deployment of flex power is becoming essential for a well-functioning electricity grid. In several regions, the limits of the high-voltage grid's capacity are coming into view, as requests are growing faster than anticipated and new grids cannot be realised as quickly. With the strong growth of electricity from solar and wind and a high degree of electrification, the capacity of the infrastructure is sometimes insufficient to seamlessly match supply and demand. In other words, sufficient grid capacity is no longer always a given.

Rising costs

That flexibility is much needed is also shown by the rising costs for redispatch, in which TenneT allows producers or large consumers to consume or produce more or less against payment to prevent congestion on the grid. In 2020, the cost for this was €67m, this year TenneT expects to spend €330m on it and next year it is estimated at €470m. More industrial flexibility can therefore help keep both energy and grid capacity costs manageable and optimise the use of available grid capacity.

Stepping up to the future

TenneT is therefore keen to see industrial - and other large-scale consumers unlock their options for flexibility and align their business processes with the opportunities that arise in the markets. Those opportunities are many and varied. With short-term (day-night) variations, options for longer periods of high or low production from wind and solar, and options only needed sporadically to spare grid capacity. The Industrial ValueFlex Tool helps companies better understand the opportunities presented by flexible energy use. And thus bring energy-dependent industry and our grid capacity a step closer to the energy system of the future.