In the INCREASE project, we have developed innovative solutions for control of distributed renewable energy sources (DRES) and of demand response (DR) units. They include advanced inverters for small-scale photovoltaic (PV) generation, as well as the hierarchical multi-agent system (MAS) for their control. The supervisory control level, the scheduling control, is in charge of the flexible energy portfolio optimization, where demand response units’ flexible energy is optimized to maximize the value of the ancillary services (AS) provided in the electricity markets and prevent grid conflicts of interest.
The outcome of the control of flexible energy sources is highly dependent on the rules and boundary conditions within which the system operates. These rules encompass the technical, economic, market, and regulatory provisions and define the framework specific for each country in which the control solutions are deployed.
In our new report D5.3, entitled “Enabling frameworks for INCREASE solutions” we investigated the viability of the INCREASE control solutions and key INCREASE AS provided within the current framework conditions in the INCREASE partner countries. While the low voltage (LV) grid of the Slovenian Distribution System Operator (DSO) Elektro Gorenjska (EG) served as the basis for previous assessments in the INCREASE Report D5.2, in the new report an assessment for a representative European grid is the basis for overall policy conclusions. This representative grid was created based on a questionnaire about typical network settings and parameters in different European regions.
In the report we present business cases with positive revenues for an aggregator implementing INCREASE solutions. The aggregator has a successful business if his costs are distributed among sufficient DR units in his pool. In case of the aggregator’s pool size of 10 000 DR units, the costs are spread across enough units to achieve annual profit in the operation. Scenarios with lower level of integration of PV and DR are less profitable, which becomes problematic in smaller pool sizes. There the aggregator becomes profitable only with increased energy prices or including the PV units in his business portfolio as well.
For all of the pool sizes an increased level of integration leads to better cost distribution and more favourable conditions for the aggregator. Other factors such as higher market prices (e.g. on the reserve markets) would promote his profits. Under the realistic cost assumptions employed in the investigated business models, flexibility from DR alone is hardly profitable for small DR pools. When PVs are included in the aggregator’s pool, also smaller pools are profitable. This means the aggregators should mainly include PV units when operating smaller pools.
Overall the results showed that the EU grid is more profitable that the Slovenian DSO grid, even when accounting for Slovenian personal costs below the EU average. Also for small pool sizes it is possible to secure flexible energy portfolio sizes above 1 MW, the minimum bid size in several reserve markets. However even smaller flexible energy amounts may lead to profitable business cases and therefore the market requirements should not be prohibitive. The energy market of the future will be characterized by a multitude of market actors with different business portfolios and costs structures and only an inclusive approach will lead to the needed transition of the EU energy systems.
The entire report can be doanloaded here...