ENTSO-E network codes will open further the potential of aggregation of distributed energy resources

The massive installation of intermittent renewable technologies such as wind and PV is challenging the energy balance. In this new scenario, demand side is key and can play a relevant role in meeting this challenge, reducing the need for more expensive flexibility services from traditional generation and network-scale storage. In addition, demand side participation is critical to accomplish a cost-effective energy transition.

by Ignacio Porto Olivares, CTO olivoENERGY

In some member states there are already flexibility programs provided by large industrial and commercial loads, however, the conditions to participate in these programs are still limited to large capacity load which is offered in the balancing markets. In order to reach the full potential of demand side, small loads like smaller industrial, commercial and residential should have the chance to provide their flexibility in the market.

Yet, flexible load offered by these consumers has to reach a certain scale that is useful to System Operators and/or Balance Responsible Parties. Therefore, their load have to be aggregated by an aggregator who can act on their behalf and can sell their flexibility in the different markets not only in the balancing market. To increase competition to allow these services, there is a need to untapped flexibility from demand and clarify the relationship and responsibilities of the different energy players.

In this regard, Network Codes are being developed to codify the operation of the Internal Electricity Market and particularly one of these codes, which finally is a guideline on Electricity Balancing (EBGL) is very important to shape the participation of demand flexibility. The EBGL approved in December 2017 establishes the European regulatory framework for the development, implementation, operation and monitoring of balancing markets of the future Internal Energy Market (IEM) in the field of electricity. GL EB establishes the following target model:

· Establishment of a timetable for the implementation of European platforms for the exchange of balancing services, under a TSO-TSO model, in particular in the field of balancing energies (2019-2021)

· Framework for the harmonization of the different balancing markets at European level (procurement and settlement of frequency containment reserves, frequency restoration reserves and replacement reserves), as well as a common methodology for the activation of frequency restoration reserves and replacement reserves, through common principles and norms.

Regarding demand side, this Guideline aims to “facilitating the participation of demand response including aggregation facilities and energy storage while ensuring they compete with other balancing services at a level playing field”

“No later than six months after entry into force of this Regulation (June 2018) and for all scheduling areas of a Member State, the TSOs of this Member State shall develop a proposal regarding: (a) the terms and conditions for balancing service providers; (b) the terms and conditions for balance responsible parties. The terms and conditions for balancing service providers shall “allow the aggregation of demand facilities, energy storage facilities”

Definitely Network Codes will open further the potential of aggregation of distributed energy resources and will increase demand participation.