DEMAND RESPONSE & CUSTOMER EMPOWERMENT
Demand response is a specific form of flexibility. It involves the active customer and seeks to modulate controllable loads while taking into account the user’s needs and expectations (e.g., comfort).
Different types of Demand Response (DR) schemes were tested in the frame of InterFlex. They are generally characterized by the following key elements:
- The nature of the flexibility asset with its associated temporal availability and/or capacity constraints.
- The operational activation channel which can rely on control boxes or smart meters, but also on the end customer as an active contributor to the activation process.
- The specification of the activation criteria as well as the associated remuneration (flat rate and/or fixed for each activation) for the flexibility service provider via reserve mechanisms or by means of opportunistic market offers.
InterFlex experimented the use of a wide range of demand response flexibilities, through different activation channels and based on country-specific needs. In the German demonstration, the effective need for frequent curtailments gave preference to the direct DSO-control of flexible loads. Flexibility activations by service providers, through local flexibility markets, have been tested in France and The Netherlands, whereas the Swedish demonstration in Simris has looked into the specificities of a Citizen Energy Community. In the Czech Republic, the charging power of electric vehicles connected to the DSO’s charging stations could be curtailed in case of distribution grid constraints.
The comparative analysis provided insights into the respective advantages and challenges.
Direct DSO Activation
In the case of direct activation, a contractual agreement between DSO and customer allows the DSO to control flexible loads directly. This was the approach taken in the German InterFlex demonstrator where Avacon steered residential loads (storage heaters and heat pumps) through its IT platform called Smart Grid Hub (SGH). Similarly, in the Swedish InterFlex demonstrator, E.ON directly steered flexible assets at customer households to support prolonged islanded operation. This flexibility could be provided to increase or decrease the household power consumption, thus making the residents direct contributors and part of the solution by adding balancing flexibility to the microgrid.
- Advantages: Cuts down on transaction costs, allows reactive strategies and reduces complexity.
- Challenges: Difficult to ensure efficient allocation of flexibility and to identify adequate remuneration rates.
In the case of a market-based approach, as tested in the Dutch and French demonstrators, flexibility requests and offers are matched on a market platform, usually with aggregators handling the bidding and end-customer activation.
- Advantages: Ensures adequate pricing and efficient allocation. Potentially more access to flexibility and possibly value-stacking. Facilitates customer enrolment by allowing offer bundling with other value proposals for customers.
- Challenges: Complex system with numerous interactions and a minimum number of market participants for liquid transactions.
In the French Demo, behavioural flexibility has been tested with a specific panel of residential and professional customers. When Enedis activated such flexibility offers, the aggregator sent an email and a text message to the customers asking for flexibility during the required time slot. The customers remained the master of the activation and could decide without penalties to reply or not to the activation request. Other kinds of flexibilities, also tested with residential and professional customers, involved global offers including automatic remote control and value stacking.
Customers in the Dutch Demo were empowered by using an app for controlling the amount of flexibility their EV could offer to the grid. Flexibility provided by EV was made accessible through smart charging algorithms managed by the aggregator (Jedlix). The EV driver got a reward of 5 cents per charged kWh using the smart charging routine. He could track the generated savings via the registered Jedlix app available in the PlayStore (Android) and App Store (iOS).
In Germany Avacon focused on a contemporary interpretation of existing rules for flexible loads. New technology such as the smart meter in combination with a powerful central management and control platform allowed the DSO to control flexible loads individually and directly. Avacon relied on existing agreements in the German regulatory framework that empower the DSO to define charging slots for storage heaters and to curtail heat pump operation for limited periods of time to transfer the heating load towards time windows of high DER-production or slots of expected high prices for balancing energy.
The Swedish demo in the village of Simris used distributed flexibility provided by its inhabitants and active customers to extend the islanding periods and diminish curtailment of renewable energy. The flexibility arose from Demand Response, controlling residential assets: batteries, heat pumps and water boilers. This process was fully automated and based on E.ON’s control algorithms. The main battery in Simris played a central role in this control algorithm. The households in Simris received remuneration for the flexibility provided by the Demand Response steering. Through a dedicated user interface the customers could follow their provided flexibility.
InterFlex demonstrated the successful implementation of direct DSO-control and of local flexibility platforms and their technical functionalities. The ex-post validation of the flexibility activation has been obtained through dedicated service check routines.
There is an immediate potential for the use of the InterFlex project results in areas with grid constraints, such as certain regions in Germany with a high share of intermittent renewable energy. The technology used in the German InterFlex demonstrator is fully integrated with the national smart meter framework and offers superior scalability and immediate large-scale implementation potential across the German market while guaranteeing a very high degree of privacy and cybersecurity for connected customers.
For future developments, these achievements can be used as a blueprint for the coupling of infrastructure and IT-systems, integrating both grid control and smart meter rollout. It is also noteworthy that InterFlex’s Demand Response experiments and solutions provide tools to facilitate the development of Citizen Energy Communities (CECs). Indeed, InterFlex successfully attracted a large number of pilot customers for these DR solutions. Other features include an end-user platform that has been developed to display household energy balances, and a real-time simulated P2P-market where citizens could trade privately produced energy with their neighbours.
CHALLENGES & RECOMMENDATIONS
Among the remaining challenges for the tested DR solutions, the financing of control infrastructures still needs to be addressed, and the technical implementation of certain tested solutions requires a full commitment from the regulator and industry to accept new direct-control standards. Indeed, direct-control mechanisms rely heavily on a well-defined enabling regulatory framework.
Another challenge is that financial incentives do not always meet the customers’ expectations, considering both the lack of maturity of the flexibility market, particularly in the B2B and residential segments, and the complexity of the offers which are not addressing essential customer needs. In order to reach cost-effective mechanisms, the flexibility products should be designed to allow value stacking, i.e., have sales potential on different market places or through parallel sales channels.. Benefits beyond financial remuneration are still to be explored. DR is indeed an enabling technology for CECs, but it is also the CEC’s task to drive the availability of local flexibilities.
The use of flexibility for grid investment deferral seems to lead to the most promising use cases. The latter could translate into a fixed remuneration for the flexibility provider and thereby secure the profitability and foster the development of new flexibilities for use at a local scale.
Data privacy and General Data Protection Regulation (GDPR) rules constitute an important issue for grid optimisation. While the project stakeholders agreed on the importance to strictly respect all data privacy rules, the respective demonstrators showed that access to data and particularly smart metering data is critical, considering that it forms an essential input to grid constraint forecasts and flexibility procurement. For instance, under the current rules the customer consent forms that need to be signed prior to any access to metering data have to specify in a very detailed way all services the data will be used for.
The complexity of those consent forms is too high for residential customers and should be simplified without lowering the level of awareness on how the data are to be used. Besides, accurate forecasting by the DSO on localized portions of the grid is required for flexibility management and led within InterFlex to the complementary deployment of sensors, as the currently applied aggregation threshold to ensure the smart meter data anonymization was not reached. Further investigations are required to evaluate how the rules for data aggregation could be adjusted, while guaranteeing data protection, in order to avoid such additional sensor deployment.