WS-3: SMART GRID BUSINESS CONVERGENCE
SMART GRID BUSINESS CONVERGENCE: FLEXIBLITY TRADING FOR PROSUMER COMMUNITIES”
USEF: Universal Smart Energy Framework [www.usef.info]
MAS2TERING: Multi-Agent Systems & Secured Coupling of Tel-ecom & Energy gRIds for Next Generation smart grid services [www.mas2tering.eu]
Easy smart grid [www.easysg.de]
Blaenau Gwent County Borough Council (BGCBC)[www.blaenau-gwent.gov.uk]
Workshop Context & Agenda
The “Smart Grid Business Convergence” workshop at SP’16 is a public event that clusters and presents the ongoing development of several influential and demonstra-tive initiatives, facilitating the market uptake of innovative business models, ICT solu-tions, and evaluation mechanisms for the trade of energy flexibility. The “Smart Grid Business Convergence” workshop at SP’16 brings together industrials, ICT and cyber security experts, energy suppliers / retailers, distribution grid operators (e.g. DSO, DNO), scientists, business analysts, and power engineers to share and ex-change their experiences and ideas towards progressing state-of-the-art in (dis)aggregated flexibility trading leading to prosumer-oriented smart European energy communities.
The “SMART GRID BUSINESS CONVERGENCE” workshop at SP’16 is motivated by the need for Europe to transition its energy markets (generation, distribution and consumption) into smart energy systems that support bi-directional flows of revenue, energy and information via flexibility services procurement and new business mod-els. The success of the European vision of a low carbon electricity grid that minimis-es greenhouse gas emissions, and securely enhances quality and reliability of sup-ply, depends on how power infrastructures empower new and incumbent market ac-tors. Recent communications from the European Commission have called for a rede-sign of the energy markets (COM340) to take advantage of system wide flexibilities and a New Deal for EU energy consumers (COM339) that empower choice and par-ticipation in the smart grid.
Quantifying the value proposition—Modeling and examples of the value to consumers; Modeling and examples of the value to DSOs; Modeling and examples of value to the energy markets
Delivering the value proposition:- Examples of working aggregator busi-ness models – or how to make them work; Examples of bundled services – or services that are ripe to be bundled; Examples of incentives / programs / stimulus that have kicked off a local energy community or what incentives / programs / stimulus are needed to make it work
Workshop Co-Chair: MAS2TERING
MAS2TERING develops home area network ICT technologies that connect consum-ers and prosumers to the grid and then apply multi-agent system optimisation tech-niques with the objective to lower consumer energy bills and facilitate DSO capaci-ty management – and this has benefits on the grid at large. The ICT software un-locks benefits on three progressive levels: a prosumer lowering the family energy bill, a local energy community exchanging flexibilities to lower the community ener-gy bill, and lastly the local energy community integrated into the low voltage grid to both lower energy bills and facilitate DSO capacity management. Central to mak-ing this possible is the role of the Local Flexibility Aggregator and new business strategies and collaboration opportunities between utilities, telecoms, and consum-ers in a multi-sided platform business model
In the MAS2TERING smart grid conceptual framework, the prosumer is the provider of flexibil-ity and is part of a local community of prosumers. The community is composed by prosumers all belonging to the same local area (a portion of LV grid) and represented by the same Local Flexibility Aggregator (LFA). The “local” aspect of this community is the focus and added value of MAS2TERING. Flexibility is not only aggregated in a central way by wholesale market aggre-gators (representing huge portfolios of prosumers); in MAS2TERING it is first used by prosum-ers of the community for in-home optimization and then traded at local level both to bring added value to prosumers and LFA and to support DSOs in congestions management. The lo-cal optimization of flexibility is enabled by the MAS2TERING key technologies (Energy Box), tools (MAS optimization) and services (cyber security) and is based on the market-based mechanism envisioned by the Universal Smart Energy Framework (USEF), which has been ex-tended and adapted to the MAS2TERING business case.
MAS2TERING consists of nine project partners from five EU countries:
1. CEA (France)
2. SMS, Plc. (United Kingdom)
3. R2M Solution (Italy)
4. ENGIE (France)
5. Airbus CyberSecurity (France)
6. Telecom Italia (Italy)
7. Cardiff University (United Kingdom)
8. Waterford Institute of Technology (Ireland)
9. Laborelec (Belgium)
Workshop Co-Chair: USEF: “Universal Smart Energy Framework” [www.usef.info]
By delivering a common standard on which to build smart energy implementations, USEF con-nects people, technologies, projects and energy markets. It is the basis for an integrated smart energy future that is both efficient and cost-effective. The framework defines each stakeholder role in the energy market, how they interact and how they can benefit by doing so. With existing detailed specifications and real-life pilots in the market, USEF is perhaps the most comprehen-sive, advanced initiative of its kind.
USEF Foundation develops, maintains and audits the framework.
Founded by seven key players, active across the smart energy chain, USEF partners are working together to deliver the foundations of one integrated system which benefits all players – new and traditional energy companies and consumers. With detailed specifications, the USEF framework describes the processes and interaction be-tween different roles and also addresses the contractual arrangements and agreements required to facilitate this. The market structure comprises specifications which define the roles and responsibilities of each stakeholder, how they interact and how they can benefit from doing so. A market-based coordination mechanism ensures the system is optimised based on least cost and maxi-mum efficiency. The processes related to achieving this are also defined. The tools include descriptions of basic service requirements and a reference implementation for inspiration and exemplary coding. Privacy & security are defined to balance consumer confidence with security of sup-ply. USEF complies with the new European General Data Protection Regulation.
General Benefits – By delivering a common standard on which to build smart ener-gy implementations, USEF connects people, technologies, projects and energy markets. It is the basis for an integrated smart energy future that is both efficient and cost-effective. The framework defines each stakeholder role in the energy market, how they interact and how they can benefit by doing so. With existing detailed specifications and real-life pilots in the market, USEF is perhaps the most comprehensive, advanced initiative of its kind.
Connects smart energy products and projects – USEF’s open IT architecture provides the freedom to create unique and commercially competitive smart en-ergy products and services, while delivering the common standard on which to build them. This ensures that all technologies and projects will be compatible and connectable to the future smart energy system.
Delivers smart energy market opportunities – The smart energy market will see existing roles adapted and new roles created, some of which will be appealing to all types of organisation, from supermarkets to insurance companies. By defin-ing the individual roles, responsibilities and interactions required, USEF enables interested parties to both understand and realise smart energy opportunities.
Reduces costs – By delivering a common standard to build on, USEF reduces the cost to connect different technologies and projects to the energy system. Its market-based coordination mechanism then defines the rules required to opti-mise that whole system, ensuring that energy is produced, delivered and man-aged at lowest cost.
Accelerates smart energy transition – Rapid transition to a smart energy future requires that we think beyond existing roles, companies, regions and countries. We need to work together, based on a common standard, towards an integrated system that benefits everyone. USEF was founded on those principles and de-livers the tools and rules to make it happen.
USEF Residential prosumer benefits:
The consumer role in the energy market is changing. We have access to more real-time information about our energy use and the associated costs. This allows us to make better choices to reduce bills. The introduction of multiple pricing mechanisms will offer financial incentives to encourage us to shift our usage to periods when overall demand is low, to reduce system stress. Many consumers have become prosumers, also generating energy via solar panels.
Interconnectable smart appliances and apps are creating smart homes that we can interface with and control. The real revolution will come from unlocking consumer flexibility. Some of our energy use is not essential, or non-time- critical, and so we can be flexible about it. We could get paid for that flexi-bility by selling it to grid operators and those balancing supply and demand. They could then choose to move it in time, or not supply it at all, to help reduce periods of stress on the system. Given that a proportion of our bills are to pay for the system, helping re-duce stress will lower our bills.
USEF makes these things possible by delivering the market, tools and rules required to commoditise and trade energy flexibility. It also specifies the role of an Aggregator, who would buy flexibility from multiple consumers and collate enough if it to offer as solutions for system stress.
USEF Business prosumer benefits:
Reducing or better timing energy use or better timing it can significantly reduce costs for a business. You can also benefit financially by selling your flexible energy use to en-ergy system parties, either directly, or via an Aggregator. Where energy use is not time-critical, they buy the ability to move it to reduce stress on the grid or to avoid buying en-ergy when prices are high. Access to back-up power supplies could also be sold as flexibility for use in emergency situations, allowing your company to be switched on to it when the grid is stretched and demand needs to be reduced quickly, or to be called on in grid blackout situations. USEF unlocks the value of this flexibility by turning it into a tradeable commodity (UFLEX) and delivering the market structure and tools and rules to make it work effectively. Adopting USEF can therefore provide new income, reduce or limits energy bills, and help your organisation be more sustainable. You may also choose to become an Aggregator based on USEF’s role description and interaction model.
USEF Aggregator benefits:
USEF helps interested parties to understand the nature of the opportunity that the new Ag-gregator role offers and provides the tools to act on it. It makes the boundaries of an Aggre-gator’s business model clear, without limiting opportunities. USEF defines the role and deliv-ers the related interaction models and sample technical references. These things are particu-larly important where the role is of interest to companies not currently active in the energy markets but that have existing retail relationships and expertise. As well as gaining early ac-cess to commercial prosumers with the highest volumes of flexibility to sell, the first Aggrega-tors to adopt USEF will play a role in setting the standard for the function, effectively creating a hallmark for the future which they can then apply to generate customer confidence in their brand.
USEF BRP benefits:
Forecasting, and actively balancing, supply and demand in the most economical way have become increasingly challenging for the BRP. More renewables technologies and higher electricity reliance have made their portfolios less predictable, leaving them susceptible to im-balance charges and having to buy any shortfall during peak price periods. USEF helps to mitigate these risks. USEF offers a standardised way to incorporate flex to avoid imbalance and optimise your portfolio in a way that is closely related to current working procedures.
USEF DSO benefits:
With the grid under increasing stress as a result of growing reliance on electricity and the in-troduction of new renewables technologies and electric vehicles, the role of the DSO is in-creasingly challenging. The risk of outage is rising and increasing daily and carries a signifi-cant financial penalty. Shoring up or replacing parts of the system is expensive, time-consuming and adds to complexity. USEF helps the DSO to mitigate risk and play a smarter role in the system. It delivers easier access to Prosumers’ flexible supply and demand by making their active participation in the grid possible. This can be used to alleviate grid stress and defer or avoid grid upgrades. It also encourages prosumer reliance on the grid by provid-ing them with the opportunity to benefit financially. This reduces the likelihood of their defec-tion as storage technologies become more readily-available, making self-balancing achieva-ble.
Workshop Co-Chair: Easy Smart Grid
To make the electric energy system more flexible, Easy Smart Grid proposes a simple, afford-able, secure and robust technology. It combines two established principles that so far have been used separately in the energy system:
The economic principle: Variable prices in the energy market ensure the balance of production and consumption. As volatility grows with more renewables, real time mar-kets maintain system balance by faster and more frequent electricity price updates.
The engineering principle: Any imbalance of production and consumption leads to a change in grid frequency. This information is used to activate control power from fos-sil plants and, increasingly, large customers. This is also used for virtual power plants, executed by aggregators.
Easy Smart Grid combines these two established principles by coding a price signal onto grid frequency. Technical and economic stimuli now work in synchronism, and the resulting system becomes more efficient and less complex.
With Easy Smart Grid each grid participant can take decisions that are optimal for him as well as for the grid.
Easy: In the past, energy was for specialists only. In the future, many more players will partici-pate in the energy system. They need to understand how it works and how they can benefit to play an active and positive role in the transition. Easy Smart Grid is about making it easy to un-derstand Smart Grid for everybody.
Smart: Smartness means creating maximum benefit with minimum investment and effort. It is about being ready for the future while having a solid foundation in the past. Smartness also means to take precautions against risks: ensuring a system will work whatever may go wrong. Easy Smart Grid is about using the best and most suitable technologies available to achieve our common goal: a climate friendly energy system.
Grid: Energy is more than electricity. Easy Smart Grid focuses on electricity because the growing use of sunshine and wind for electricity generation drives the energy revolution. We know that electricity interacts with other grids: heat, water, traffic, communication. So we make it easy for all to interact with each other.
Easy Smart Grid proposes an effective and efficient solution:
Low investment in ICT (some investment required for decentral controllers and energy meters, but not for an extra communication network, grid instrumentation and aggregation) and therefore low transaction cost
High robustness and security (protection of privacy, resilient against component failure and no open door for hackers)
Trading platform for flexibility of all sizes, forms and with wide time span (from seconds – primary control – to days ahead)
Maximum mobilization of customer flexibility allows higher renewable energy share or lower battery cost
Future proof (designed for 100% renewable driven grids)
Lower total energy cost in early markets where renewables are already cheaper than fossils
Easy Smart Grid Impact
Historically, only energy had a value in the “Energy Only Market”, flexibility did not. Grid participants (such as renewable energy producers) that needed or could offer (like flexible consumers or battery owners) flexibility, mostly had no help to find their counterparts in the existing market and grid, and make mutually attractive agreements with them.
While more investment into flexibility would be needed, there still is no attractive business model. Easy Smart Grid leverages all flexibility in the grid. The commercial relationship between suppliers and consumers is based on a fair and transparent energy price that reflects the constraints and added value of all actors in the market (volatility, comfort, productivity, energy cost, flexibility and control).
Easy Smart Grid Mission
The Easy Smart Grid mission is to facilitate and accelerate the energy system transfor-mation by applying our knowledge and vision to the business of our partners. Historically, only energy had a value in the “Energy Only Market”, flexibility did not. Grid participants (such as renewable energy producers) that needed or could offer (like flexible consumers or battery owners) flexibility, mostly had no help to find their counterparts in the existing market and grid, and make mutually attractive agreements with them.W hile more investment into flexibility would be needed, there still is no attractive business model. Easy Smart Grid leverages all flexibility in the grid. The commercial relationship between suppliers and consumers is based on a fair and transparent energy price that reflects the constraints and added value of all actors in the market (volatility, comfort, productivity, energy cost, flexibility and control).
Workshop Co-Chair: Blaenau Gwent County Borough Council (BGCBC)
The Blaenau Gwent County Borough Council (BGCBC) represents Blaenau Gwent, a county borough in South Wales, UK, formed in 1974 as a local government district. The involvement of Blaenau Gwent County Borough Council (BGCBC) in RESILIENT is via “The Works” at Ebbw Vale, Blaenau Gwent. The Works is a vibrant and distinctive de-velopment in the heart of the county. It is a major (£350 million) regeneration project to redevelop the former Ebbw Vale steelworks site. Once completed, the development aims to bring around 720 new homes to Blaenau Gwent and generate 2000 new jobs. Please see the Green Growth Wales: Local Energy Smart Living Demonstrator Frame-work “Supporting concept and structure” Outline Guide for details on current sustainabil-ity initiatives of BGCBC.
Strategic Importance for Blaenau Gwent, RESILIENT project:
Contributes to the development of a more sustainable environment Contributes to increased energy efficiency of buildings at a district level Opportunities to replicate project outcomes Contributes to Council objectives for improved economic attractiveness and wellbeing Contributes towards the Medium and Long Term Financial Plan Challenge –private sector business engagement
Energy Priorities for Blaenau Gwent CBC
RESILIENT project Blaenau Gwent Strategic Needs Assessment 2012: “Blaenau Gwent has a green and sustaina-ble environment” –USP Financial efficiency projects are a priority, includes reduction in energy use
Drivers: Smart Living/Energy Projects –key to addressing corporate priorities: Children and young people’s learning and achievement levels are maximized People and communities are able to help themselves The living environment is vibrant and attractive Welsh Government –reducing emissions, improving energy efficiency and supporting low carbon energy in Wales‘to create a sustainable, low carbon economy for Wales’
Activities/Opportunities: District Heat Network Opportunities Enterprise Zone Circuit ofWales Residential new build The Works –test bed for innovation