RET_2015-01-02-03-04_Flipbook

Demand Response: which place in the future energy system - Peter SCHELL
2 SECONDARY ASSET USE
The key to the solution is secondary asset use. Indeed while the cost per MW of assets
that are used exclusively for services to the energy system grow significantly with
reduced running hours. This is true for traditional generation of course but also for new
technology such as “utility” batteries. The more appropriate solution lies in the creative
use of assets that have a different prime purpose but can also deliver suitable capacity
to the energy system especially if it is for a limited hours a year.
This means that while traditional technologies and newer technologies dedicated to the
energy system will aim at covering the capacity required for a significant number of
running hours, starting from the right of the graph in Fig. 1. And moving up, DR will start
from the left and move down.
Where they will meet should not be decided upfront by the market model but should
depend on the further evolution of all technologies and approaches that compete today
and in the future.
3 POTENTIAL OF DR
We have now defined the qualitative role DR will play. Therefore the question remains
what quantitative role DR will be able to play. This will depend on the following factors:
• How much capacity is needed for limited periods
• How much extra potential is added through elecro-mobility, electric heating &
cooling and distributed storage
• How interesting the opportunity is and remains (see below) the opportunity
In an optimistic scenario where all 3 of these elements are present then 2-3 GW of
capacity are plausible in the Belgian context. That is about 20-25% of max load.
Today already 10% of max load i.e. about 1,4 GW are realistically available assuming a
full market opening. Currently there are about 850 MW already commercialized in R1,R3
and strategic reserves.
4 HOW TO GET THERE
The key required change is a market model that will allow the fair competition for
capacity that is required a limited number of hours. This obviously means giving access
to the new technology an DR in particular to all markets where this capacity is traded:
Balancing market, intraday market, day-ahead market and forward hedging solutions
(central capacity mechanism or market based solution).
But, as forgotten by most governments, it also means not subsidizing existing
technologies such that they are able to enter or remain in this market not withstanding
their structurally uncompetitive cost structure.
In Belgium the first condition is about to be met but there is significant risk regarding
the second one.
Revue E Tijdschrift – 131 ste jaargang/131 e année – n° 1-2-3-4-2015 (publication mars/publicatie maart 2017) 3