Paula Martinez Urios (TU/e) investigated novel methodologies to quantify the gains of participating in local energy communities. With the ‘levelized income from flexibility’ (LIFF) indicator, it is possible to quantify the benefit of ‘using the right energy at the right time’. Traditionally, we either have indicators that specify the amount of flexibility that is available from assets and/or indicators that quantify the financial benefit. Both types of indicators require complex modelling for specific devices and specific markets which makes them difficult to interpret or offers a single-sided conclusion for a specific case. LIFF can help TROEF to resolve this. This novel approach helps TROEF to identify the value of participating in energy communities. This work provides input for the digital twins and simulation models.
The energy transition triggered many countries to set ambitious climate targets for the current and upcoming years. The installation of distributed energy resources such as wind and solar photovoltaic is increasing rapidly, together with the electrification of sectors such as transport, with electric vehicles, or of heating, with heat pumps. While the energy transition starts to build a path, new challenges appear on the way. The intermittency of such distributed energy resources, or the grid capacity in certain areas, are some of the technical constraints that system operators face nowadays and that impede new PV installations in areas of countries like The Netherlands.
Flexibility and Local Flexibility Markets (LFMs) appear at a time when consumers follow the electricity market prices more than ever before.Becoming a more active consumer or prosumer can bring active management as a part of the solution to the grid constraints. However, many are the barriers that LFMs need to break in order to reach the mass market that would bring the liquidity that system operators need.
The idea of this work was to create a simple tool that helps to quantify the gains of participating in different LFMs and comparing this to the environomical benefits only doing load shifting, while considering the electricity tariff contracted by the consumer/ prosumer. The Levelised Income From Flexibility (LIFF) is a new proposal that aims to serve as reference to compare different markets or projects at high level, from the conception stage. With the low revenues coming from participating in such markets as one entry barrier for the innovations in the field, a simple and universal tool can help to illustrate the current detachment betweenthe costs of grid reinforcement or deferraland the alternative cost of a robust demand side management mechanism.Such mechanism would also call for the need of more available data regarding historical flexibility activation prices that can allow the forecast of future revenues coming from LFMs and attract liquidity. Increasing market liquidity in LFMs is key to increase competition and ensure that market buyers can rely on the LFMs to solve technical grid constraints. In order to improve accessibility to the market and transparency, it is important that historical flexibility activation prices are public -as many other relevant electricity prices (day-ahead, intraday)- and can be shown in webpages such as the Transparency Platform from ENTSO-e, together with prices from other electricity markets. Today, the lack of available information and clarity on possible revenues coming from LFMs in Europe prevents possible flexibility service providers from entering the market and the creation of new LFMs.
The present work
explains the LIFF concept and provides an example of an application: building bid
curves for different asset roundtrip efficiencies. Some of the conclusions
reveal the advantages of implementing this mechanism among users that have a
dynamic time of use tariff (versus a flat tariff), and how active management through
flexibility will help to maximise consumption from self-generation. Although
complexity can be added and new applications of the LIFF can be further
developed, the indicator has the advantage of avoiding specificities linked to
market design such as the way baselines are built for different flexibility
service providers, through taking one kilowatt-hour as the functional unit to
the flexibility energy offered. This novel approach helps TROEF to identify the value of participating in energy communities. This work provides input for the digital twins and simulation models.