Equigy offers a new way for TSOs and DSOs to optimise the energy system together
Smart collaboration between TSOs and DSOs can help solve the growing problem of grid congestion. Equigy, which proactively works to bring various players in the energy system together, has developed a four-step model that could see TSOs and DSOs develop smart solutions together.
Think of energy grid congestion as a traffic jam on a highway – a two-way bottleneck – and you get an idea of what both transmission and distribution grids are currently experiencing at an ever-faster rate.
Europe’s energy system is undergoing massive changes. The once centralised and predictable system revolving around big power plants is decentralising. The growth of renewable electricity generation means the system is becoming widely distributed and fairly unpredictable. How the system is managed needs to adapt, along with the resources needed to balance the grid.
This development presents challenges for transmission system operators (TSOs), who need to balance electricity production and consumption. To keep the grid in balance, TSOs need to access flexible sources of electricity. In the past, big power plants provided flexibility but these are being decommissioned as part of the green energy transition. With its European crowd balancing platform, Equigy is creating an innovative solution to meet this challenge. The platform provides a trusted data exchange to enable aggregators to access sources of electricity from consumer-owned devices, such as home batteries and electric vehicles. In turn, this allows consumers to participate in the electricity balancing markets, turning them into prosumers.
To this end, Equigy is playing a key role in the acceleration of the energy transition and the integration of the energy system. But grid balancing is just one challenge to overcome.
Congestion in the new power market
In the increasingly complex, weather-reliant and fragmented energy market, congestion is becoming a growing problem, making redispatch a hot topic for all players in the system.
Rene Kerkmeester, CEO of Equigy, explains: “The topology of the power grid is simply not fit for the two-way traffic that’s being generated in this new exchange. It’s causing severe congestion in the grids – like traffic jams on the highway.”
Traditionally, the need for flexibility has been primarily at the transmission level but with the growth of decentralised energy resources at the distribution level, local flexibility requirements are emerging. This needs redispatch coordination across the systems by the different players in the market, especially between TSO (national high voltage) and DSO (local medium and low voltage) grid operators.
Congestion is playing out for TSOs and DSOs in different ways.
If, for instance, offshore wind farms in the north of Germany produce substantial amounts of energy and there is high demand in the south of the country, the result will be major congestion between the two regions at TSO level. At a local level, the distribution grid has its own congestion problems when, for example, hundreds of electric vehicles in the same suburb want to charge at the same time. At times like this, the DSO may not be able to handle the demand.
“If a TSO has to solve congestion between the north-south of a country, and the local DSO experiences congestion in the area where they’re operating, there is clearly a need to align measures to optimise a connected system,” says Kerkmeester. “You cannot optimise a whole system by sub-optimising one area only. It doesn’t take the bigger picture into consideration.”
He adds: “If we don’t fix this, then people cannot have the energy that they need and pay for – and we need solutions for that.”
System optimisation together
One possible way to ease congestion is to build more grids. But building an electrical infrastructure can take many years. Infrastructural development is necessary but must be accompanied by other types of solutions.
Another solution is to implement constraints, with the grid company dictating, for example, when and what time consumers can charge their cars.
However, Kerkmeester believes there are smarter solutions available to accompany the development of the grid, and that constraints are not the most effective solution. Equigy favours a free-market redispatch model where prices determine who wants to charge and who does not want to charge. This also offers a market opportunity for prosumers, as ‘selling’ their electricity at times of high demand can bring a greater return. As Kerkmeester says, “the economic principles of the marketplace offer the fairest solution.”
To work towards this fair market model, it is clearly desirable that TSOs and DSOs work together closely to achieve the redispatch system optimisation together.
Equigy can provide a breakthrough for this need, facilitating the coordination between the TSOs and DSOs, and providing a proof of delivery that is immutable and transparent.
To achieve optimal TSO / DSO collaboration, Equigy has developed a roadmap of four different models – offering varying degrees of integration or grid coordination between TSOs and DSOs. The four-step plan offers a way for DSOs and TSOs to work towards closer collaboration.
In model 1 (termed ‘visibility’), which allows the least integration, DSOs simply receive data on low-voltage activations from the TSOs. In model 2 (‘traffic light’), DSO constraints can be applied at any time during the process. In model 3 (‘local priority’’), DSOs can reserve flexibility to solve local-grid congestions or voltage problems. Finally, in model 4 (‘equal market’), flexibility is optimally allocated between different markets in a free-market basis.
The degree of grid coordination between TSOs and DSOs starts with model 1 and 2, maturing into market coordination (model 3 or 4).
In this proposed solution, TSO and DSO keep ownership of their roles, while Equigy fosters collaboration between them.
Pilot projects: harnessing available flexibilities
Currently, in its home markets, Equigy is actively engaging in discussions with TSOs and DSOs to implement its solution. We will report more on these projects in coming months.
For example, Swiss TSO Swissgrid, together with Zurich’s DSO EWZ, has already developed the first TSO-DSO coordination project (RR product). The pilot research project was launched in the second quarter of 2021, and is likely to be completed by the middle of the second quarter of 2022.
This project focused on identifying how flexible energy sources and consumers – such as domestic battery storage systems, heat pump technology or electric vehicles – can be used efficiently to provide ancillary services for the transmission or distribution grid. The aim here is to harness these available flexibilities in the grid for the service that brings the greatest benefit for the security of the entire system.
Equigy’s role is to guarantee participants in the project a secure and transparent exchange of data and information. Equigy’s blockchain technology also offers the opportunity for the extensive automation of the business processes arising from the collaboration between DSOs and TSOs. This will result in lasting improvements in coordination and efficiency.
The need for flexibility in the grid is getting larger all the time, along with the need to find solutions to ease congestion. To this end, interest in TSO-DSO coordination models is growing all over Europe, says Kerkmeester. “If we cannot find these solutions, we cannot drive the energy transition. And Equigy is in a front-running position as a market facilitator to unlock decentralised flexibility for TSO and DSO purposes.”
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