2016 industre workshop - 3 dsm flexibility assessment methodology

This project has received funding from the European Union’s Horizon2020 research and Innovation programmeunder grant agreement No 646191 - The sole responsibility for the content of this presentation lies with the

authors. It does not necessarily reflect the opinion of the European Union. Neither INEA nor the European Commission are responsible for any use that may be made of the information contained therein

September 12, 2016 Jef Verbeeck - VITO/EnergyVille

Methodology for optimal valorization of industrial flexible electricity consumption

stakeholder meeting:

“Demand side flexibility business case estimation made easy … ”

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Contents

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Part I How calculating a demand response business case?

Part II The need for a simplified methodology

Part III The simplified methodology step-by-step

Part IV On-site renewable energy business case

Part V Conclusions and further steps

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Contents

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How can you make money with flexibility?Part I: What do you need to calculate a demand response business case?

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flexibilitymodel

businessmodels

regulation

market data

Business model

Commodity

Network charges

Commodity

Network charges

FC reserve

FR reserve

R reserve

Imbalance optimization

On-site VRE optimization

Standard contract optimization

Day-ahead optimization

Reserve capacity

BE FR DE IT ES UK

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What is possible from a legal point of view?Part I: What do you need to calculate a demand response business case?

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“Although EU guidelines are quite clear, implementation pace is different…”

flexibilitymodel

businessmodels

regulation

market data

Business model

Commodity Network charges Commodity Network charges FC reserve FR reserve R reserve

BE FR DE IT ES UK



Reserve capacity



business case is viable in exisiting regulatory framework

business case limited viability/restricted in current regulatory framework

business case impossible in existing regulatory framework

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Which price data is available?Part I: What do you need to calculate a demand response business case?

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flexibilitymodel

businessmodels

regulation

market data

Business model

Commodity Network charges Commodity Network charges FC reserve FR reserve R reserve

BE FR DE IT ES UK



Reserve capacity



public price data available

bilateral price data estimates available

(bilateral) price data not available

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How much flexibility is available?Part I: What do you need to calculate a demand response business case?

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flexibilitymodel

businessmodels

regulation

market data

+

flexgraphtotal

flexgraph 1

flexgraph 2

flexgraph 3

flexibilitymodelling



+total

energyconsumption

inflexibleconsumption

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Calculate the business casePart I: What do you need to calculate a demand response business case?

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flexibilitymodel

businessmodels

regulation

market data

businesscase

business case calculation

Business model

Commodity PP PP PP PP PP PP

Network charges PP PP PP PP PP PP

Commodity PP PP PP PP PP PP

Network charges PP PP PP PP PP PP

FC reserve C C C - - C

FR reserve - C/PP C/PP - - C

R reserve C C C/PP - - C

DIP DIP PP DIP/PP DIP DIP

DS DS DS DS - DS



Reserve capacity



BE FR DE IT ES UK

PP

DS

DIP

C

Price profile optimization method (energy + peak)

Dual supplier optimization method (supplier + own production + peak )

Dual imbalance price optimization

Total costs optimization method (capacity only)

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Contents

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Skills for creating a flexibility model …Part II: The need for a simplified methodology

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flexibilitymodel

A flexibility model is the result of a 2 stage process:

selection stage:

• identification of flexibility during a site survey or audit

• requires good top-level understanding of industrial processes with focus on energy flows

modelling stage:

• construction of a mathematical model which describes production process and constraints from energy consumption point of view

• requires understanding of modelling and optimization techniques

The combination of skills is not so obvious

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Business case calculation complexity …Part II: The need for a simplified methodology

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Accuarcy of the business case valuePart II: The need for a simplified methodology

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“Building up interest in demand response is for many companies a long, time consuming, multi-stage process…”

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Accuarcy of the business case valuePart II: The need for a simplified methodology

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“Building up interest in demand response is for many companies a long, time consuming, multi-stage process…”

… but an order of magnitude business case estimation is enough to plant a seed”

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Requirements of a simplified methodologyPart II: The need for a simplified methodology

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1 Being cost effective and time efficient

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1

2

Being cost effective and time efficient

Order of magnitude accuracy estimation is good enough

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1

2

3



No specific modelling and optimization knowledge and tools needed

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Contents

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The naïve approach …Part III: The simplified methodology step-by-step

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“Database with many precalculated business cases”

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A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step

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1

2

3

map

normalize

select

4 scale

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1

2

3

map

normalize

select

4 scale

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Example: generic battery model Part III: The simplified methodology step-by-step

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EmaxEPin Pout

Emin

generic battery model

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rori

bmax

bminb

P

EmaxEPin Pout

Emin


bufferedindustrial process

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rori

bmax

bminb

P

EmaxEPin Pout

Emin


bufferedindustrial process

CHP with a hot water storage tank

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1

2

3

map

normalize

select

4 scale

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Some properties scale very well …Part III: The simplified methodology step-by-step

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1x

“If you can earn 20€/year by trading electricity on the day-ahead

market with 1 car battery … “

Pin = 2 kWPout = 2 kW

Emax = 1 kWh

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1x 20x




Emax = 1 kWh

“… you can earn 400€/year with 20 car batteries!“


Emax = 20 kWh

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“If you can earn 2.000€/year by shifting electricity consumption

from day to night … “

89€/MWh

104€/MWh

15€/MWh

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“If you can earn 2.000€/year by shifting electricity consumption

from day to night … “

“… you can earn 4.000€/year in case the price difference

doubles …“

89€/MWh

104€/MWh

15€/MWh30€/MWh

79€/MWh

109€/MWh

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1

2

3

map

normalize

select

4 scale

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Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step

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“Day ahead electricity price for 1 day …”

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“Buy electricity when cheap …”

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“Well electricity when expensive …”

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“Keep within the battery upper and lower limit”

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“Start and stop with a 50% charged battery”

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• For 1 day in this example: profit = 66,16€

• For whole year: profit = 19.240€/year

• … or an average profit of 2,2€/MW/h

• In case you double the battery size, but not the Pin and Pout, unfortunately this doesn’t scale very well

“But why not putting it in a graph?”

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The normalized business case graphPart III: The simplified methodology step-by-step

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1

2

3

map

normalize

select

4 scale

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Scale back to the real process parametersPart III: The simplified methodology step-by-step

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1x 20x




Emax = 1 kWh

“… you can earn 400€/year with 20 car batteries!“


Emax = 20 kWh

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SummaryPart III: The simplified methodology step-by-step

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“Starting point is an industrial process …”

industrialprocess

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industrialprocess

normalizedreferenceprocess

“ … which will be mapped on a reference process …”

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industrialprocess


“ … which is normalized to an 1MW equivalent …”

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normalizedbusinesscase graph



industrialprocess


normalizedbusinesscase



refe

ren

ce p

roce

sses

business cases


“ … select the correct normalized business case graph and value … ”

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industrialprocess


normalizedbusinesscase



refe

ren

ce p

roce

sses

business cases


“ … and scale back to the correctbusiness case value.”

businesscase

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Contents

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ConfigurationPart IV: On-site renewable energy business case

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At low wind conditionsPart IV: On-site renewable energy business case

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grid to customer 100€/MWh

wind to customer 40€/MWh

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At high wind conditionsPart IV: On-site renewable energy business case

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wind to customer 40€/MWh

wind to grid

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On-site VRE with the generic battery modelPart IV: On-site renewable energy business case

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Emax

E

Emin


inflexibleload+

+

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On-site VRE normalized business case graph RE

Part IV: On-site renewable energy business case

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“ … and if you plot it differently,you even see that there are optimal ratio’s …”

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Contents

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Have the requirements been met?Part V: Conclusions and further steps

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1

2

3




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Have the requirements been met?Part V: Conclusions and further steps

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1

2

3




“ Under the condition that the industrial process can be mapped on a relevant

reference process, the approach is very straightforward “

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Does this really work for complex cases?Part V: Conclusions and further steps

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BC value ≤ BC4 value + BC6 value

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Next steps with the methodologyPart V: Conclusions and further steps

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• Methodology will be tested and refined (if needed) during a number of case studies

• Case studies will take place Q4-2016 till Q2-2017 in the 6 target countries

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• Bringing this methodology to the market is part of the IndustRE project

• A successful webinar was organised as a first information session, showing the potential of the methodology

• Mid 2017, a hands-on workshop will be organized we’ll keep you informed!

Next steps with the methodologyPart V: Conclusions and further steps

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Contact informationPart V: Conclusions and further steps

Jef VerbeeckSenior Researcher Energy Technology+32 14 33 59 [email protected]

Steven Van DeunBusiness Development EnergyVille+32 14 33 58 [email protected]

Thor Park 8310 | 3600 Genk | Belgium

Daan SixProject Manager Energy Technology+32 14 33 58 [email protected]

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