Customers are gaining more and more influence over the energy system. For instance, an increasing number of customers are purchasing solar panels, wind turbines or biogas installations to produce their own energy. In addition, growing numbers of households and businesses are opting for electric transport or heat pumps. The challenge is to facilitate this decentralisation process, while minimising the total costs for everyone.
It is important to give them incentives to make choices that do not only work for themselves, but for the overall energy supply as well. More specifically, customers need to be encouraged to buy energy when supply is abundant, sell energy when it is scarce and refrain from using the energy network when it is congested. This calls for variable energy pricing (the scarcer energy is at a certain time of day, the higher the price) and flexible transmission tariffs (based on peak loads in the transmission networks) for all customers. This makes it attractive for customers to decide per 15-minute or hourly time slot whether they want to use, sell or store energy. Customers will only do this if it is really easy - which means that the decision-making process must be entirely automated.
Pilot with flexible tariffs
As a further step in this direction, we teamed up with the VEH Homeowners' Association and energy supplier Qurrent in 2015 to carry out a pilot where a small group of consumers are offered a smart energy contract, based on hourly rates for power and daily rates for gas. Participants in the pilot can see the hourly prices for the next day via an app and plan their usage accordingly. Good planning can produce considerable savings. This gives customers a financial incentive not to use the network at peak times, which, in turn, helps us to prevent costly investments in network upgrades. The smart meter, which enables the customer to track his usage, is a crucial link in this project. Read more about the smart meter under pillar 3.
Sun City ('Stad van de Zon')
The migration towards renewable energy calls for a smart energy market, where customers can plan their energy usage according to the availability of e.g. wind or solar power. Alliander, together with several partners, has set up the Universal Smart Energy Framework (USEF) for this purpose. Using an international market standard, USEF makes energy flexibility a tradable commodity. USEF describes the structure and mechanisms of the flexibility market, the market roles and the interaction between these roles, among other aspects.
In 2015, we started a pilot with USEF in a residential area in Heerhugowaard where a lot of local solar electricity is generated. In this neighbourhood - aptly named Sun City - 200 households are connected to an energy system that communicates with smart in-home appliances such as electric boilers or heat pumps. The system forecasts the supply and demand of electricity so that participating households can plan their energy usage. For instance, they can use solar power to heat water in their boiler during the day and store it for a hot shower in the evening. And they do not need to do anything themselves: the smart system automatically instructs the appliance to store or use energy at the correct time. This results in substantial savings; in the future, these savings can be passed on to households. Within the pilot, the financial benefit is divided among the 200 participating households every month.
As noted, matching supply and demand of electricity is becoming more difficult. Storage is one solution that can help us manage peaks and troughs. The possibilities for storing energy are still limited, but we are closely monitoring the rapid advances in this area. Through alliances and experimental projects, we can assess the impact on our work and the added value for customers. Apart from the technology, we are focusing specifically on how energy storage can add value for customers. Because added value is a key driver of progress in this area.