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Independent aggregators in the flexibility market of the future

Fingrid’s pilot projects with Helen and the French company Voltalis are looking for a model and operating methods for independent aggregator activities in the balancing power and reserve markets.

The increased use of renewable energy and growing need for flexibility mean that new operating models have to be developed for the electricity market. When the number of reserve providers outside of the supply chain also increases, new rules will be needed for this situation. Utilising the large flexibility potential will benefit all parties, because this will cost-effectively maintain the power balance also in the future.

In 2017, Fingrid launched aggregation pilots in the balancing power market with industry operators and stakeholders. The pilots will examine how flexible capacity from different power sources is aggregated and combined for the balancing power market.

“The definition of an independent aggregator is not clear and the piloting aims at finding common operating methods for the electricity market of the future. The pilots will examine how an independent aggregator could sell flexibility,” says Specialist Laura Ihamäki from Fingrid.

Fingrid’s target is for the electricity market to function efficiently and according to rules that are fair for all parties. There must be enough operators and supply of flexibility. The purpose is to find models that will allow flexibility to be utilised in the best possible manner. Fingrid wants to involve even the smallest operators, including households, in flexibility.

“The challenges in the independent aggregator model include information exchange between parties, handling of imbalances, and the requirements for developing data systems. The pilots are being used to find answers to these and other questions.”

Development work is important.“An independent aggregator model will make it possible to really bring more flexibility to the electricity market as well as a power system that supports renewable energy production,” says Ihamäki.

Finland is a pioneer

Fingrid’s aggregator pilots are being implemented in 2017–2018, and the results will be available in 2019 at the latest. The partners are Finnish electricity supplier and producer Helen Oy and  the French company Voltalis S. A. It operates some 100,000 French households and smaller commercial sites. In the Fingrid pilot, Voltalis will concentrate on aggregation of resources from the demand-side in Finland, including households.

Fingrid’s development work has
 attracted attention on an international scale:

“There has been a lot of interest in our projects in Europe. Finland is a European pioneer in terms of utilising flexibility in the power system,” explains Ihamäki.

The pace of development in the energy industry has been rapid: Five to ten years ago, no one could have predicted that flexibility would also be purchased from households. Flexibility has traditionally been come from large companies and production plants.

“The possibilities to regulate the power system have been production-centred. This is still visible in the rules governing market operators, but we have developed and will continue to actively develop rules in a more technology-neutral direction,” says Laura Ihamäki.


Helen harnesses reserve power machines

Helen Oy’s pilot will involve testing the purchase of flexibility from new types of customers and operating in the area of other balance responsible parties.

Helen currently offers demand response service to companies and that side has gotten off to a good start – there is huge interest. The target markets in demand response are frequency-controlled reserves. This pilot extends the model in a natural direction – to the balancing power market,” explains Development Manager Markus Logren from Helen.

Flexibility is purchased from companies that have reserve power equipment or controlled consumption, which include data centres, hospitals and shopping centres. Reserve power engines can be used to balance the grid if necessary. In practice, this need occurs a few times per year. Some of the monthly test operations can be replaced with flexibility operations.

“We’re focusing on reserve power in the pilots, but Helen also welcomes consumption sites as flexibility customers,” emphasises Logren.

“The development direction of the electricity market seems to be moving towards independent aggregators. This will also provide traditional electricity suppliers with opportunities to develop new services,” says Logren.

“Developing flexibility utilisation is globally significant in terms of future energy production. We can gradually move to a low-carbon energy system and genuinely slow climate change.” •