According to the European Network of Transmission System Operators for Electricity (ENTSO-E), the body responsible for managing cross-border energy exchanges in Europe, the 2011-2012 winter was very mild. Temperatures were warmer than average, and snowfall was lower than average, keeping energy demand for heating far below normal. The ultimate effect was to reduce total electricity exchanged between the European Union (EU) countries, as well as the energy settlement prices.
The main exception was a serious cold front and weather system which hit in early February of 2012, and sent a significant shock through the electric grid. Record snowfalls and low temperatures across most of Europe, as well as northern Africa, caused a significant increase in energy demand. Electricity import prices spiked above the ENTSO-E average of approximately €70 per megawatt-hour (MWh), in some cases to more than €1000/MWh (about $1300/MWh). With an unusually cold winter predicted for 2012-2013, the European grid may be in for more volatility this year.
The European grid is becoming increasingly interconnected, which should be a boon for managing extreme weather events. Further, the flexibility of the grid increases as intermittent renewable generation comes online. While a more robust transmission grid can deliver electricity where it is most needed, it does not address the total generation/load ratio. Much ado has been made about potentially insufficient generation capabilities in the United Kingdom in the near future. However, with gas and coal prices forecast to increase, simply increasing traditional generation capacities may not be enough, or may prove to be economically unfeasible. Furthermore, tightening EU-wide environmental regulations will continue to reduce the viability of coal and petroleum plants for electricity generation.
ENTSO-E, meanwhile, suggests that developing enhanced demand response (DR) services could be the most economically efficient way to address large surges in demand. Such programs encourage electricity consumers to reduce electricity usages during times of high demand. However, there are few DR systems currently in place; Germany’s four transmission system operators have no specific DR programs, while the United Kingdom and the Netherlands have only limited DR capabilities.
The other relatively cheap option to address potential generation shortcomings is virtual power plants (VPPs). Essentially, VPPs can aggregate unused generation capacity in certain parts of the grid and deliver it to the parts with excess load. VPPs are gaining traction in Europe through companies like Spirae, which set up a 76MW VPP in Denmark in 2010. The system is operated by Energinet.dk and consists mostly of combined heat and power plants. Since wind power represents a large portion of Denmark’s power base, the Spirae VPP has helped to firm that generation.
Employing similar networks to address energy shortfalls on other parts of the larger European grid is a plausible extension of this technology. While the dearth of governmental standards may inhibit VPPs from sending power directly to other countries to meet demand, individual countries may be able to maximize their electricity production and capitalize on increased power exports through VPP adoption within their own borders. If the coming winter turns out to be a hard one, these technologies could prove critical.
Tags: Demand Response, Policy & Regulation, Smart Grid Practice, Utility Innovations
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