In the future, it is anticipated that growing amounts of both FCR-N and regulating power will come from the demand side in Finland. Current examples of pilot projects include:
Fortum, a Finish energy company, is undertaking aggregation of a large number of household water heaters (electric boilers), with this capacity to be utilised in the FCR markets. With a large number of users, it is possible to deliver a more linear response.
Helen, a Finish electricity retailer, and producer, will be using reserve power (i.e. back up), for example from data centres, hospitals and shopping centres, to participate in the balancing market.
Voltalis, a France-based company, will aggregate a number of demand-side resources in Finland, including households for use in the regulating power market.
Table 17: Illustrative examples of potential revenue from the FCR market in Finland for DR service provi-ders.
The prices per MW utilised in the example are based on an average of the latest 3 years prices in the annual market as displayed in figure 58 and figure 59. The marginal costs of an activation are quite small, and therefore the primary costs associated with these revenues are the upfront investment costs for the frequency measurement and decoupling equipment and the annual costs associated with bidding into the market. These annual costs may form part of the agreement with the BRP and could be reflected in a slightly lower hourly payment after the BRP has received its portion (see section 2 for more on BRPs).
5.4 Relevance in a Chinese context
One of the observations from the development of DSM in Finland is that, some of industrial loads could out-compete traditional power plants (thermal and hydro power plants) in providing fast frequency reserves to the system. This is mainly due to the physical inertia of some of the industrial processes, i.e., the short-term decrease of the electricity supply would not result in the significant reduction of production. Thus, the opportunity cost for responding to the power grid is lower than the market revenue.
About two thirds of electricity demand in China is consumed by industrial loads. Some of the
Outlook for DR going forward
In the future, it is anticipated that growing amounts of both FCR-N and regulating power will come from the demand side in Finland. Current examples of pilot projects include:
• Fortum, a Finish energy company, is undertaking aggregation of a large number of household water heaters (electric boilers), with this capacity to be utilised in the FCR markets. With a large number of users, it is possible to deliver a more linear response.
• Helen, a Finish electricity retailer, and producer, will be using reserve power (i.e.
back up), for example from data centres, hospitals and shopping centres, to participate in the balancing market.
• Voltalis, a France-based company, will aggregate a number of demand-side resources in Finland, including households for use in the regulating power market.
Part II Europe
161 industrial loads (e.g. electrolysis, chemical industry, etc.) could provide short-term responses without causing interruption of the industrial production. The potential of using industrial load for demand response is largely untapped mainly due to the inadequate market mechanisms. As for the North and West regions, energy-intensive industry coincides with the variable renewable generations. The reform of ancillary service market in these regions should take into account of the flexibility potential of industrial loads.162
6. Electric boilers
6.1 Key messages and takeaways
• Changes of balancing market design have been driving the development of electric boilers in Denmark
• Electric boilers have generally been profitable investments based on income from flexibility services.
• First movers often make the most profit in new markets, but increased competition might dilute profits in smaller balancing markets
• Investing in flexibility can lead to profits in markets not foreseen at the time of investment decision
• Operation and participation in the flexibility markets can be partially automatic when using software provided by Balance Responsible Party (BRP) or SCADA system provider
6.2 Background
Today the Danish power generation assets are made up by roughly 5,000 MW wind and 1,000 MW solar power, about 4,000 MW of large CHP extraction plants with an installed electric capacity of typical 200-400 MW pr. plant and then around 2,300 MW of mainly 1-50 MW small-scale backpressure CHP plants (about 450 plants typical with a capacity below 5 MW and then app. 50 plants with capacity above 10 MW).
Electric boilers are typically installed in combination with CHP plants. Around 300 MW of electric boilers (typical between 2 and 12 MW) are installed today at the small-scale backpressure CHP plants. In a total of around 200 MW is installed at some of the large CHP extraction plants who operate electric boilers up to 80 MW of installed capacity. Network capacity and heat demand limit the size of the electric boilers.
Short technical description
An electric boiler offers very high flexibility at a relatively low investment cost. The nominal investment is estimated to be 70,000 EUR per MW for electric boilers larger than 10 MW.
However, the power to heat efficiency is about 95%-98% whereas for instance, heat
pumps offer efficiency rates between 300%-500%. Therefore, electric boilers should not be considered baseload units, but rather reserve capacity units suitable for offering flexibility to electricity markets.
Electric boilers have very low standby electricity consumption and maintenance costs. They can increase and reduce their electricity consumption very quickly making them suitable to deliver flexibility at all short time scales ranging from day-ahead and intraday day markets to the different products in the Nordic balancing market.
Role of electric boilers in the different short-term markets
Electric boilers can deliver down-regulation (through increased consumption) when there is ”too much electricity” in the market, either in the day-ahead market, intraday market or balancing the market. In Table 18 an overview is given indicating the relevance of each of