A quick scan in the Dutch newspapers these days highlights a challenge in our electricity system: 

“Transition to sustainable energy encounters lack of power cables”

“Troubles in solar projects show that the energy transition requires better management”

“The grid cannot cope with electricity from local green energy projects”

In the Netherlands, we have one of the most robust electricity systems in the world with a security of supply of 99,99% (source: TenneT). We all assume that once we plug in our laptop or any other electrical appliance, we can immediately use that product. And of course, we expect the same in the future. However, we are in a transition and as the news headlines mention, in a changing system challenges and opportunities arise. 

The distribution system operators (DSOs) are always investing in the low and medium voltage grid to make it future proof. One of their main tasks is forecasting supply and demand in the future and prepare the grid to cope with the expected changes. Before the energy transition, DSOs had to deal with slow and predictable growth. Grid reinforcement by adding more copper cables to the system on weak spots or local bottlenecks was the solution to upgrade the grid for the next decades. Times are changing though, and the old way of doing things crashes.  

The system is changing in both supply and demand 

Firstly, we are in a transition from centralised fossil fuelled electricity production to a more decentralised system with intermitted renewable energy, like local solar farms, local wind power initiatives and rooftop solar systems. Secondly, residential demands are changing significantly. Electrification in heating with heat pumps and electric boilers and electrification of mobility with electric vehicles is increasing the peak demand on local grids. Both trends have a strong negative effect on the stability of the grid and security of supply expected by consumers and this creates a daunting and complex challenge. 

To decrease local congestion created by the intermittency of the renewable supply, the obvious solution is adding local storage to the system, but how do we deal with congestion created by the demand side? 

Grid reinforcement combined with smart solutions 

In the newspaper headlines above, two solutions are mentioned: more power cables and better management. Because the grid investments are not able to pick up the pace of the energy transition, congestion in the grid is inevitable.  

With the rise of internet of things and the ability to control electrical appliance in our growing data driven world, smart solutions could be added to the system. The security of supply could be insured by the control of the very assets that cause the problem in the first place, like heat pumps and EVs.  

A new opportunity: local flexibility market 

Software companies or aggregators are building smart platforms to utilising flexible energy demand on a national level, creating a virtual power plant. The necessity of flexibility on the local level will increase over the next years, allowing new local flexibility markets to arise and grow to significant commercial scale. 

Who will step into this opportunity? And how are we going to legislate this new type of markets?  

The problems mentioned in the newspapers were predicted long ago, but apparently, these problems reached a state where it is big enough to introduce it to the public debate! 

Author: Marnix Paanakker, MSc thesis student at TU Delft and Manager Smart Charging at Faraday Keys