Press Release, Berlin

dena's Flexible Grid (Netzflex) Study: parallel use of storage systems for electricity market and grid operation reduces costs of energy transition

Kuhlmann: 'The potential for innovation and new business models should be the focus of the next legislative period.'

The multiple use of storage systems and other flexible technologies can reduce energy transition costs significantly and avoid an expansion of the grid. This is the result of the Flexible Grid Study conducted by the Deutsche Energie-Agentur (dena) – the German Energy Agency. If flexible technologies were not just focused on the market, but were also used to ease the burden on the electricity grid, this would cut economic costs and reduce the need for expansion in the distribution system. At the same time, grid and plant operators would benefit from more cost savings – in other words, greater opportunities for revenue. dena concludes that the parallel use of flexible technologies has the potential to link the electricity market with grid operations, and thus provide stimulus for innovation and new areas of business. At the moment, though, legal and regulatory frameworks are preventing any such optimisation.

Energy transition needs an intelligent link between market and grid

'For the first time, we've run through the multiple uses of flexible technologies for various use cases. The results are clear: if parallel use is a success for both market and grid, the result will be a financial 'win-win-win situation' – for the providers of flexible technologies, for network operators and for the consumer,' said Andreas Kuhlmann, dena’s Chief Executive. 'There will need to be a bridge between the market and the electricity grid. In that way a large, new playing field can be opened up for product innovation. The players are already on the field, as the cross-sectoral participation in our Flexible Grid Study has shown. The ball is now in the hands of the legislators; for example, for the further development of a system of grid fees for the multiple use of flexible technologies.'

Make grid fees more flexible and enable product flexibility

dena's Flexible Grid Study shows that plant operators can contribute to the stabilisation of the grid by utilising their systems in such a way as to avoid overloading the electricity grid. The grid operator saves on costs, because there is so much less need for expansion in the electricity distribution system. At the moment, though, plant operators have no financial incentives to take any such action. This is why dena is calling for the existing structure of grid fees to be made more flexible. Tariffs should be created which are more dynamically orientated towards the prevailing load on the power lines. A further incentive for the plant operator could be the development of product flexibility. This means that the grid operator would be able to provide remuneration under fixed terms for the contribution made by flexible technologies towards reducing the load on the grid.

Scope for action and incentives for grid operators

At the same time, the grid operator ought to have the option by law of accessing the plant operators' flexible technologies, in order to be able to manage and stabilise the electricity grid as necessary. Up to now, though, there have been more attractive incentives for investments in conventional grid expansion than in innovative processes and smart technologies. So legislators need to create a legal framework that will define standardised product flexibility and use.

dena's Flexible Grid Study investigates the multiple use of flexible technologies

dena's Flexible Grid Study investigates how flexible technologies can be used repeatedly – so-called 'multi-use'. dena's analysis is the result of six case studies which are representative of the possible applications of flexible technologies, and take into account all levels of the distribution system. A case in point from the study: A plant operator mainly uses a battery in combination with a photovoltaic system, in order to reduce their demand for electricity. In the 'multi-use' use case, they utilise their system for business on the electricity market, and also stabilises the electricity grid.

dena's Flexible Grid Study was conducted with 23 partners collaborating across sectors with grid operators, producers and project developers of renewable energy, as well as manufacturers of storage technologies.

The study, a background paper for the press, and other documents and information

Background paper

Executive Summary