Denmark is working towards 85% renewables by 2040-most of this will come from offshore wind power. Since its utility, DONG Energy, is the world’s largest operator of offshore wind power, this goal is attainable, says Anders Birke, Senior IT Architect, DONG Energy, Denmark, in his presentation, Data Sourcing Including Distributed Generation, at European Utility Week 2013.
Already, thermal capacity has been reduced by 30% and the number of offshore wind power projects continue to escalate.
Denmark’s power consumption follows a predictable pattern but wind power production does not. DONG Energy is searching for ways in which surplus wind power can be used to create more value for its consumers. Currently, a great deal of surplus wind power is being sold cheaply to Denmark’s neighbours.
Balancing the energy mix
Since the system requires a balanced mix of resources to remain stable, Denmark is using biofuels and gas as a temporary solution to the balancing of the energy mix. There are also strong connectors to its neighbours, Sweden and Norway, for hydropower. Thermal plants are also in use but they will be closed down..
Additionally to create more value, the country is using hydropower, extended pumped hydropower, and power in district heating - in Denmark 50% heating is supplied by district heating.
Trends affecting Denmark towards 2020
Power consumption in Denmark is set to increase-This will increase drivers, energy efficiency, electric vehicles, and using electricity to heat.
The power plant becomes less flexible-Conversion from coal to biomass power plants will reduce flexibility
Society is deeply dependent on stable power supply
The proportion of unstable electricity output rises-Denmark has far-reaching plans to expand with additional wind farms and photovoltaics
More unpredictability in the load of the grid-This is due to the increase in the share of distributed generation. There will be more fluctuating power consumption
The smart grid enables flexibility
In Denmark, the need for flexibility is mostly due to the high production from wind turbines, large mandatory generation from combined heat and power plants, as well as handling new types of consumption such as electric vehicles and heat pumps. The smart grid will also help by integrating renewable energy, secure power supplies, streamlining operations like meter reading, managing local production, and the integration of electric vehicles.
Virtual Power Plants
The virtual power plant is an important part of the low carbon energy system of tomorrow. The plant provides services that are necessary for integrating and increasing the share of intermittent renewable energy in the electrical system of the future. For instance, decentralised energy resources, such as small power producing plants, can be used to balance the grid. According to Mr Birke, there is plenty of room in the market for short term grid balancing.
The virtual power plant is able to deliver services in the timeframe from a few minutes to a few days. It also saves hydropower and biomass capacity when it comes to the task of long term balancing.
Virtual power plants will create services out of controlling decentralised energy resources such as:
Power producing units like hydro plants or emergency generators
Power consuming units like drainage pumps, grow lights, heating, ventilation and air conditioning in large buildings, battery units and refrigerated warehouses. This also includes aggregated smaller units like electric vehicles from one electric vehicle operator.
The virtual power plant will deliver services similar to the traditional power plant. Consumers will be helped to optimise their consumption on price or green profile and share profit.
Each distributed energy resource serves multiple purposes on the virtual power plant and can produce several services, depending on the type of distributed energy resources.
Challenges of a commercial Virtual Power Plant implementation
There are a number of challenges when signing deals with distributed energy resource owners:
Communicating complex issues with DER owners and establish trust.
Specialised sales people needed
Reluctance from local operational staff
Need of standardized criteria to determine DER’s properties
Challenges establishing control of distributed energy resources:
Driving down installation and operation –cost is key to success.
Standards are missing-technical and functional
Challenges operating a Virtual Power Plant
To understand and model flexibility in a specific type of distributed energy resource is not easy, explains Mr Birke. To secure this, the primary purpose of distributed energy resources is not compromised. It is important to gain maximum flexibility from demand energy resources.
Mr Birke points out that hard work is part of the solution, “A number of processes, parties and different types of distributed energy resources have to work together-this requires quite an effort to establish.”
The challenges are as follows:
Regulation and standards in Europe was not made with Virtual Power Plants in mind- rules for how small Distributed Energy Resources can access power market has yet to be developed
If there is no market to bid into, there will be no incentives for providing flexibility from Virtual Power Plants-a regulatory framework differs between European countries and ancillary services markets differ significantly. Some services have no market at all.
Market organisation is important-Virtual Power Plants cannot make a bid a month in advance. With auctions close to activation time, a distributed energy resource can be used for multiple services or multiple bids.
Barriers to entry-All the detailed requirements for participating in the power markets is made for large plants.
Mr Birke suggests that standardized communication protocols would also keep the costs down and although Denmark’s power sector faces a mammoth challenge, the country can’t afford not to change the way in which they produce and use energy.