Energy Players and Their Roles in the Balance of Power

January 23, 2023
Europe Energy players

With Europe gunning for a 55% cut in carbon emissions by 2030 and climate neutrality by 2050, the shift of electricity demand from carbon-based energy sources to majorly renewables is likely to cause unrest in our grids. 

This unrest is hugely credited to: 

(a) the sudden imbalance of electricity demand and supply - with consumers demanding more electricity than the grid can supply, and 

(b) the unpredictable nature of renewable energy sources - whose energy must be used as soon as it is generated.

In 2022, the International Energy Agency (IEA) proposed that a practical pathway towards ensuring balance and energy sustainability is power system flexibility. This is to manage the rising electricity demand and prices that may cause damage to our existing energy management systems - which aren’t yet as flexible as they need to be.

How can we achieve this flexibility? 

Who are the parties involved in achieving this flexibility? 

How do they work together to achieve this? Keep reading; we’ve explained them in this blog.

What is Power System Flexibility, and How Does It Contribute to the Balance of Power?

Power system flexibility or distributed flexibility is the ability of flexible assets connected to the grid to adjust their electricity generation or consumption patterns to match the grid’s needs.

These assets can be refrigerators, air conditioning systems, heat pumps, electric vehicles (EVs), batteries, etc. These assets respond to signals to establish a balance in demand and supply. With these signals, they can change their consumption, storage, or generation capacities to meet the grid’s demands.

Ten(10) Energy Players Responsible for the Balance of Power

The Universal Smart Energy Framework (USEF) gives comprehensive information (highlighted below) on who these players are, their roles, and their interoperability.

1. The Active Customer or Prosumer

A prosumer is a customer who actively participates in the energy system. It is to be noted, however, that not all those who produce energy are prosumers and not all prosumers produce their energy. A customer qualifies as a prosumer if they:

  • Generate renewable energy for personal consumption.
  • Are part of an energy community.
  • Participate in a net-metering system.
  • Store excess energy for future use or to give back to the grid.

Each activity above contributes to energy flexibility through renewable energy generation, net metering, energy sharing, and storage.

2. The Aggregator

When prosumers generate flexibility through any of the activities mentioned above, they need a medium to deliver this flexibility to the rest of the energy system. This medium is the aggregator.

The role of the aggregator is to broker an agreement between prosumers and other players such as the TSO, DSO, and BRP (all explained below). Specifically, what the aggregator does is:

  • Take note of Flexibility Requesting Parties (FRP) within the energy system. The FRP are those who have the most urgent need for flexibility.
  • Accumulate or aggregate flexibility from prosumers and sell to the TSO, DSO, and BRP, who facilitate the delivery to the FRP.
  • Remunerate prosumers for the flexibility provided.

3. The Energy Supplier

As the name suggests, the supplier sources energy and supplies it to its customers. The relationship between the supplier, aggregator, and prosumer is mutual. The supplier sometimes purchases flexibility from the aggregator and prosumer while supplying energy to the prosumer.

4. The Balance Responsible Party (BRP)

For the balance of power to occur, the expected energy demand must match the supply. Anything short of this results in an imbalance that could disrupt the entire energy system.

As a result, all energy players are held responsible for the imbalances they cause (known as balance responsibility). The BRP is the energy player, such as the supplier or producer, who ensures that balance of power is met in their positions.

A supplier, for instance, must try to even out the amount of energy it sources and the amount of energy it releases into the market within a given time frame. 

5. The Distribution System Operator (DSO)

The DSO offers real-time management and distribution of energy from all its sources to the customers. The DSO is responsible for developing a functioning distribution system that encompasses the concerned players—prosumer, TSO, and CMSP (see below).

6. The Transmission System Operator (TSO)

Where the DSO is responsible for maintaining electricity distribution systems within a given region, the role of the TSO is to transmit electricity from the producers to the DSO and industrial prosumers over high-voltage grids.

The TSO is the primary orchestrator of balance through different capacities, such as regulating, reserve, and emergency capacities. One of the ways the TSO achieves this is by purchasing sufficient flexibility from aggregators.

7. The Producer

The energy grid is the centrepiece of energy demand, supply, and, consequently, flexibility. The role of the producer is to keep the grid active by constantly feeding energy into it. This includes sourcing energy from renewables and feeding them into the grid.

8. The Energy Service Company (ESCo)

An ESCo provides energy services to prosumers. These services include energy management, cost savings, maintenance and operation of flexible assets, energy-efficiency evaluation, and energy optimisation.

The most important aspect of flexibility is energy management—which the ESCo implements quite adequately through the maintenance of flexible assets.

9. The Balancing Service Provider (BSP)

The role of the BSP is to respond to unforeseen changes in the grid. Sometimes, unexpected fluctuations occur in the grid due to weather vagaries, heavy migration, disasters, etc. In such cases, the BSP, typically a generator or a demand facility, supplies from or demands into its reserve to help manage this fluctuation.

Recall that the TSO is primarily tasked with maintaining balance over high-voltage grids. During these fluctuations, the BSP is contracted by the TSO through the aggregator to provide balancing services or flexibility to the grid.

10. The Congestion Management Service Provider (CMSP)

There are times when the DSO and the TSO face constraints in their attempts to meet customer energy demands. These constraints result in congestion when the demands outbalance the energy available.

To restore the balance of power, these two energy players must source flexibility, but they must do it through the CMSP.

The CMSP communicates flexibility availability to the TSO and the DSO and manages flexibility transactions between them.

The Energy Players Ecosystem Summary

While some of these may have been mentioned above, below is a quick rundown of the interoperability of the energy players, according to USEF.

  1. The prosumer enters into contracts with four different energy players. These contracts include flexibility purchase with the aggregator, connection with the DSO, energy supply & purchase with the supplier, and auxiliary service with the ESCo.
  2. The aggregator transfers energy to the supplier and purchases energy from the prosumer.
  3. The energy supplier sells energy to and purchases energy from the prosumer. They can make the purchase either directly or through the aggregator.
  4. The BRP purchases energy from the producer. The BRP also offers balance responsibility services to the supplier and ancillary services to the TSO.
  5. The DSO receives energy from the TSO and distributes it to the prosumer. In addition, the DSO takes flexibility services from the CMSP.
  6. The TSO transmits energy to the DSO and industrial prosumers and gets balancing services from the BSP.
  7. The producer sells energy to the BRP.
  8. The ESCo offers energy and flexible assets maintenance services to the prosumer.
  9. The BSP helps TSO to achieve balance by offering flexibility.
  10. The CMSP manages flexibility transactions on behalf of the TSO and DSO.

There’s one more piece - the Flexibility Orchestrator

At this juncture, the balance of power and the players responsible for it are no longer a foreign concept. It is also worth adding that what aids revolutionary concepts is usually great technology.

This is where our flexibility orchestrator plays its intermediary role. With Hive Power’s FLEXO, energy players can achieve a balanced power system through the following:

EV Smart Charging Flexibility Control

EVs are collectively one of the most important flexible assets in Europe. According to SmartEN, EVs can provide flexibility worth 106.3 TWh by 2030. Flexibility providers like aggregators and ESCos can leverage this potential with Hive Power’s FLEXO Smart Charge.

The interface, which can be mobile or on a PC, enables EV owners to adjust their vehicle’s charging behaviour using its charging profile. With this, they can partake in demand response. In addition, they can also store up energy which can later be sold as flexible energy to suppliers.

Community Management

ESCos and DSOs, whose primary beneficiaries are prosumers, must find a way to manage their targets. This is equivalent to managing a community of prosumers.

Doing this may be daunting without the right technological apparatus, which is why Hive Power’s FLEXO Community Manager exists.

The platform allows DSOs and ESCos to have their communities in their pockets or on their screen. As a result, energy services and flexible asset monitoring have become a seamless venture.

Final Notes

While Europe is arrowing towards being a climate-neutral continent, the road to this goal is likely to be rife with demand-supply imbalances as energy consumers will have to bid their time to adjust from traditional sources of energy to renewables.

To contain this foreseeable scenario, certain key energy players must do their part in establishing a constant balance of power.

Book a slot with our team to understand how Hive Power FLEXO solutions can power your flexibility projects.


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