Key Takeaways from SmartEn’s Demand-side Flexibility in the EU Report

October 17, 2022
Demand-side Flexibility in the EU Report

On July 14, 2021, the EU endorsed the “Fit for 55” legislative proposal as a part of the EU green deal roadmap. The proposal aims to cut the EU’s greenhouse gas (GHG) emissions by 55% (compared to the 1990 levels) by 2030.

Between 1990 and 2020, the EU saw a reduction of GHG emissions by 34%. It would, therefore, take a further 21% reduction between 2020 and 2030 to actualise Fit for 55. What if there were a way to accomplish this quickly while simultaneously ascertaining a two-way satisfaction between the grid and the consumers it serves?

In September 2022, Smart Energy Europe (smartEN) published an expert study by Det Norske Veritas (DNV) that quantifies the likely benefits of fully deploying demand-side flexibility (DSF) in the EU by 2030. The study shows how much costs, energy, and GHG emissions could be saved within the next eight years if DSF is fully implemented across Europe. The exposition further discusses how Europe could achieve these remarkable feats, which are briefed below. But first of all, what is DSF?

DSF is an energy management method in a decentralised energy system that enables seamless interactions between energy suppliers/aggregators and customers (prosumers). Energy suppliers/aggregators send real-time signals to active customers (prosumers), who then adjust their consumption and generation in a time-dependent method that helps grid operators manage end-to-end demand and supply effectively.

Major Takeaways from the Study - Demand Side Flexibility Technologies

DSF is embedded in several technological agents—without which it will be impossible to deploy DSF and harvest its numerous benefits. As a result of this entanglement, DNV modelled the technologies through which DSF could be effectively utilised and how each of these technologies would contribute to the EU’s energy and environmental management systems by 2030. These technologies include:

  • Smart Charging and Vehicle-to-Grid (V2G)—allow EV owners to adjust their vehicles’ charging behaviour and sell electricity back to the grid either as revenue or as savings. DNV estimates the availability of a total of about 60 million EVs in the EU by 2030.
  • Behind-the-Meter Batteries (BTM)—are storage systems that collect and store energy for use during peak demand periods. DNV projects a total of 10.9 GW of BTM batteries in the EU by 2030.
  • Industrial Demand-side Response—industrial load curtailing above certain electricity prices. DNV estimates a total of 21.7 GW by 2030.
  • Residential Electric Heating—a shiftable load that depicts the heating electricity demand in residential and commercial spaces. It is considered to account for 449 TWh by 2030.
  • Industrial Electric Heating—similar to the industrial DSR, this load represents curtailable industrial heating demand. It is estimated to be 7 GW by 2030.
  • District Heating CHP—a generator that deviates upwards or downwards from daily generation requirements depending on what the consumer wants. This technology will accumulate a total of 56 GW by 2030.
  • Industrial Heating CHP—operates similarly to the district CHP but for industrial spaces. DNV included 19 GW of industrial CHP by 2030.

Potential Benefits of DSF

The benefits accompanying the full implementation of DSF are split in two: the direct benefits—which are reflected in the prosumer’s energy bill either as savings or revenues—and the indirect benefits—system and environmental changes that will positively affect all prosumers.

Direct Benefits of Demand Side Flexibility

The following image contains a table that illustrates the potential direct benefits of each DSF technology when applied by 2030. It also shows how these outputs could differ from the results obtained without DSF.

Source: SmartEN

Emphasizing smart charging / V2G technology, the EU’s plan to phase out fossil fuel vehicles by 2035 and vehicle owners’ reluctance to go electric due to misconceived high EV total cost of ownership and range anxiety has created conflict in the automotive industry.

This is why the emergence of smart charging and V2G has been crucial to mitigating these challenges. Smart charging employs an EV’s profile to help the owner charge at lower costs during off-peak hours. What’s more, V2G and V2X, offshoots of smart charging, enable an EV owner to sell dormant energy to the grid and to other EVs. These activities, in turn, contribute massively to lowering the strain on grids, addressing range anxiety, and lowering EV TCO.

Indirect Benefits of Demand Side Flexibility

The indirect benefits, which are published in the table in the image below, include:

  • The reduction of total costs to serve load to consumers.
  • The cutting of generation capacity costs
  • Reduction in grid infrastructure investment
  • The trimming of costs for system balancing.
  • CO2 emissions decrease.
Source: SmartEN

The mainstay of the “Fit for 55” package is GHG emissions, and the importance of smart charging in this area cannot be overstated; how? Research shows that EVs alone could reduce GHG emissions in Europe by 36% by 2050. Furthermore, smart charging offers sufficient incentives through vehicle interoperability, reduced charging costs, and charging convenience, all of which are tipped to contribute to mass EV uptake.

Report Recommendations

Upon simulating the data and acquiring favourable results, DNV recommends that the EU commission:

  • Monitor markets in a structured and cohesive way on the availability and utilisation of DSF.
  • Generate a sufficient methodology that will aid the quantification of potential infrastructure savings from fully utilising DSF.
  • Study comprehensive market designs that can pull off optimal results from DSF deployment.
  • And analyse energy efficiency prospects of deploying DSF.

Conclusion

The report states that an average EV owner could save up to €176/year through smart charging and V2G. This represents only the threshold saving, and as an EV fleet manager, you can save or earn over ten times more; how? FLEXO smart charge.

The platform enables you to mitigate exorbitant charging costs and provides you with additional revenue options of up to €1,000 per year on every EV.

Furthermore, the core value of DSF is the productive management of flexible assets—a service that our FLEXO community manager is perfectly suited for. With our community manager, distribution service operators (DSOs) and utilities need not worry about being overwhelmed by their growing community of prosumers.

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

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