Collaboration between companies can enable the required flexibility in the local electricity grid

The increasing electrification in society leads to higher peak loads on the electricity grid. Some people are warning for an energy transition that is too fast. Others are hopeful for a fully electric future. In a report commissioned by the Dutch Topsector Energie program, more than 100 potential solutions are offered, all focusing on maximizing the capacity of the existing or upcoming electricity network to accelerate the energy transition. In a 12-part series, Innovation Origins spotlights the twelve most promising solutions. This is part 6: Facilitating Flexibility in Companies and Business Parks.

More and more companies are facing full networks, making expansion or sustainability challenging. The construction of new connections for both consumption and supply is either impossible or takes a long time, sometimes up to 5-10 years for large consumers. An alternative to new connections is to act flexibly within the possibilities. A more active role and increased collaboration between companies are essential to achieve such flexibility. However, network operators and legislators must facilitate such cooperation and flexibility practically and legally.

Many companies are already motivated to work on solutions for better utilization of the electricity network. They want to collaborate and balance locally. One obstacle is that current legal rules and frameworks do not allow this. Another problem is that the individual business case for smart solutions is not always strong, even though there is a good collective or societal business case. The solution aligns well with the need for more self-organization by companies. Thinking more from a base-load connection than peak-load encourages companies to find solutions for their peaks independently – with storage – or with others – energy sharing – without excessively burdening the network.

Matching generation and consumption in time and place (local balancing) is gaining more attention as a solution for congestion. Companies can play a role in this when they can collaborate. However, current rules limit the possibilities. For example, companies are not allowed to exchange electricity directly – it must be done through a contract with the network operator. Sometimes, even within the same company (one location), it is impossible to balance generation and consumption if they occur on two different connections.

Solution

The solution is to give companies more control over their electricity needs and how they dynamically fulfill them. They have (or can get) a better view of their energy profile than network operators. They can also arrange things much faster among themselves than through the government or network operator. Network operators are also limited in their tools. New contract forms are on the way, such as group contracts. But this takes time. The first important step is to inform companies about their current options.

But the bottom line remains: More cooperation requires new legal frameworks and new organizational agreements. In terms of legislation and regulation, it is necessary to make room for exchanging electricity or sharing connection capacity. For energy sharing, (European) regulations are being developed from which companies can benefit. But again: that takes time.

Heat, hydrogen, and (green) gas

Ideally, local cooperation in the energy economy would be considered holistically, including heat, hydrogen, and (green) gas. However, that also makes the issue much more complex. Experiments in a simple context focusing primarily on electricity supply will likely deliver learning points more quickly. New experiments with energy hubs give companies room to set it up themselves. To reduce long-term energy risks, it is helpful to take action now for local cooperation; transmission capacity will remain scarce.