2016 industre workshop - 3 dsm flexibility assessment methodology
TRANSCRIPT
This project has received funding from the European Union’s Horizon2020 research and Innovation programmeunder grant agreement No 646191 - The sole responsibility for the content of this presentation lies with the
authors. It does not necessarily reflect the opinion of the European Union. Neither INEA nor the European Commission are responsible for any use that may be made of the information contained therein
September 12, 2016 Jef Verbeeck - VITO/EnergyVille
Methodology for optimal valorization of industrial flexible electricity consumption
stakeholder meeting:
“Demand side flexibility business case estimation made easy … ”
www.IndustRE.eu
Contents
Slide 2
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
Contents
Slide 3
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
How can you make money with flexibility?Part I: What do you need to calculate a demand response business case?
Slide 4
flexibilitymodel
businessmodels
regulation
market data
Business model
Commodity
Network charges
Commodity
Network charges
FC reserve
FR reserve
R reserve
Imbalance optimization
On-site VRE optimization
Standard contract optimization
Day-ahead optimization
Reserve capacity
BE FR DE IT ES UK
www.IndustRE.eu
What is possible from a legal point of view?Part I: What do you need to calculate a demand response business case?
Slide 5
“Although EU guidelines are quite clear, implementation pace is different…”
flexibilitymodel
businessmodels
regulation
market data
Business model
Commodity Network charges Commodity Network charges FC reserve FR reserve R reserve
BE FR DE IT ES UK
Standard contract optimization
Day-ahead optimization
Reserve capacity
Imbalance optimization
On-site VRE optimization
business case is viable in exisiting regulatory framework
business case limited viability/restricted in current regulatory framework
business case impossible in existing regulatory framework
www.IndustRE.eu
Which price data is available?Part I: What do you need to calculate a demand response business case?
Slide 6
flexibilitymodel
businessmodels
regulation
market data
Business model
Commodity Network charges Commodity Network charges FC reserve FR reserve R reserve
BE FR DE IT ES UK
Standard contract optimization
Day-ahead optimization
Reserve capacity
Imbalance optimization
On-site VRE optimization
public price data available
bilateral price data estimates available
(bilateral) price data not available
www.IndustRE.eu
How much flexibility is available?Part I: What do you need to calculate a demand response business case?
Slide 7
flexibilitymodel
businessmodels
regulation
market data
+
flexgraphtotal
flexgraph 1
flexgraph 2
flexgraph 3
flexibilitymodelling
flexibilitymodelling
flexibilitymodelling
+total
energyconsumption
inflexibleconsumption
www.IndustRE.eu
Calculate the business casePart I: What do you need to calculate a demand response business case?
Slide 8
flexibilitymodel
businessmodels
regulation
market data
businesscase
business case calculation
Business model
Commodity PP PP PP PP PP PP
Network charges PP PP PP PP PP PP
Commodity PP PP PP PP PP PP
Network charges PP PP PP PP PP PP
FC reserve C C C - - C
FR reserve - C/PP C/PP - - C
R reserve C C C/PP - - C
DIP DIP PP DIP/PP DIP DIP
DS DS DS DS - DS
Standard contract optimization
Day-ahead optimization
Reserve capacity
Imbalance optimization
On-site VRE optimization
BE FR DE IT ES UK
PP
DS
DIP
C
Price profile optimization method (energy + peak)
Dual supplier optimization method (supplier + own production + peak )
Dual imbalance price optimization
Total costs optimization method (capacity only)
www.IndustRE.eu
Contents
Slide 9
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
Skills for creating a flexibility model …Part II: The need for a simplified methodology
Slide 10
flexibilitymodel
A flexibility model is the result of a 2 stage process:
selection stage:
• identification of flexibility during a site survey or audit
• requires good top-level understanding of industrial processes with focus on energy flows
modelling stage:
• construction of a mathematical model which describes production process and constraints from energy consumption point of view
• requires understanding of modelling and optimization techniques
The combination of skills is not so obvious
www.IndustRE.eu
Business case calculation complexity …Part II: The need for a simplified methodology
Slide 11
business case calculation
www.IndustRE.eu
Business case calculation complexity …Part II: The need for a simplified methodology
Slide 12
business case calculation
www.IndustRE.eu
Business case calculation complexity …Part II: The need for a simplified methodology
Slide 13
business case calculation
www.IndustRE.eu
Accuarcy of the business case valuePart II: The need for a simplified methodology
Slide 14
“Building up interest in demand response is for many companies a long, time consuming, multi-stage process…”
www.IndustRE.eu
Accuarcy of the business case valuePart II: The need for a simplified methodology
Slide 15
“Building up interest in demand response is for many companies a long, time consuming, multi-stage process…”
… but an order of magnitude business case estimation is enough to plant a seed”
www.IndustRE.eu
Requirements of a simplified methodologyPart II: The need for a simplified methodology
Slide 16
1 Being cost effective and time efficient
www.IndustRE.eu
Requirements of a simplified methodologyPart II: The need for a simplified methodology
Slide 17
1
2
Being cost effective and time efficient
Order of magnitude accuracy estimation is good enough
www.IndustRE.eu
Requirements of a simplified methodologyPart II: The need for a simplified methodology
Slide 18
1
2
3
Being cost effective and time efficient
Order of magnitude accuracy estimation is good enough
No specific modelling and optimization knowledge and tools needed
www.IndustRE.eu
Contents
Slide 19
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
The naïve approach …Part III: The simplified methodology step-by-step
Slide 20
“Database with many precalculated business cases”
www.IndustRE.eu
A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step
Slide 21
1
2
3
map
normalize
select
4 scale
www.IndustRE.eu
A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step
Slide 22
1
2
3
map
normalize
select
4 scale
www.IndustRE.eu
Example: generic battery model Part III: The simplified methodology step-by-step
Slide 23
EmaxEPin Pout
Emin
generic battery model
www.IndustRE.eu
Example: generic battery model Part III: The simplified methodology step-by-step
Slide 24
rori
bmax
bminb
P
EmaxEPin Pout
Emin
generic battery model
bufferedindustrial process
www.IndustRE.eu
Example: generic battery model Part III: The simplified methodology step-by-step
Slide 25
rori
bmax
bminb
P
EmaxEPin Pout
Emin
generic battery model
bufferedindustrial process
CHP with a hot water storage tank
www.IndustRE.eu
A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step
Slide 26
1
2
3
map
normalize
select
4 scale
www.IndustRE.eu
Some properties scale very well …Part III: The simplified methodology step-by-step
Slide 27
1x
“If you can earn 20€/year by trading electricity on the day-ahead
market with 1 car battery … “
Pin = 2 kWPout = 2 kW
Emax = 1 kWh
www.IndustRE.eu
Some properties scale very well …Part III: The simplified methodology step-by-step
Slide 28
1x 20x
“If you can earn 20€/year by trading electricity on the day-ahead
market with 1 car battery … “
Pin = 2 kWPout = 2 kW
Emax = 1 kWh
“… you can earn 400€/year with 20 car batteries!“
Pin = 40 kWPout = 40 kW
Emax = 20 kWh
www.IndustRE.eu
Some properties scale very well …Part III: The simplified methodology step-by-step
Slide 29
“If you can earn 2.000€/year by shifting electricity consumption
from day to night … “
89€/MWh
104€/MWh
15€/MWh
www.IndustRE.eu
Some properties scale very well …Part III: The simplified methodology step-by-step
Slide 30
“If you can earn 2.000€/year by shifting electricity consumption
from day to night … “
“… you can earn 4.000€/year in case the price difference
doubles …“
89€/MWh
104€/MWh
15€/MWh30€/MWh
79€/MWh
109€/MWh
www.IndustRE.eu
A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step
Slide 31
1
2
3
map
normalize
select
4 scale
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 32
“Day ahead electricity price for 1 day …”
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 33
“Buy electricity when cheap …”
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 34
“Well electricity when expensive …”
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 35
“Keep within the battery upper and lower limit”
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 36
“Start and stop with a 50% charged battery”
www.IndustRE.eu
Making money with a “reference battery” on the day ahead marketPart III: The simplified methodology step-by-step
Slide 37
• For 1 day in this example: profit = 66,16€
• For whole year: profit = 19.240€/year
• … or an average profit of 2,2€/MW/h
• In case you double the battery size, but not the Pin and Pout, unfortunately this doesn’t scale very well
“But why not putting it in a graph?”
www.IndustRE.eu
The normalized business case graphPart III: The simplified methodology step-by-step
Slide 38
www.IndustRE.eu
A smarter approach … in 4 stepsPart III: The simplified methodology step-by-step
Slide 39
1
2
3
map
normalize
select
4 scale
www.IndustRE.eu
Scale back to the real process parametersPart III: The simplified methodology step-by-step
Slide 40
1x 20x
“If you can earn 20€/year by trading electricity on the day-ahead
market with 1 car battery … “
Pin = 2 kWPout = 2 kW
Emax = 1 kWh
“… you can earn 400€/year with 20 car batteries!“
Pin = 40 kWPout = 40 kW
Emax = 20 kWh
www.IndustRE.eu
SummaryPart III: The simplified methodology step-by-step
Slide 41
“Starting point is an industrial process …”
industrialprocess
www.IndustRE.eu
SummaryPart III: The simplified methodology step-by-step
Slide 42
industrialprocess
normalizedreferenceprocess
“ … which will be mapped on a reference process …”
www.IndustRE.eu
SummaryPart III: The simplified methodology step-by-step
Slide 43
industrialprocess
normalizedreferenceprocess
“ … which is normalized to an 1MW equivalent …”
www.IndustRE.eu
SummaryPart III: The simplified methodology step-by-step
Slide 44
normalizedbusinesscase graph
normalizedbusinesscase graph
normalizedbusinesscase graph
industrialprocess
normalizedreferenceprocess
normalizedbusinesscase
normalizedbusinesscase graph
normalizedbusinesscase graph
refe
ren
ce p
roce
sses
business cases
normalizedbusinesscase graph
“ … select the correct normalized business case graph and value … ”
www.IndustRE.eu
SummaryPart III: The simplified methodology step-by-step
Slide 45
normalizedbusinesscase graph
normalizedbusinesscase graph
normalizedbusinesscase graph
industrialprocess
normalizedreferenceprocess
normalizedbusinesscase
normalizedbusinesscase graph
normalizedbusinesscase graph
refe
ren
ce p
roce
sses
business cases
normalizedbusinesscase graph
“ … and scale back to the correctbusiness case value.”
businesscase
www.IndustRE.eu
Contents
Slide 46
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
ConfigurationPart IV: On-site renewable energy business case
Slide 47
www.IndustRE.eu
At low wind conditionsPart IV: On-site renewable energy business case
Slide 48
grid to customer 100€/MWh
wind to customer 40€/MWh
www.IndustRE.eu
At high wind conditionsPart IV: On-site renewable energy business case
Slide 49
wind to customer 40€/MWh
wind to grid
www.IndustRE.eu
On-site VRE with the generic battery modelPart IV: On-site renewable energy business case
Slide 50
Emax
E
Emin
generic battery model
inflexibleload+
+
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 51
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 52
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 53
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 54
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 55
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 56
www.IndustRE.eu
On-site VRE normalized business case graph RE
Part IV: On-site renewable energy business case
Slide 57
“ … and if you plot it differently,you even see that there are optimal ratio’s …”
www.IndustRE.eu
Contents
Slide 58
Part I How calculating a demand response business case?
Part II The need for a simplified methodology
Part III The simplified methodology step-by-step
Part IV On-site renewable energy business case
Part V Conclusions and further steps
www.IndustRE.eu
Have the requirements been met?Part V: Conclusions and further steps
Slide 59
1
2
3
Being cost effective and time efficient
Order of magnitude accuracy estimation is good enough
No specific modelling and optimization knowledge and tools needed
www.IndustRE.eu
Have the requirements been met?Part V: Conclusions and further steps
Slide 60
1
2
3
Being cost effective and time efficient
Order of magnitude accuracy estimation is good enough
No specific modelling and optimization knowledge and tools needed
“ Under the condition that the industrial process can be mapped on a relevant
reference process, the approach is very straightforward “
www.IndustRE.eu
Does this really work for complex cases?Part V: Conclusions and further steps
Slide 61
BC value ≤ BC4 value + BC6 value
www.IndustRE.eu
Next steps with the methodologyPart V: Conclusions and further steps
Slide 62
• Methodology will be tested and refined (if needed) during a number of case studies
• Case studies will take place Q4-2016 till Q2-2017 in the 6 target countries
www.IndustRE.eu
• Bringing this methodology to the market is part of the IndustRE project
• A successful webinar was organised as a first information session, showing the potential of the methodology
• Mid 2017, a hands-on workshop will be organized we’ll keep you informed!
Next steps with the methodologyPart V: Conclusions and further steps
Slide 63
www.IndustRE.eu
Contact informationPart V: Conclusions and further steps
Jef VerbeeckSenior Researcher Energy Technology+32 14 33 59 [email protected]
Steven Van DeunBusiness Development EnergyVille+32 14 33 58 [email protected]
Thor Park 8310 | 3600 Genk | Belgium
Daan SixProject Manager Energy Technology+32 14 33 58 [email protected]
Slide 64