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Unraveling complexity in energy flexibility trade

15 Feb 2018

Last December, the TNO early research program Grip on Complexity organized a workshop on energy flexibility trade. A group of 20 energy experts gathered at TNO in The Hague to discuss developments in the energy sector, especially those related to energy flexibility. A broad range of stakeholders was represented: from distribution & transmission system operators, via energy generation, trade and retail parties to newcomer companies in the sector, supplemented by representatives of the Dutch Ministry of Economic Affairs and Climate, the Top Sector Energy and the Netherlands Enterprise Agency.

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Understanding complex system transition

TNO focusses on complex system transitions, such as the transition of oil and gas to sustainable energy and the transition to a circular economy. In their research, TNO focusses on the development of models that help us to understand complex systems and to predict, influence or steer their behavior. In all projects, TNO pays special attention to the stakeholder landscape and the needs of stakeholders.

Reliable and affordable

Energy flexibility can be seen as the ability of energy producers and users to choose the timing of their energy production and use. More flexibility in the energy system is needed to absorb the sustainable energy potential while keeping a reliable energy system that is affordable. The affordability is determined by both energy prices as well as network cost. Energy flexibility is needed to balance energy consumption and production, responding to variability and uncertainty in both demand and supply. This need is more important in the electricity system, as affordable large-scale electricity storage is lacking. Currently, flexibility is mainly provided by traditional power plants and large industrial consumers. With the transition to a more sustainable energy system, variability in energy supply will rise due to wind force and solar radiation variations, while the production from traditional plants is expected to decrease.

Workshop results

The workshop’s discussions focussed on how the trade of energy flexibility services, especially those sourced from prosumers, is growing into an inherently complex system, as it combines a cyber-physical system where vast numbers of smart devices interact with multiple stakeholders exchanging these services. This complexity will be overlaying the already existing multi-layered complexity of the energy system: the physical infrastructure and the related network of business, value and markets.

While all participants agreed that markets need to be introduced at the distribution level of the electricity network and that these markets will be highly automated, discussions focussed on how we should shape these future energy markets and the corresponding revenue and business models of all stakeholders involved. To orchestrate the energy transition in such a way that it benefits our society as whole is essential. s. Effective use of ICT technology and proper design and implementation of sustainable business models should result in a robust and resilient energy system, both from a technical and a socio-economic viewpoint.

To get a grip on the increasing complexity related to energy flexibility trade, innovations are needed in multiple areas simultaneously, including the value network, business and market models and information technology.

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Join our early research program Complexity on unraveling complexity in energy trade, market and business models and get a grip on how to design an (eco)system that is robust and resilient from a technical, economic and societal perspective.

Expertise

Early Research Program: Complexity - Grip on Complexity

TNO's  Program Grip on Complexity focusses on the development of models that help us to understand complex systems and to predict their behaviour. Complexity is commonly briefly described as the science... Read more

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