Welcome to the second part of the interview with Boris Turha, Senior Development Engineer in the Technological Development Department at Elektro Ljubljana. If you haven’t read the first part of the second interview in season 5 of Smart Talks with Jovan, where we discussed first-hand experiences of Smart Energy Management from a DSO in Slovenia, read it here. This time, we discuss the solutions and challenges in Smart Energy Management, the need for regulation, and the standardization of communication protocols.
Are there any standards and are you satisfied with the standards in Smart Energy Management? How do you see the further development of standards in this area?
Supplier or aggregator must have communication with the device to be able to send commands, and we need some protocol for that communication. I think it should be standardized, but I don’t know if vendors want to do this, because the consumer of HEMS will connect to its Cloud system and the vendors don’t have any earnings from Clouds other than their own. The easiest way to standardize protocol is through the European commission, because it is then an obligation for all member states.
We as DSO will need a possibility to somehow limit the home consumption by command. Currently, we don’t have much support from the Regulator. As a utility company, the funds we receive are only meant for investment purposes at this moment. In the future, we may find a solution for flexibility if the Regulator allows us to limit consumption. We already have a technical solution in place. We have a system that enables us to send commands to the meter, which then connects or disconnects the digital or relay output, but still, consumers have to connect wires from their heat pump to the meter. So, the heat pump is getting the signal from the meter, and this signal is sent by the DSO, but we need permission for this from the customer.
We are currently unable to automatically engage the consumer.. He gets an email or SMS for activation, to turn off the heating pump, and he has 15 minutes to react.
If a customer has HEMS, in this case it should automatically connect to this digital output or relay output, and HEMS would decide with its intelligence what should it shut down or start charging. The main communication channel is the meter over P1 port or relay output. We presented this to our national regulator and it was accepted. Regulators give us some playground to test and research, and if it turns out as a good solution, a National Authority will accept this and support further development.
In Elektro Ljubljana, we developed a flexibility platform that enables consumers to offer their flexibility to us. Flexibility is the ability of the customer to change the power on a short-term basis at the request of the DSO. We are partners in several H2020 programs where we use flexibility. In the latest OneNet, we have a demo where the aggregator offered us 20 kW of flexible power with 17 consumers with heat pumps. In a 3-year demonstration, we developed a system that runs fully automatically without the need for dispatcher intervention and with only a very limited investment. It turns out that in the case of the heat pumps rebound effect could cause an even bigger overload of the low voltage network. If the medium voltage/low voltage transformer was overloaded by 25 kW we requested whole flexible power from the aggregator and the aggregator shut down 17 heat pumps. After 75 minutes (that was the longest activation time of one activation) all heat pumps tried to catch up missed time by consuming more power than before shutdown. So 5 min after activation overload increased to 35 kW, meaning that the transformer was operating at 180% of nominal power (the outside temperature was -3 °C).
Our flexibility platform enables not only aggregators but also individual consumers to bid on auctions. We had several auctions but we didn’t have many offers. We even sent letters to households with clarification on what flexibility is and how they can sell their flexibility to the DSO, but we didn’t get enough capacity. We asked aggregators to offer flexibility from their consumers connected to our overloaded grid, but aggregators didn’t offer anything. When we asked what was the problem, they said that consumers are not willing to pay for controllers or Smart Energy Management which could enable automatic shutdown of their heat pump or photo voltaic. We calculated that the average consumer can earn from 20 to even 100 EUR for 6 months of participation, but this is not the amount of money that people are willing to lower their consumption for a short time. The amount of money for flexibility should be smaller than the investment for reinforcement of the grid. If we offer even more money to the consumer, then investment for reinforcement of the grid will be lower. DSOs are willing to pay 800 EUR/MWh, which is a lot of money, but from a consumer perspective that is only 0,80 EUR per kWh (four times the price of electric energy). If the consumer turns off the electrical heater with 2 kW of power for 1 hour it will earn only 1,60 EUR. This means that the heater has to be switched off for 62 hours so the consumer can earn 100 EUR.
Are there any established legislation and regulation in the Smart Energy Management field?
Right now, we have a yearly Net metering billing, but this year, we will start with the monthly billing for the customers with photo voltaic system. The legislation is that if the customer gives us request to connect the photo voltaic systems on the first of January, we have to connect it by the end of the year. Currently the limit is 80 percent of contracted power, our interest is to limit the contracted power even more in the future, so we hope that this legislation will come soon.
One solution is to invest in the network. The second solution is some new regulations and legislation for limitation. Maybe the key is in the compromise between these two solutions.
In Slovenia, if the customer puts a photo voltaic system on the roof and installs the battery he could receive subvention from national institution that is something around 500 euro per kW, but not more than 25% of eligible investment costs. The battery may be the solution for that substation where we have overload instead of putting the bigger transformer, but the battery must have big capacity. Also, the problem is that by the legislation, TSO and DSO are not allowed to invest in the battery. This could be done by finding a company which will invest in this, but it is more expensive and less efficient than increasing the power of the transformer. If the owner of a battery sells this flexibility to TSO and the suppliers, again, calculations would not be on our side.
What organizations should collaborate to further develop standardization, legislation and regulation in Smart Energy Management? Which organizations does your organization cooperate with regarding this?
Elektro Ljubljana as DSO don’t cooperate with any of Smart Energy Management organizations.
However, the legislation, regulation, and standardization should be brought to the level of the European Commission. We have an example from 2010, when the European Commission succeeded in an initiative to integrate smart metering systems across all member states.
As I said, the easiest way is through the European commission, because it is then an obligation for all member states.
What is the future of Smart Energy Management since some distribution companies implemented pilot projects that were not so successful?
People don’t want to invest in Smart Energy Management to offer their flexibility to the market. When I talk about flexibility, I mean lowering consumed power for a shorter period. It is just shifting consumption to time with no network overload. On the other hand, the ones that already have Smart Energy Management are not willing to give their flexibility to the market, or their flexibility is not useful for DSO.
Concrete example: We have an overloaded low voltage network in the winter after 6 PM for substations with 50 to 250 kVA installed transformers usually in the countryside. At that time photo voltaic didn’t produce electricity, but because of cold weather heat pumps increased consumed power. Currently, all prosumers with photo voltaic on roofs have yearly net metering, meaning that they are not stimulated to consume the generated energy from photo voltaic. Yearly net metering means that at the end of the year the supplier makes retroactive calculations. People who install photo voltaic usually consume even more energy than before installing photo voltaic. That is because they install 11 kW photo voltaic when they have only 5 MWh yearly consumption. Since 11 kW photo voltaic will produce around 13 MWh, and because excessive energy is not paid much, this consumer will try to consume all generated energy, meaning that the energy consumption will rise to 13-5 = 7 MWh. So photo voltaic does not reduce energy, it even increases the consumption of electrical energy.
Maybe this consumer doesn’t use oil to heat and it is more ‘green’, but causing overloads in the winter and overvoltage in other seasons. Even if this consumer has an electric vehicle and battery storage, he can’t charge electric vehicle from photo voltaic, because the car will be parked where the consumer works, and it will charge it after 4 or 5 PM when there is no sun in the winter. With battery storage installed, consumers can charge the battery in the afternoon, and discharge it with heat pump at nighttime when the temperature drops. However, there are only a few consumers with battery storage nowadays since they are not cheap.
What is the most important lesson you learnt throughout your career?
Keep your eyes open and be prepared for new challenges. Don’t create problems, because they will come back to you. However, if a problem occurs, give everything you have to solve it, or at least think of ways to solve it. It will not go away on its own, you need to be proactive.
Conclusions:
Legislation and regulation can help DSOs and suppliers to create incentives to motivate consumers to offer their flexibility in order to bring balance to the energy network.
European Commission should also adopt regulations that would have to be applied in all the member countries and this would push companies working in the field of smart energy management to standardize communication protocols.
Question for the audience:
What is the biggest motivator for customers to give their flexibility to the DSOs and suppliers to manage it?