Dena Proposal to Tap Potential of Demand Side Management by German Companies to Help Balance the Electricity System

Demand side management by German companies is still rarely used to help balance the German electricity system, e.g. by providing operating reserve or interruptible loads, a working group established by the German Energy Agency (dena) found. A dena paper proposes various measures to improve demand side management, but warns that potential may not be as high as some predict.

Demand side management can help provide flexibility and thus improve the security of supply and system stability, the dena paper says.

It highlights the benefits as follows:

  • optimising power procurement by benefitting from price fluctuations;
  • lowering costs for balancing power needed for managing balancing groups;
  • providing operating reserve;
  • stabilising the grid when operating reserve alone is not enough by providing interruptible loads.

The paper, however, cautions as to the potential of demand side management, questioning the assumption of a potential of roughly 15 GW made in another study and the possibility to therefore abstain from introducing a capacity market for secure energy. On the one hand, potential for demand side management was limited due to production requirements and safety at work regulations, on the other hand information about demand side management were sometimes lacking and regulatory framework conditions were not attractive enough, the paper says.

To promote demand side management the dena paper recommends

  • to inform enterprises about the possibilities of making money with flexible loads;
  • to examine potential as part of energy management systems and energy audits;
  • to facilitate the market entry of flexible loads e.g. by adapting operating reserve requirements;
  • to examine and amend the “Ordinance on Contractual Agreements Concerning Interruptible Loads” (AbLaV) to open it for more suppliers and improve the situation in the south of Germany (Pursuant to AblaV the transmission system operators hold monthly tenders for interruptible loads of 3,000 MW in total to stabilise the grids and maintain the security of supply. According to dena, only 1,226 MW are currently qualified to participate in the tenders, none of which are located in southern Germany);
  • to develop procedures and standards that allow marketers of flexible loads access to balancing groups managed by third parties.

Source: dena

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