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Empowering end-consumers to drive grid flexibility

Empowering end-consumers to drive grid flexibility

Empowering end-consumers to drive grid flexibility

Arne Berresheim

Arne Berresheim

Arne Berresheim

Apr 3, 2024

While you are reading this, the world around us is going through a major energy transition. Our reliance on renewable energy sources has reached an all-time high, with its share expanding day by day. This is great, but matching energy demand to their irregular supply cycle is hard, leaving us with a stability issue on our grids.

To stabilise our grids, the energy industry is currently relying heavily on constructing new industrial battery installations. Their buffering functionality offers a level of flexibility to our grids and is necessary to continue the roll-out of renewables in favour of harmful fossils. At the same time, these new batteries require huge investments and their manufacturing process further depletes our planet’s resources.

What if we use the energy assets that we already have installed?

On the end-consumer side, adoption rates of solar energy, home batteries, heat pumps and electric vehicles (EVs) are skyrocketing. We can use these distributed energy assets to balance out the grid and reduce CO₂ Emissions. This is the key concept behind residential flexibility, consisting of two parts. One part is demand-response, in which you shift or reduce your usage away from peak hours. The other part is using the energy assets to provide energy to the grid when needed. If all residential and industrial buildings participate, smartEN reports that we can save 37.5 million tonnes of CO₂ in 2030.

Do people actually know that this is an option and are they willing to participate?

A study conducted in Finland had a look at consumers' motivation and willingness to participate in demand response programs. The study covered the demand-response aspect of flexibility and more specifically looked at consumers' willingness to enrol home appliances, heating (heat pumps) and EVs. Here are the most important results that were gathered.

  • The main motivators for consumers to enrol energy assets are economic or environmental factors.

  • Home appliances and heating systems have a minimum 40% acceptance rate among both groups of primary motivators, with economically motivated participants showing a 70% acceptance rate.

  • Average expected financial compensation is 100€/year for EVs and appliances, and up to 200€/year for heating.

Who is interested in providing flexibility and who is not?

To figure out the answer to the question, the authors of the paper analysed the relation between the responses and the respondents demographics. Once again we will only have a look at the most important results. 👇🏼

  • Older consumers demonstrate less receptiveness to demand response programs for their appliances and EVs, indicating an inverse relationship between age and willingness to participate.

  • Higher educated (Bachelor, Master or higher degree) individuals have been found to be more supportive of enrolling their energy assets.

  • People without children in their households tend to demonstrate higher willingness to enrol their heating and EVs in demand response compared to those with children.

  • Consumers with moderate incomes, particularly those earning between 3500€ and 4500€ gross monthly, showed the highest willingness to enrol their appliances.

The ideal target group appears to be young, educated individuals living in childless households with moderate incomes. So, those are the people who are already interested, but what about the ones that are not? Senior, less educated people with children?

To have a closer look at the different groups, the dataset was clustered into three groups.

[ADDCAPTION]End-consumer groups for the adoption of demand-response

Source: Sridhar, Araavind, et al. "Toward residential flexibility—Consumer willingness to enroll household loads in demand response." Applied Energy 342 (2023): 121204.

We have a group of techies and optimisers that already know a lot about the power of renewables and ways to save money on the electricity bill by local generation and optimising usage with smart home appliances, the adopters. Another group that would follow if enough people do so. And a third group that is still undecided, most likely uninformed and needs to see a big check to sign up, the neutrals.

A couple things to keep in mind

The survey was sent to 30,000 customers of PKS, a big electricity company in Finland, and 1,468 people answered. Since they chose to answer, they might already be interested in the topic, which leaves us with a sample bias. We should also take into account that the survey was carried out in Finland, where the awareness for the climate crisis is on the higher end compared to the European average (see Fig. 3). The Finnish grid is already packed with renewables at a mix of 48% and holds second place in the EU in terms of share of renewables. Therefore, the findings might not apply to other countries with less widespread adoption and knowledge on the subject.

[ADDCAPTION]Which of the following do you consider to be the single most serious problem facing the world as a whole (% - Climate Change)

Source: https://europa.eu/eurobarometer/api/deliverable/download/file?deliverableId=88210

Finally, the survey was done before a big rise in energy prices caused by the conflict between Russia and Ukraine. Since then the proportion of renewables on the grid has risen, as stated in the EU's REPowerEU plan. Hand in hand with that goes awareness of renewable energy and the increasing importance of flexible energy solutions to the energy grid.

What is needed for mass adoption of demand side flexibility?

We see 3 key steps that need to advance in order to adopt flexibility for end-consumers:

  1. Technological Advancement. We need reliable and scalable software solutions managing a diverse set of residential assets, without restricting consumers and following privacy best practices.

  2. Education on the demand and economic opportunity of energy flexibility needs to be improved. Consumer trust and engagement has to be boosted through effective communication and campaigns. 

  3. Market Incentives. Economic and environmental incentivisation is necessary for residential adoption. Programs need to emphasise and improve the CO₂ emissions reduction and financial compensation. 

In Belgium, initiatives such as the Flexibility Plan 2025 by the Flemish Government, are addressing education and market incentives. Teaming up with Belgium's largest low and medium voltage net operator, Fluvius, they're launching an information campaign to educate citizens about the importance of energy flexibility and how they can get involved. The plan also includes revising regulations, making it easier to purchase smart control devices, heat pumps, charging stations, batteries, and other essential tools for flexibility.

On the technological development side the improvement in prediction models through artificial intelligence helps navigate the fluctuating energy market, while cloud connectability opens up new opportunities.

Equally excited about the future of energy?

Let's do great things together!

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Equally excited about the future of energy?

Let's do great things together!

Get in touch

Equally excited about the future of energy?

Let's do great things together!

Get in touch