Flexibility is more than a Virtual Power Plant

If people are talking about flexibility, they most of the time think about Virtual Power Plants, but these are just one application of flexibility, and there are so many more to be considered.

In general, flexibility is defined as “the ability to change or be changed easily according to the situation.”

Levels of Flexibility in the Energy Ecosystem

Flexibility is showing up on many different levels in the energy ecosystem, starting on the asset level for example with a heat pump or a storage system, moving on to an on-site aggregation perspective (home energy management system) to a regional level form of communities, fleet management, or microgrid, and then ending up on a national level finally with virtual plants.

Levels of Flexibility

Each of the levels above shows their own capacity for flexibility, aggregation potential and different ways on how to deliver value to the consumer and to the energy ecosystem:

• Asset-Level: Depending on the physical constraints of the asset, its integration into the home, and the on site context, the flexibility can vary quite significantly. It can be used to optimize the efficiency of the individual asset, for example, with the outside temperature to heating curve, which is configured during the installation of a heat pump (providers are e.g. manufacturers or installation companies).

• Site/Home-Level: The aggregation and orchestration of assets within a building allows the implementation of different kinds of use cases. They can range from self-consumption, optimization to dynamic tariff, integration, or simple monitoring and allowing services and are often summarized in a home energy management system (e.g. Enode, Zerofy, Kiwigrid)

• Regional/Community-Level: This is a broadly defined level in the energy ecosystem and can be seen from electric fleet management up to full microgrid implementations. Examples are local charging management but can be as well regional self-consumption applications as, for example, seen with Cleanwatts or Exnaton.

• National-Level: This is where normally Virtual Power Plants are seen, focusing on delivery for energy services like balancing group optimization, day-ahead, or intraday trading up to the provision grid services like FCR or aFFR (e.g., Beebop, Next Kraftwerke, Enel X).

All of the levels offer different kinds of monetization pools where the value differs across geography, timing, assets, and customer segments. In addition, this is also influenced heavily by regulation and subvention programs.

Unleashing the Power of Flexibility: The Path Forward

The goal should be to combine different kinds of value pools, often mentioned as “value stacking,” and to be able to adapt quickly to changing contexts. Or would you have thought five years ago that aggregation could play a significant role for intra-day markets in Germany?

It shows the importance of solutions that have the ability to harness today’s monetization pools while at the same time being flexible to move along with the changing focus of impact and money. The consideration of physical and monetization constraints defined by each level of aggregation allows sustainable scaling and the offering of attractive business models to a wide range of customers.

Consumer-Centric Approaches in Flexibility are Key

What we should not forget is that the consumer has to be taken along with the idea of aggregation, in a transparent and easy to understand manner. All efforts should have the consumer in focus when creating new business models which are built upon these different kinds of value pools. And one thing is for sure: the more simple and integrated the business model, the more successful. Examples proving this are for example Octopus, Enpal, 1Komma5, or Neoom, where flexibility plays an important role in the success of the business case, but is treated as an integrated feature of the consumer offering.

In conclusion,

• the value pools exist even though they are different depending on geography.

• It is key to combine the different value pools and to be flexible in changing

• There are solutions that show how flexibility can be an integrated part of an impactful consumer solution.

• There are technologies out there that can deliver this kind of setup as with Beebop.

So what are we waiting for?

#lets-make-it-happen.