Results of phase 2

 

The implementation of smart energy grids in the consumer market is worth between 1 and 3.5 billion euros. This has been revealed by a study carried out in PowerMatching City, the first pilot project in the world to implement a smart energy grid in practice.

Results of the pilot

PowerMatching City demonstrated that smart energy systems are technically feasible and that energy flexibility makes economic sense. In fact, the net gains from the consumer market could well reach 3.5 billion euros. These benefits are based in part on money saved by the grid operators by avoiding costs for investments and maintenance of grids. On the other hand, energy providers will be able to manage their customers' energy consumption more effectively so that they will be able to purchase energy for more competitive wholesale prices. Energy providers will also be able to use locally generated energy to match local supply and demand, which also saves costs.

 

During the pilot, the consortium partners and the residents jointly established two energy services to facilitate flexibility: Smart cost savings enabled the residents to keep the costs of energy consumption and generation as low as possible, while Sustainable together focussed on helping them to become a sustainable community. PowerMatcher, the smart software used in the study, played a key role by matching the energy supply and demand based on the information provided by the energy providers and the consumers. A striking result of the pilot was that the system was much more flexible than anticipated on the basis of previous studies and that the demand and supply were easier to balance than expected.

 

Conditions for large-scale implementation
If this smart and flexible energy system is to be implemented in the consumer market on a large scale then it will need to be standardised, both in order to reduce the costs of connecting the households in the smart grid and to lower the price of the smart energy services. The use of standardised solutions will reduce the cost per household enabling the flexible energy system to quickly become economically viable. However, another precondition will need to be met in order for this to happen: energy purchasing will need to take place on the basis of actually measured energy consumption or generation. Only then the energy provider will be able to profit from the added value provided by energy flexibility and share the benefits with their customers.

Recommendation
The partners in PowerMatching City recommend the development of a new market model for the optimal distribution of flexibility, whereby the value of flexibility is put to the best possible use. Fair distribution of the benefits among all the stakeholders (end users - consumers, energy providers and network operators) is essential for a successful business case. This market model requires a single market party that can collect and redistribute the flexibility: the aggregator. Furthermore, standardisation can ensure the economic feasibility of large-scale implementation.

 

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