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Unlocking energy market flexibility
The focus of CEER’s 2015 annual conference (29 January 2015) was energy market flexibility and demand response. Participants discussed the challenges and innovative approaches to flexibility at (1) wholesale (2) network and (3) consumer levels. Speeches, PPTs and photos are now online.
Opening the event, EU Commissioner for Climate Action & Energy, Miguel Arias Cañete stressed “... Activating demand-side participation is important. This will require, amongst other things, the right incentive framework and proper access to information for consumers.”
Demand-side flexibility (DSF) means empowering consumers and reduced costs CEER President, Lord Mogg, explained why a major focus of CEER’s work is developing competitive retail markets in which consumers can engage: “Demand-side flexibility, if enabled, has the potential to bring significant benefits to consumers, both in terms of controlling their energy use and bills, and in terms of the avoided cost of generation and network investments which is inevitably passed through to consumers.”
Maximising the value of flexibility MEP Buzek stressed the important role flexibility can play in terms of security of supply. Mr Borchardt (DG ENER) called for implementation of the Energy Efficiency Directive to ensure DSF is treated equally to generation and for market-based and targeted consumer incentives. CEER Vice President Walter Boltz outlined the massive contribution that gas makes to flexibility from strategic storage to flexibility on import contracts to line-pack and reverse flows. He reminded that regulators are working on network codes for gas flexibility to be traded freely across Europe.
Unlocking flexibility at the consumer level Mr Hill, OPower, pointed out that getting the attention of customers (to play that critical role in demand response) is not easy, not least since “people only think about their energy usage for 9 minutes each year”. Mr Hill’s top tip for engaging customers is neighbourhood comparison. Because people are by nature competitive, they want to save at least as much energy as their neighbour.
What’s next? Take-away messages from our event on what is needed to unlock flexibility include: - appropriate data protection needed for consumer trust - rewards for consumer participation in demand response programme - pricing flexibility at its value (see IEA presentation) - improved network operators (TSO-DSO) coordination on data management - removing barriers to demand response
Flexibility and removing the barriers to demand response, competitive retail markets and Distribution System Operators (DSOs) are all core area of CEER’s work. We plan soon to publish our advice on protecting and managing customer meter data to ensure security and privacy are safeguarded.