March 12, 2024
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Digging into the layers: How flexibility value stacking is like a trifle

Can a trifle really help explain an energy strategy? Yes, it can.

When you think of a trifle, you think of a sweet, delicious dessert stacked in a large glass jar. Or, maybe you think of Rachel’s meat trifle from Friends, but, either way, you think of its most classic trait: layers. 

In the electrifying landscape of modern energy systems, layers are just as sweet and valuable. And, when it comes to the different layers of energy flexibility, they can significantly benefit the energy system and end users. Value stacking is defined as the bundling of energy management applications, creating multiple value streams to unlock the full potential of distributed energy resources (DERs). By bundling solutions, energy companies are able to meet the requirements of specific regions and use cases, enhance value for end users and minimize overall system costs, all while guaranteeing a secure and stable power grid. 

Sound too good to be true? Well that’s the benefit of unlocking flexibility in layers – and gridX has all the trifle ingredients at our disposal. All companies need to do is choose the ingredients and flavors that suit their customers’ palette. 

Grab a spoon and let’s dig in!

Gather your baking tools

Before we start “baking,” you need to grab your tools: a whisk, spatula, wooden spoon, etc. In this energy analogy, the “tools” are knowing the difference between implicit and explicit flexibility.

Implicit flexibility

Implicit flexibility describes the consumer's reaction to price signals. This can be done manually or through a smart energy management system (EMS). By financially incentivizing prosumers to consume or store electricity at certain periods of the day, consumers, turned prosumers, can maximize their self-sufficiency, while minimizing demand peaks and reducing costs.

Explicit flexibility 

Explicit flexibility is a committed, dispatchable resource that can be traded on various energy markets, such as wholesale, balancing, system support and reserves markets. This type of flexibility is vital for balancing and managing grid congestion. It’s used by companies such as (but not exclusive to) Balance Responsible Parties (BRPs) and Distribution System Operators (DSOs) to maximize grid stability in a cost-efficient manner. Prosumers can profit from this type of flexible energy by granting access to their DERs and participating in the revenue generated.

XENON unlocks energy flexibility in a three-layered approach.

Let’s get baking!

A trifle usually consists of layers of cake or cookies, custard, fruit and cream. While each layer is a delicious treat on its own, combining them in various constellations and combinations provides a more pleasurable experience.

Base layer: Local optimization

While it would of course be possible to go straight to the cream or custard layers of a trifle, the true experience starts with the most obvious layer: the base. To create the base, you lay slender sponge cookies called “ladyfingers” along the bottom of a large glass jar and then pour over a mixture of fruit and jelly to create a sturdy yet flexible base. 

In smart energy management, the “easiest” and most accessible layer to start with is the local one. That’s why the foundation layer of flexibility value stacking is implicit flexibility based on local optimization and the integration of static external signals (i.e. controlling the energy flows within a household which need a fast reaction time, such as those that come from rooftop photovoltaic (PV) systems to power batteries, heat pumps and/or electric vehicles (EVs) etc.). 

Optimizing the utilization of self-generated electricity, i.e. self-sufficiency optimization, is the core of this layer. It minimizes costs and emissions for end users and makes them less dependent on the centralized grid. Fuse protection is another key feature, which involves protecting the entire grid connection point and each individual fuse at a site (whether it be a home or a more complex setup like an EV charging park) to constantly minimize grid fees and reduce the need for costly grid extensions. This is particularly important in enabling efficient scaling of e-mobility and electrified heating, both of which cause significant demand peaks.

The integration of static external signals in this layer helps the EMS adapt without active intervention. For example, the EMS can automatically adjust energy usage based on predictable factors, such as static energy prices (i.e., the EMS will adapt feed-in and off-take accordingly to maximize cost efficiency). 

Middle layer: Sweet and full of potential

Although the first layer of a trifle is delicious, there are still more to go – and they have even more flavor than the first. Custard makes up the middle layer, and just like this layer adds depth and complexity to a trifle, implicit flexibility with dynamic external signals unlocks further flexibility as the middle value stacking layer. 

Dynamic external signals include information given in real-time about electricity prices. This enables homes or other sites to take the needs of other parts of the energy value chain into account to improve system-wide stability and cost efficiency, without necessarily compromising on local optimization.

Time-of-use (ToU) tariffs are a perfect example here. By actively integrating electricity prices in real time and adjusting local consumption accordingly, consumers can significantly reduce their electricity bills. They can, for example, use or charge assets when prices are low, and shift consumption or prioritize self-generated or stored electricity when prices are high. 

Solar power forecasting can also be found in this layer as it is a process used to predict a PV system’s future electricity generation. When integrated with battery storage systems and dynamic ToU tariffs, this tool can be crucial to enhancing the overall reliability and efficiency of energy systems.

Top layer: The finishing touch

The top layer of the trifle: light, fluffy, whipped cream plus additional fruit slices, chocolate dusting – whatever your taste buds crave. In our energy trifle: explicit flexibility.

Explicit flexibility is a crucial pillar for managing grid frequency and grid congestion. Like choosing the finishing touches for your trifle, this layer unlocks the full flexibility of DERs, even allowing prosumers to be financially compensated for participating in flexibility services.

Because they offer so many financial and ecological benefits, residential DERs are already being installed at an increasingly rapid rate. When pooled together, their flexibility offers huge potential, however, this potential remains largely untapped. To reduce our reliance on large-scale power plants and make use of what is already there, aggregating this flexibility and using it as a dispatchable unit allows assets that are connected to an EMS to be used to provide ancillary services. Because residential DERs can change their consumption and (when using batteries) production patterns very quickly, they are particularly suited to the fastest balancing energy product: Frequency Containment Reserve, which is responsible for maintaining power system stability by reacting swiftly (within in 30 seconds) to imbalances between electricity supply and demand. 

Integrating signals from DSOs is a key factor in guaranteeing grid stability, as it ensures that energy assets behave in a grid-friendly manner. A highly relevant use case in Germany is paragraph 14a of the Energy Industry Act, which stipulates that grid operators can now dim the consumption of controllable energy-consuming devices to a minimum of 4.2 kilowatts in emergency situations. While this has created panic amongst some players, with the help of an advanced EMS, end consumers can actually benefit from this by reducing their grid fees without user comfort being heavily affected. A transparent mobile app can inform users when assets will be dimmed to increase transparency and minimize any inconvenience.  

Grab a fork and eat up!

Flexibility value stacking is not a one-size-fits-all approach (or, in this analogy, a one-trifle-satisfies-all-palettes). The layered approach unlocks the full potential of small-scale flexibility to simultaneously meet the needs of grid operators, energy providers, prosumers and every player in between. While each layer can manage energy on its own, it’s the tiered function that creates a more delicious result.

Value stacking energy flexibility allows companies to create a tailored solution that leverages the full potential of small-scale assets connected to an EMS.

According to Lukas Exel, Product Manager for Flexibility Services at gridX, “Value stacking energy flexibility allows companies to create a tailored solution that leverages the full potential of small-scale assets connected to an EMS. This, in turn, enables optimization of energy flows on both a local and system level.” 

While it is important to note priorities must be set and not all goals can be achieved at once (i.e. prioritizing grid stability may minimally affect self-sufficiency optimization), these priorities can easily be established and automatically shifted with the help of an advanced EMS. In the same way, not every flavor combination works for every palette – but it’s the ability to choose and change the final result depending on specific factors that delivers true value.

So, let's dig into flexibility’s layers and savor its sweet rewards.

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HEMS: Evolution and how to win the race
As heating, mobility and electricity become increasingly intertwined, the home is becoming the energy hub of the future.
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