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Creating smaller electricity markets

Creating smaller electricity markets

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By Wisse Hettinga



Our current energy systems have two major and related problems: congestion of the power grid and a mismatch between supply and demand

Sjoerd Doumen defended his PhD thesis at the Department of Electrical Engineering on March 7th

Our current energy systems have two major and related problems: congestion of the power grid and a mismatch between supply and demand. By switching to smaller, local electricity markets (LEMs) we wouldn’t only be able to solve these problems, but also facilitate the energy transition and make energy cheaper for everyone. TU/e researcher Sjoerd Doumen asked himself the question: are we ready to implement LEMs?

The current transition from fossil fuels to renewable energy sources, such as wind and solar energy, creates two major challenges. First of all, the emergence of decentral energy generation, for example using solar and wind facilities, and devices such as heat pumps and electric vehicles lead to an overburdened power grid, aka grid congestion. The second problem is the demand-supply mismatch resulting from the intermittent nature of renewable energy sources. “In the old days you’d simply switch a gas turbine on or off,” says Doumen. “Now – and even more so in the future – we’re dependent on the amount of wind and sun, and whether it’s cloudy or not. That makes it harder to match supply and demand.”

Responding to market needs

A possible solution to these problems is switching to smaller, local electricity markets (LEMs), Doumen writes in his dissertation. “At the moment, electricity is traded at the national level,” he explains. “They procure electricity at a very high level and then divide it up among many end users. The idea is to slowly transition to a situation where this is done by increasingly small parties at a more local level. Owing to better participation of end users, LEMs would be better placed to respond to market needs. For instance, we could make smarter use of solar panels and do a better job spreading out our energy usage to avoid peaks.”

Many pilots have taken place that show that you can share energy locally and that this can have many advantages. And yet, this concept has hardly been implemented in practice yet. Which is why the main question Doumen tried to answer is: are we ready to implement LEMs? His dissertation contains recommendations and preconditions that are meant to facilitate a successful implementation, taking account of the perspectives of both end users and different stakeholders, such as grid operators and energy companies. “Money is an important incentive. So if you want to get everyone onboard, everyone must be able to profit from such a system,” he asserts.

 

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