In time, we can get rid of fossil fuel power plants. Every solar panel or wind turbine increases this chance.
As you probably know, Senfal is on a mission to create a world powered by 100% renewable energy. The transition towards this world might seem slow, but progress is being made every day. Senfal develops software in order to accelerate the energy transition, and to achieve our ultimate goal of having an energy grid based solely on renewable energy. But how do we impact the energy transition today? Since today is Sustainability Day (Dag van de Duurzaamheid), our energy expert Hubert Spruijt would like to elaborate on Senfal’s current impact.
Senfal’s demand response system
Reliable and efficient demand response systems are key for a sustainable future. Currently the vast amounts of flexible balancing power are supplied by power plants which burn coal and gas. However, when these plants are taken out of order, their flexibility can only be replaced by big pools of small assets when these pools are very well coordinated by demand response systems. Senfal has developed such a pool in its Jouw Energie Moment project. The additional demand induced by the demand response systems has the effect that the price will not drop as low as what it would have been without the additional demand. This way renewables get a higher price for their electricity production. As a result, by controlling the demand side, demand response systems facilitate both the growth of the renewable energy supply and the sustainable use of energy by heat pumps and ev’s. Without good demand response systems, the costs of the energy transition would be much higher. In other words, Senfal shifts energy consumption to efficiently use renewables.
Use renewable energy more efficiently
To cater for different purposes, flexibility is needed on different time-scales. The largest time-scale is seasonal storage. This however is not in the scope of current software due to low earnings potential. Secondly, the integration of renewable ways of energy demand and supply creates a need for intra-day and day-ahead time shifts in energy demand. Currently, fossil fuel plants provide enough flexibility to handle the usual fluctuations between day and night. However, when the influence of the amount of renewables increases, additional flexible capacity is needed. In theory, for the Netherlands, especially wind energy during nights and a combination of wind and sun during weekends will increase the demand for flexibility. However, this level of flexibility is only rarely needed, so shifting consumption to these periods is a way to prevent this renewable energy to be wasted.
Mothballing power plants:
Furthermore, increasing renewables means, in time, we can get rid of fossil fuel power plants. In theory, due to the zero marginal costs of renewables, every additional solar panel or wind turbine will decrease the operational time of these power plants. They are currently the highest in the merit-order, meaning that while their marginal costs are not influenced, their average costs will rise, thereby supporting the argument to mothball more plants. Less capacity will increase market volatility as the merit-order gets steeper. This is also influenced by demand along the merit order, which may have more fluctuations than just the daily demand pattern. When adding 4 GW of wind with a load-factor of 25%, the 1 GW of average additional load might even lead to more than 1 GW of alternative energy production to be mothballed. Let’s say the majority of the 1 GW was produced by 4 GW of plants with an average load factor of 50%. The operational time/load factor then decreases to 25%, thereby affecting the average revenues per hour, which in their turn should be much higher than before. If this is not compensated by the average price, this could be a reason to mothball the 4 GW of plants.
Accelerating the energy transition
An accurate quantification of our impact is difficult to make, as it really depends on the shifts in operations and the investment decisions plant owners make. The principle, however, still holds true: a good demand response system lowers the average price for flexibility and increases the average price for renewable power by increasing demand during periods of abundant supply. This will in turn lower the societal costs and make renewable investments more attractive by offering higher revenues. In the end, this process will speed up the energy transition and prevents long-lasting CO2 emissions.