V2G Electric Grid Services - Flexibility is "King"

If you have not read yet, please start with the previous post that describes the interconnection of FCR-D (Frequency Controlled Disturbance Reserves) and V2G services. In this post, Bjoern Christensen, VGI/V2X Expert and author of this article explains further details on V2G Electric Grid Services.

While analyzing the FCR-D pricing from 1/1/2022 until 3/31/2023 (see Figure 1 and Figure 2) based on Energinet data (Danish TSO). The daily procured volume (Eastern Denmark and Sweden) was around 600 MW (Denmark ~ 40 MW the rest from Sweden - the 600 MW is roughly half of the total Nordic market volume).

Some may say this is a shallow market that will soon be "saturated". Maybe - or maybe not. Depends on perspective. 600 MW is for many players a large market and provides a good start for V2G, which has a very low marginal cost of providing the service. Eventually based on many factors the future market will find an equilibrium price level that will support economic bidding on the service.

The FCR-D comes in two variants both showing extreme price swings:

- Up-regulation in the frequency domain 49.900 Hz - 49.500 Hz
- Average price was €57.19
- Max price €234.27
- Min price €9.95

- Down-regulation in the frequency domain 50.100 Hz - 50.500 Hz
- Average price was €31.04
- Max price €520.74
- Min price €4.10

Combining bids for both FCR-D UP and FCR-D DOWN would yield an average price of €57.19 + €31.04 = €88.23 per MW/hour. Not bad indeed.

The extreme price swings clearly show the need for flexibility when bidding on these services. Remember that the payments received are based on a pay-as-bid concept i.e. no market clearing. This requires a flexible business model, intelligence on when to bid and at what price and how much capacity can be bid.

Flexibility services from the TSO's perspective using e-V2Gs (and other distributed energy resources) will be an important integral part of the future distributed clean electric grid to ensure that the grid is in balance.

No comments

Powered by Blogger.