The implementation of smart energy grids in the Dutch consumer market is worth between 1 billion and 3.5 billion ($1.07 billion-$3.75 billion), according to a study carried as part of a smart grid pilot project in the Netherlands — the first of its kind in the world.
A consortium comprising Norwegian certification group DNV GL and Dutch firms and institutes Enexis, a regional network operator, energy company Essent, natural gas group Gasunie, IT services company ICT Automatisering and the Netherlands Organization for Applied Scientific Research (TNO) established the PowerMatching City pilot project in 2009 in the Dutch province of Groningen with the aim of finding practical answers to problems related to the energy transition.
In 2011, a community of 40 households entered into phase two of the pilot, a real-life experiment in living with sustainable energy. The residents used solar panels, micro CHP plants and heat pumps to provide their own electricity and heat their own water using the sun, gas and geothermal heat. They also used smart software to share electricity with neighbors and activated household appliances at times that the supply of electricity from the local grid was optimal.
Pilot project results
According to a report released by DNV GL, PowerMatching City demonstrated that smart energy systems were technically feasible and that energy flexibility made economic sense. Indeed, the net gains from the consumer market could well reach 3.5 billion ($3.75 billion), based in part on money saved by grid operators by avoiding costs for investments in and maintenance of existing energy grids.
However, the study concludes that energy providers will also be able to manage their customers’ energy consumption more effectively so that they will be able to purchase energy for more competitive wholesale prices. Energy providers will also be able to use locally generated energy to match local supply and demand, which also saves costs.
Smart energy systems, which enable the balancing of supply and demand of energy, are becoming increasingly vital as the electricity supply grows ever more dynamic. With wind and solar playing increasingly significant roles in the energy transition, smart energy grids will be ever more crucial to level out fluctuations and maintain balance in the levels of supply and demand.
During the pilot, the consortium partners and the residents jointly established two energy services to facilitate flexibility: Smart cost savings enabled the residents to keep the costs of energy consumption and generation as low as possible, while Sustainable together focused on helping them to become a sustainable community.
PowerMatcher, the smart software used in the study, played a key role by matching the energy supply and demand based on the information provided by the energy providers and the consumers.
A striking result of the pilot was that the system was much more flexible than anticipated on the basis of previous studies and that the demand and supply were easier to balance than expected, DNV GL reported.
Conditions for large-scale implementation
The report says the smart and flexible energy system would need to be standardized if it were implemented in the consumer market on a large scale in order to reduce the costs of connecting the households in the smart grid as well as to lower the price of the smart energy services.
The use of standardized solutions will reduce the cost per household enabling the flexible energy system to quickly become economically viable, the report notes, but adds that energy purchasing will also need to take place on the basis of actually measured energy consumption or generation. Only then will the energy providers be able to profit from the added value provided by energy flexibility and share the benefits with their customers.