Overview

The first factsheet presents some insights into metering as an enabler for consumer-focused flexibility, and gives a brief overview of the two generations of smart meter roll-outs in Sweden, as well as the national regulation of minimum functional requirements for electricity meters.

In spring 2021, the Swedish Energy Markets Inspectorate submitted a report to the Government with recommendations on how to facilitate the concept of independent aggregators in Swedish legislation. The second factsheet aims to summarise the main analysis and recommendations of the report.

The third factsheet presents some insights into price signals and consumer flexibility, and gives a brief overview of the characteristics of dynamic electricity pricing, as well as some food for thought going forward.

Building on the first initiative on Experimental Sandboxes (2019), ISGAN has organized a follow-up project (2021) with a series of interactive knowledge transfer workshops and accompanying activities on maximizing policy-learning from Regulatory Experimenting programs or initiatives.

Three international workshops and several interlinked workshops at the national level have focused on questions regarding relevant actors, the orchestration of actors, the role of transformation strategies, effective policy learning processes, and legal prerequisites for Regulatory Experimenting. During the course of the project, it became clear that a broader view on experimenting helps to position national initiatives without losing focus on how to maximize learning from these. Therefore, the concept of Regulatory Experimenting was adopted, which contains a wide range of tools for supporting innovation.

The casebook provides some of the best practices of regulatory sandbox program and smart grid projects under that framework from 10 countries as well as four key policy messages that were formulated by the ISGAN Sandbox KTP Project Team and the transdisciplinary group of participants in the workshops, with the intention to bring it to the attention of the Clean Energy Ministerial. Four policy messages were successfully presented to a variety of stakeholders in the power sector around the world at the twelfth Clean Energy Ministerial (CEM12).

Recently, the energy market is going through drastic changes with the launch of a new climate regime and the advent of the Fourth Industrial Revolution era. Amid these changes, many countries worldwide are strategically pushing for digital transformation to address various issues arising from the pursuit of energy conversion policies. As defined by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of Germany (BMU), energy transition refers to the shift to a sustainable economy through renewable energy, energy efficiency, and sustainable development, and its ultimate goal is replacing coal or other nonrenewable energy sources entirely with renewable ones.

Thus, energy transition is the shifting of centralized nuclear and fossil-based energy systems into decentralized renewable energy-based systems. However, the critical issue behind it is to expand the use of renewable energy and reduce energy consumption through energy efficiency. As such, energy transition can be more efficient through digital transformation, which combines technology and ICT in the field of electrical energy. Therefore, the present publication examines the various cases of the digital transformation of utilities and identifies the implications of digital transformation in the transition to clean energy. Moreover, ISGAN Annex 4 aims to convey some messages, such as what the digital transformation means in terms of transition into smarter energy, its potentiality, and the most pressing challenges, to policymakers and related industries.

This paper documents the Annex 2 unified framework for assessment, prioritized assessment results by each Participant, purpose and methodology for multinational (or clustering) analysis, analysis results of common motivating drivers and driver-technology pairs of high priority at the national level as well as across all nations and to nations clustered by economies or by continent, and comparison of multinational prioritized assessment results between the 2014 and 2020 studies.

Highlights of 2020 include:

• Two very fruitful online Ex.Co. meetings, where the following topics were in the main focus:

1) Request for Extension and Strategy process(a strategy process for the preparation of the next phase of ISGAN).
2) Cooperation with other organizations, TCPs, and initiatives

• Based on the successful Knowledge Transfer Project (KTP) approach developed within ISGAN since 2016, a new process design was developed for the Regulatory Sandbox 2.0 Project
• Under the lead of the UK, a new Annex 9 on Flexibility Markets Development and Implementation was approved and officially started on January 26th, 2021.
• The CEM Horizontal Accelerator for “Power System Integration of Electric Vehicle (EV) Infra-structure” is an innovative mechanism strengthening the collaboration and capitalizing on the synergies between four CEM workstreams: the International Smart Grid Action Network (ISGAN), 21st Century Power Partnership (21CPP), the Electric Vehicle Initiative (EVI) & the Power System Flexibility (PSF) Campaign.
• ISGAN and the Power System Flexibility Campaign (PSF) organized a joint workshop “A holistic approach to low emission energy systems through the sector integration” This event took place as an official pre-event of the CEM11/MI-5 Ministerial meeting on Wednesday 16 September 2020.
• The Smart Grid Evaluation Toolkit
• In collaboration with Annex 2 and 7, Annex 4 supported the publication of policy messages on Innovative Regulatory Approaches with Focus on Experimental Sandboxes to Enable Smart Grid Deployment.
• Public SIRFN Webinar on “Testing Methods and Certification Protocols of IEA-ISGAN:SIRFN”,  October 15th, 2020
• SIRFN Fact Sheet  “ISGAN Annex 5 General Brochure”
• Joint SIRFN and related SIRFN member publications
• Micro grids vs Mega grids
• Lessons learned from international projects on TSO-DSO interaction
• inter-Annex Regulatory Sandboxes 2.0 project
• The ISGAN Academy webinars
• The ISGAN Award of Excellence
• Capturing Flexibility in Local Energy Systems Workshop

For the full activity description feel free to download the latest issue of our Activity Report below.

The growth of power generation from Non-Programmable Renewable Energy Sources (NPRES) is accompanied by a progressive decrease of the operating hours of large synchronous generators. This increases complexity and costs, for Transmission System Operators (TSOs), to keep power system operation reliable and secure, since power flows are affected by more variability and unpredictability and, at the same time, less resources are available for frequency and voltage regulation, system balancing support and congestion management.

Thanks to their fast response, flexible control and easy scalability, Battery Energy Storage Systems (BESS) can be part of the solution mix to face such issues, by contributing to the supply of Ancillary Services (AS), both in a stand-alone configuration and in support of NPRES plants and of conventional plants.

AS include traditional ones, originally tailored to conventional power plants, and novel ones, which are gradually being introduced by TSOs to meet the new needs for prompt intervention against system perturbations.

However, services characterized by comparatively slow response times and small power gradients may require large energy contributions, which may be difficult to achieve with the BESS limited energy content, while fast services, despite requiring smaller energy contributions, are not widespread (they have been introduced mainly into isolated power systems) and still lack consolidated regulatory frameworks and remuneration mechanisms. Besides, BESS investment costs, although exhibiting a decreasing trend, are still rather high.

Therefore, techno-economic analyses are needed to understand with what performance (in meeting power exchange requests and in coping with cycling aging) and with what profitability, for their owner/Balancing Service Provider (BSP), BESS could provide single or multiple services together (to look for revenue stacking in case a single service is not enough to reach investment payback).

“Power” versus “energy” services: e.g., with reference to the Italian nomenclature,

• primary and fast frequency regulation versus tertiary frequency regulation/balancing and NPRES imbalance reduction;
• secondary frequency regulation is somewhat in-between.

Remuneration schemes:

• payment for availability: remuneration for power made available (e.g., Italian pilot projects called Fast Reserve and UVAM – virtual eligible units including different kinds of technology; British Enhanced Frequency Response)
• payment for activation: remuneration for energy actually exchanged (e.g., standard AS in Italy, pilot projects in Italy)
• the two forms of payment can be present together (e.g., Italian pilot projects called Fast Reserve and UVAM).

To this purpose, a dynamic response model and a stochastic optimization procedure for BESS sizing and management have been employed in this work. According to the results obtained in the simulations (mainly based on the current Italian market rules and Grid Code specifications),

• “power” services remunerated for activation may not be profitable enough for a BESS, due to the rather small energy exchanges involved (this happens, e.g., for the Italian standard primary frequency regulation). In that case, the presence of a remuneration for the power made available could be fundamental to determine the economic attractiveness of such services.
• For “energy” services, payment for activation can be profitable, due to the rather large energy exchanges involved. The actual profitability is anyway also determined by the energy prices.
  • In the Italian Ancillary Service Market (ASM), e.g., upward/downward prices for secondary and for tertiary frequency regulation (and balancing) seem to be sufficiently high/low respectively, although further analyses of historical market results are needed, to understand the impact of bid acceptance uncertainty on BESS economic results and to inquire whether suitable bidding strategies could be put in place by BESS to become competitive on the ASM.
  • In other European countries, these services can benefit of remuneration both for availability and for activation: e.g., in Germany and in Switzerland, all the services except Frequency Containment Reserve (FCR, which has only an availability payment). In the presence of a double remuneration, higher revenues could of course be expected; however, the specific remuneration prices should be analysed, to understand whether acceptable return on investment could be obtained.

Looking at Europe, the European Commission “Study on energy storage – Contribution to the security of the electricity supply in Europe, Final Report”, March 2020, plus a questionnaire shared among the ISGAN partners show that BESS are undergoing a fast development process, especially in Continental Europe (CE) and in Great Britain (GB). In CE, this process is mainly fostered by the high level of interconnection and by the cooperation among countries for balancing service procurement: such cooperation has already led to an integration of the platforms for energy exchange and balancing service exchange. In GB, electricity markets are very mature and exhibit a high segmentation of AS, aiming at better adapting to power system’s needs, on the one hand, and at creating business opportunities for market operators, on the other hand.

BESS are already present in many European countries, both as large stationary devices and as small distributed ones (and also as electric vehicles). They are often allowed to participate in wholesale energy exchange (on day-ahead/intraday markets) and/or in AS supply (via trading in ASMs in particular). BESS usually provide FCR and automatic Frequency Restoration Reserve (aFRR), sometimes manual Frequency Restoration Reserve (mFRR) and Replacement Reserve (RR); at present, BESS installed power devoted to AS ranges from few MW to some tens of MW to some hundreds of MW; such BESS are managed by few operators, mainly BSPs.

In several European countries, rules for BESS participation in electricity markets are the same as the ones for conventional power plants. Besides, in some countries this participation is allowed only via pilot projects, although BESS can already be aggregated together and also with loads and distributed generators. Work is still needed to overcome barriers to BESS full deployment, e.g. in terms of service technical specifications and performance requirements, market eligibility requirements, remuneration schemes.

Building upon the successes of the first ISGAN initiative on the topic in 2019, the project has resulted in four key Policy Messages to the Clean Energy Ministerial and the wider international energy community. The project was selected to share these results as an official On Demand Side Event of the 12th Clean Energy Ministerial meeting, hosted by Chile.

The Policy Messages have been co-created by experts and practitioners from ministries, regulatory bodies and research institutions in 15 countries on 3 continents through a unique knowledge sharing process combining international knowledge exchange workshops with stakeholder dialogue at national level.

The focus questions that guided the international dialogue included: how sandbox programmes can be integrated into longer term energy transition strategies; the legal preconditions and exemption laws to enable sandbox programmes; how to coordinate between different stakeholders in programme implementation, and how to design evaluation processes for policy learning.

This event is the second ISGAN-PSF joint workshop at the 12th Clean Energy Ministerial meeting. This will wrap up the activities of the PSF and ISGAN. The ISGAN and PSF look at flexible resources through three pillars, market design, digitalisation, and sector-coupling. The event will focus on solutions that have been deployed and the gaps that need to be filled. The event will highlight areas of critical importance to improve power system flexibility, stressing the link between research projects and policy-making.

For more information about the PSF, please visit: Clean Energy Ministerial website

Building upon the successes of the first ISGAN initiative on the topic in 2019, the project has resulted in four key Policy Messages to the Clean Energy Ministerial and the wider international energy community. The project was selected to share these results as an official On Demand Side Event of the 12th Clean Energy Ministerial meeting, hosted by Chile.

The Policy Messages have been co-created by experts and practitioners from ministries, regulatory bodies, and research institutions in 15 countries on 3 continents through a unique knowledge sharing process combining international knowledge exchange workshops with stakeholder dialogue at the national level.

The focus questions that guided the international dialogue included: how sandbox programmes can be integrated into longer-term energy transition strategies; the legal preconditions and exemption laws to enable sandbox programmes; how to coordinate between different stakeholders in programme implementation, and how to design evaluation processes for policy learning.