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Demand Response: which place in the future energy system - Peter SCHELL<br />
2 SECONDARY ASSET USE<br />
The key to the solution is secondary asset use. Indeed while the cost per MW of assets<br />
that are used exclusively for services to the energy system grow significantly with<br />
reduced running hours. This is true for traditional generation of course but also for new<br />
technology such as “utility” batteries. The more appropriate solution lies in the creative<br />
use of assets that have a different prime purpose but can also deliver suitable capacity<br />
to the energy system especially if it is for a limited hours a year.<br />
This means that while traditional technologies and newer technologies dedicated to the<br />
energy system will aim at covering the capacity required for a significant number of<br />
running hours, starting from the right of the graph in Fig. 1. And moving up, DR will start<br />
from the left and move down.<br />
Where they will meet should not be decided upfront by the market model but should<br />
depend on the further evolution of all technologies and approaches that compete today<br />
and in the future.<br />
3 POTENTIAL OF DR<br />
We have now defined the qualitative role DR will play. Therefore the question remains<br />
what quantitative role DR will be able to play. This will depend on the following factors:<br />
• How much capacity is needed for limited periods<br />
• How much extra potential is added through elecro-mobility, electric heating &<br />
cooling and distributed storage<br />
• How interesting the opportunity is and remains (see below) the opportunity<br />
In an optimistic scenario where all 3 of these elements are present then 2-3 GW of<br />
capacity are plausible in the Belgian context. That is about 20-25% of max load.<br />
Today already 10% of max load i.e. about 1,4 GW are realistically available assuming a<br />
full market opening. Currently there are about 850 MW already commercialized in R1,R3<br />
and strategic reserves.<br />
4 HOW TO GET THERE<br />
The key required change is a market model that will allow the fair competition for<br />
capacity that is required a limited number of hours. This obviously means giving access<br />
to the new technology an DR in particular to all markets where this capacity is traded:<br />
Balancing market, intraday market, day-ahead market and forward hedging solutions<br />
(central capacity mechanism or market based solution).<br />
But, as forgotten by most governments, it also means not subsidizing existing<br />
technologies such that they are able to enter or remain in this market not withstanding<br />
their structurally uncompetitive cost structure.<br />
In Belgium the first condition is about to be met but there is significant risk regarding<br />
the second one.<br />
Revue E Tijdschrift – 131 ste jaargang/131 e année – n° 1-2-3-4-<strong>2<strong>01</strong>5</strong> (publication mars/publicatie maart 2<strong>01</strong>7) 3