Why do we need flexible demand?

In order to achieve carbon neutrality, we need to shift our energy systems away from fossil fuels, such as coal, oil and gas, and towards renewable energy, using for example wind, the sun or hydropower. That shift forces us to change the way energy systems are modelled and operated.

In energy systems, demand needs to equal supply at all time. Let’s say that we want to transform the electricity supply of an island that currently runs entirely on a diesel-fired power plant. With the status quo, system operation would mean running the diesel plant such that it constantly matches electricity demand, the latter varying continuously. If we replace the diesel plant with wind turbines, system operation is different. We cannot control the wind, so instead, electricity demand needs to be flexible, so that we can ensure that demand always equals supply. In summary, the control problem moves from the supply side to the demand side – energy system operation is flipped by 180 degrees.

So what’s the problem?

The challenge is that demand cannot be controlled as easily as supply, since it depends on when consumers choose to use devices and appliances – for example when they switch on radiators or charge electric cars, but also when factories run machines or cooling systems in data centers are turned on. We believe that future energy systems will incentivize flexibility using prices, that vary across time depending on the current state of the system. For example, if at a certain point in time, wind power generation is lower than expected, electricity prices go up, incentivizing consumers to shift their demand to another point in time, when prices are lower. And if more energy is being produced than expected, prices would drop. We do not expect that everyone will constantly have to check power prices before turning on the lights, but that consumers will have smart and fully automated control systems in their homes, which will do the job for them. 

And what does Frigg do?

To model energy systems that way, we need to incorporate dynamic price formation and the reaction from the demand side into energy system models. In Frigg, demand flexibility and consumer behaviour are modelled through a set of differential equations –  flexibility functions. And a smart dynamic price-making algorithm is run for every hour to minimise system costs. The physical side of the energy system can be modelled through well-established frameworks, such as TIMES, Balmorel or Calliope. Frigg uses data from these models, generates hourly prices and simulates the demand side. Passing an altered demand level back to the energy system model allows computing energy system equilibria that take demand side flexibility into account in a realistic way.

Frigg is currently in early-stage development at the Technical University of Denmark (DTU). The development is financed by the projects CITIES, openENTRANCE  and Cool-Data. Stay tuned for the development status here!