TSO – DSO – Consumer: Large-scale demonstrations of innovative grid services through demand response, storage and small-scale (RES) generation

Topic description

Specific Challenge:

The legislative proposals on the energy market that the Commission adopted on 30 November 2016 (the Clean Energy for all Europeans Package) and for which political agreement has been reached last year, in particular the revised Electricity Directive and the revised Electricity Regulation, promotes that network operators procure services (such as balancing, congestion management and ancillary services) from assets connected to the network both at transmission and at distribution level, in a coordinated way^[1]. This will enable more efficient and effective network management and optimisation, for the benefit of increased demand response and the ability to integrate increasing shares of renewables. The same pool of resources will be used by Transmission System Operators (TSOs) and Distribution System Operators (DSOs): actions by both can mutually affect each other. In cooperation with market participants and national authorities, they have to define the services they want to procure, and have to set up ways to procure them in a coordinated, transparent and non-discriminatory manner.

The focus is on one project that demonstrates the setting-up of markets and digital platforms where electricity TSOs and DSOs can procure grid services from suppliers, aggregators and possibly individual consumers. The focus is also on demonstrating how suppliers, aggregators and possibly individual consumers can use large-scale and small-scale assets/devices owned by consumers and connected to the electricity network to deliver such services to TSOs and DSOs, at a large-scale, i.e. at a size that has a systemic relevance for TSO and DSO operations. The aim is to demonstrate how such markets and platforms will increase cost-efficiency in (future) network operations and create consumer benefits by rewarding them for flexibility in energy (production or consumption) or power through the delivery of grid services, and to facilitate the implementation of the demonstrated markets and platforms by other TSOs and DSOs. Therefore, the markets and platforms should enable the integration of relevant digital technologies like Internet-of-Things, Artificial Intelligence, cloud and big data services.

The selected project should build on experience and best-practices from previous and ongoing projects (in particular those supported under the call LC-SC3-ES-5-2018-2020 in 2018), and aim to deliver one set of protocols and standards with respect to platforms for the procurement of grid services. Building on existing projects, the project will define, test and demonstrate in real-life the operation of integrated, system-based and coordinated markets and platforms, that TSOs and DSOs jointly set up with suppliers and aggregators (but that can also be operated by other parties), for (a set of) grid services, in particular balancing, congestion management, ancillary services. The selected project will also define, test and demonstrate how DSOs and TSOs procure and use these services in a coordinated, transparent and non-discriminatory manner for grid management purposes, in a way that:

• will contribute to the development of a seamless pan-European electricity market that makes it possible for all market participants (if necessary via intermediaries such as energy suppliers or aggregators) to provide grid services in a market that is transparent and non-discriminatory;
• enables TSOs and DSOs to improve predictability and anticipate network problems, through the procurement of services via markets that incentivise connected consumers, buildings, devices (including small-scale generation) to adapt their energy (consumption or production) or power;
• facilitates scaling up the platforms and markets to spread its use by making it as easy as possible for suppliers, aggregators or consumers directly to offer grid services based on other or new small-scale and large-scale assets/devices on these markets, if necessary through as easy and automated pre-qualification processes as possible, Facilitating scaling up can also be done through integrating new services into existing platforms and/or links new services to existing markets as much as possible, by taking into account the ability to integrate future network services that support the energy network transition (e.g. those needed in scenarios with large RES penetration) and by being compatible across borders in line with EU rules, including applicable rules on market coupling and balancing;
• demonstrates scalability to deal with the increasing amount of data coming from more and more connected assets/devices that can provide grid services and requires near real-time big data processing, by developing and testing the appropriate ICT infrastructure;
• allows procurement based on the specific location and grid conditions (if necessary);

The selected project also will:

• Define the needs of network operators for system operation, and turn these into services and products, based on interaction with suppliers, aggregators and energy service companies, that test what services can be provided by what assets;
• define and test 1) standardised products and key parameters^[2] for grid services; 2) the activation process for the use of assets for these services; 3) the settlement process for payment related to these services; 4) simultaneous procurement of these services by a TSO and a DSO from assets in the DSO network that are connected to that TSO’s network;
• recommend a limited set of standardised products and key parameters^[2] for grid services that as reference for any TSO or DSO in the European electricity market;
• Verify the effectiveness of the services and products with respect to the technological capabilities of the assets (e.g. duration, ramp-up/ramp-down, islanding), including to ensure reliability of supply under different network conditions;
• Design and develop ICT systems and infrastructure that will facilitate open (non-proprietary) standardised and interoperable multi-party data-sharing and facilitate scaling-up, including across borders (at least in the EU), between all actors that use the markets and platforms for grid services. This shall be based on a description of the technical requirements and the specifications at the level of the interfaces required for the markets and platforms for grid services (e.g. between DSOs and TSOs: TSOs and TSOs; DSOs and DSOs; TSOs and suppliers/aggregators/consumers/prosumers; DSO and suppliers/aggregators/consumers/prosumers) and shall include ways to effectively address cyber-threats.
• make use as much as possible existing open reference architectures, such as FIWARE, and ongoing developments, in particular through a close cooperation with the projects selected under the call ‘DT-ICT-11-2019: Big data solutions for energy’;
• Aim to deliver one set of protocols and standards with respect to platforms for the procurement of grid services;
• Identify the relevant system data that enable market participants to better assess and forecast the need for grid services and publish such data (as much as possible);
• Test innovative ways to promote consumer participation, engagement and perception, such as peer-to-peer trading, and innovative ways to secure transactions, such as via distributed ledgers and blockchain;
• investigate the possibilities for innovative pricing and compensation (including through local markets) for consumers that own or use the assets that provide the grid services, taking into account tariff and tax systems;
• Provide recommendations to TSOs and DSOs for improvement paths in system operation to enable the integration of new services and products in system operation;
• Include a credible business plan to ensure that the tested and demonstrated platforms and markets will continue operation (and further will be further replicated/developed by as many other TSOs and DSOs as possible) in real-life after the project ends;

In relation to the organisation, the selected project is expected to:

• Make use of financial support to third parties for at least 2.5% of the EU contribution to the project for the incorporation of developers (SMEs and start-ups) of innovative energy services (in particular for household consumers).
• Cooperate with projects supported under the topic LC-SC3-EC-3-2018-2020 that approach the challenge more from a consumer’s perspective and work with Digitisation of Energy projects, funded under the following topics:
  • SC3-ES5-2018, and ensure that selected projects build on the ongoing work of those selected in 2018;
  • SU-DS04-2018-2020: Cybersecurity in the Electrical Power and Energy System (EPES): an armour against cyber and privacy attacks;
  • DT-ICT-10-2018: Interoperable and smart homes and grids;
  • DT-ICT-11-2019: Big data solutions for energy;
    as well as with the projects funded under topic LC-SC3-EE-13-2018-2019-2020: Enabling next-generation of smart energy services valorising energy efficiency and flexibility at demand-side as energy resource where innovative consumer energy services will be developed and tested regarding their business viability and consumer acceptance.
    For this purpose, proposals must foresee a work package for cooperation with other selected projects and earmark appropriate resources (5-10% of the requested EU contribution) for coordination and communication efforts and research work associated with cross-cutting issues. This collaboration will be formalized in a dedicated work package.
• Coordinate their work with NRA's, ENTSO-E, the DSO organisations and other stakeholders and take into account the experience from other projects through cooperation in the BRIDGE initiative^[4]. An indicative budget share of at least 2% of the EU contribution is recommended for the cooperation activities under the BRIDGE initiative.

TRL will range between 5 and 8 (see part G of the General Annexes).

Proposals should comply with the requirements stated in the section 'Common requirements' of the introduction to the part on the Smart citizen-centred energy system.

The Commission considers that proposals requesting a contribution from the EU of between EUR 20 to 22 million would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Solutions will demonstrate how markets and platforms for grid services will enable cost-efficient model(s) for electricity network management and integrate higher shares of renewables to support the energy transition. Solutions will also demonstrate how markets and platforms for grid services can be implemented at systemic level in real-life and how they can be scaled up and are replicable across the EU energy system. Solutions will also contribute to opening up significant new revenue streams for consumers and (small-scale) producers to provide grid services, and increase the hosting capacity of RES in the electricity system through smart grid management. They will provide the foundations for new network codes, for example on demand-response.

Open Innovation
RRI

[1]see a.o. the proposed Guideline on Electricity Balancing, Article 31 and 32 of the Directive on the internal electricity market, COM(2016)864, 2016/0380(COD), Article 53 of the proposal for a Regulation on the internal electricity market, COM(2016)861, 2016/0379(COD) [ to be updated when legal texts are adopted

[2]where such parameters don't exist yet at EU level

[3]where such parameters don't exist yet at EU level

[4]http://www.h2020-bridge.eu/