Generally, market transparency and lower energy prices for consumers and new business cases and services for suppliers are some of the major goals to be achieved via Smart Grids technologies. On the other hand, the ICT components to be added to the existing energy infrastructure should serve to optimally integrate electricity produced from intermittent renewable resources and facilitate a reliable network management. These grid- and on the other hand market-dominated goals have to be balanced since excess market operations can put the network under strain and a too tightly controlled network can hamper new business models.
In order to differentiate between circumstances, in which new ICT-based market operations can be undertaken and those, in which a dominance of the grid remains to be accepted, the working group developed the so called traffic light model. The approach is not completely elaborated at this point, discussions will continue through the following years. However, first approaches and deductions from the model have been agreed upon in the stakeholder process and can be used to develop new market models and energy ancillary services. Market rules at distribution level, especially in the light of a Europeanisation of Smart Grid approaches, still need to be developed.
The different modes of the (distribution) network can be developed by means of the traffic light analogy and can in an abstracted way be described as follows:
If the distribution grid is ranging in the green zone, sufficient network capacity is available to transport all traded amounts of electricity without any obstructions. In case first hints of possible obstructions or potential bottlenecks are prognosed, they are fed into the network management system and lead to the yellow zone, in which market processes can be utilized to return the network to the green zone or to least maintain the yellow zone as long as possible in order to prevent a red zone from taking place. Such market based operations can include the switching on or off as well as the derating of generation feed-in and/or consumption applications (load shedding). However, such operations or processes can have different, partly adverse effects depending on when and where they are operated. In order to prevent a grid bottleneck , sufficient capacity at the respective feeders has to be accessible at the right time. Different options to tackle the challenges in the grid may arise and can be carried out by different actors (utilities, aggregators, storage operators etc.) who apply different leverages (generation and/or consumption and/or storage) at different prices. A functioning and transparent market mechanism needs to ensure that the least costly option is chosen for the grid oriented service provision. However, the price building mechanism and choosing still reflects the market driven character of this zone. Yet, the status changes, once the network enters the red zone, in which a critical state is either imminent or already taking place. At this stage, only the grid operator decides which transport services can still be carried out by their distribution grid and switches off or disconnects generation and/or consumption units from the grid that cannot be used any longer. Currently, German regulators are discussing the possibility of a regulated permit to switch on consumption and/or storage units during a red phase for the grid operator. As a matter of fact, many grid bottlenecks are actually being caused by excess generation from DER in Germany at the moment, and they could be countered by matching the extra generation by direct local consumption.
source: AG intelligente Netze und Zähler/Kleemann, 2012
The traffic light model according to the task force intelligent grids and meters
One central question deriving from this model is whether or not Smart Grids can actually help to facilitate the processes, especially regarding the yellow phase. Germany and other European countries are currently wondering how long their energy infrastructures can remain unchanged in an energy system that is becoming ever more decentralized and complex. The E-Energy model regions have examined whether the utilization of existing and easy to realize information and communication technologies could help to arrive at a cost-efficient medium and long term development of the energy system.
The green, yellow and red phase can also be translated to the status of the overall energy system.
The following figure delineates the options for each phase: If the overall share of renewable fluctuating energy resources in the system increases, smart ICT-based solutions can help to make optimal use of the existing capacities and delay costly grid reinforcements. However, over time the incidents during which the overall network and energy supply system will progress into the yellow zone will increase and the smart energy system will not be able to avoid red zone incidents anymore. Since security of supply at distribution level must be maintained, this will be the point in time, at which the grid will have to be reinforced structurally.
As long as the overall energy system is settled in the green or yellow zone, price signals through variable tariff arrangements or contracting based control signals can be sent. Following this method, it can be negotiated based on a first-come-first-serve-logic, who takes up the offers and who is contracted to fulfill the offers. Market mechanisms will determine the price for maintaining the energy system in the yellow or green phase. The object energy management systems on a decentralized level will determine and communicate the amount of flexibility that is accessible at a given point in time. In an optimal situation, a sufficient amount of generation units and consumption applications can be switched on or/and off to stabilize the network. If the network is put under an increasing amount of stress, the control signals have to an increasingly binding character and have to be accessible within seconds. In fact, certain types of variable tariffs, such as manually implemented time-of-use tariffs, are not suitable to be implemented in the yellow phase for grid-oriented purposes. The more the network is stressed, the more it relies on automated processes.
In the red phase, the network can send direct signals to energy management system (EMS) that are implemented without further negotiations phases and regardless of potentially entered operation parameters.
The traffic light model was chosen as it enables unbundling compliant interactions between suppliers, network operators and emerging new roles and functions in the energy system such as the aggregation function.
source: AG intelligente Netze und Zähler/Kleemann, 2012
Tools for the different traffic light phases
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