Survey: consumption management helps decrease investments in production and electricity network

Elering has completed a survey on electricity consumption management, according to which consumption management helps to decrease investments in production and the electricity network.

In the short term, consumption management can primarily be implemented on the level of distribution networks, as an alternative to modernizing substations. Consumption management should be developed in a way that would allow Elering as a system operator to implement any resulting electricity system efficiencies in the desynchronization process from the Russian electricity system in the future.

Elering’s Chairman of the Board, Taavi Veskimägi, said that implementing consumption management is important to Elering for the purpose of developing the energy market and system management. “This is a cost-effective way of getting the necessary additional capacity reserves to hold frequency in case of desynchronization, and also to regulate system balance and ensure security of supply. Consumption management presumes wider use of smart grid solutions, for which Elering has launched the development of the Estonian-centred energy infrastructure IT platform, Estfeed,” stated Veskimägi.

Consumption management is the network operators’ tool in controlling network restrictions. Consumption management helps consumers to make better decisions through price information, and this creates additional opportunities for market participants for business activities. Therefore, every electricity market participant benefits from consumption management.

According to the survey, a large part of the potential of consumption management seems to be in the distribution network. Therefore, cooperation between transmission and distribution network operators is very important and there is a necessity to consider creating a respective communication framework for them.

To realize the potential of consumption management, regulation and market organizations need to be developed further. Improvements in regulation should motivate the implementation of consumption management as an alternative to network development. If consumption management helps decrease or avoid investments in network strengthening, a motivation system should be created for network operators to support making such economically effective decisions. Implementation of consumption management solutions, and any resulting additional operational expenditures, should be balanced by decreasing capital expenditures; for example, by the possibility to postpone investments in transformers.

In Estonia, there is significant potential for consumption management in business and household sectors, and as a result, so-called aggregators play an important role in the wider spread of consumption management. Therefore, the regulation needs to be adjusted so as to allow aggregators to participate in every important market. The Estfeed data sharing platform developed by Elering pays critical attention to developing aggregating applications among other functionalities.

Elering introduced the survey on consumption management at a recent smart grid conference. The survey report and conference materials are available on Elering’s web page.