Power grid too out of balance
By Michiel de Vries · 2 minutes ago · Edited: 2 minutes ago
© ANP / ZonneplanRTL
Grid operator TenneT has had to take measures to keep the national electricity grid in balance. The cause: the arrival of parties that respond quickly to price incentives in the so-called imbalance market, such as with smart home batteries. It is expected that it will become increasingly difficult to earn money quickly via this route. “You have 0.0 guarantee to recoup such a battery in six years.”
It sounds great: making money with a smart home battery by charging and discharging very quickly. However, it causes headaches for TenneT, because this rapid response has negative consequences for the balance quality of the electricity grid.
It’s all about the imbalance market. That is very different from the normal energy market for consumers. There the price, for example 30 cents per kilowatt hour, is fixed for a few months or a few years. Anyone who opts for a dynamic contract will receive a different price every hour, but will know the prices a day in advance. Sometimes you pay 5 cents, other times 50 cents.
Per fifteen minutes
On the imbalance market, prices vary per quarter of an hour and those prices can be much higher or lower. The information is passed on with a delay of a few minutes.
Consumers are not directly active in this market, but indirectly they are with a smart home battery. These batteries are controlled by providers such as Zonneplan (Nexus), Tibber (Homevolt), NextEnergy (Huawei) or Frank Energie (SolarEdge).
Because electricity prices can be much higher or lower on the imbalance market, in theory you can make money quickly. For example, sometimes you receive one euro per kilowatt hour for supplying and a little later one euro per kilowatt hour for purchasing.
How is that possible? Simply put, this compensation is paid because you help balance the electricity grid. This is when more or less energy is suddenly generated than expected, for example because the wind is blowing harder or softer than predicted the day before.
This way you can earn money by charging or discharging a home battery several times a day.
Recoup the purchase price of the battery
However, there are no guarantees. There are more and more parties that ‘help’ to restore the balance. Solar parks, for example, can also quickly shut down at negative prices.
The current practice is that people respond so quickly to price incentives that a surplus often turns into a shortage or vice versa within fifteen minutes. This fluctuation is seen by the grid operator as very undesirable.
Control state 2
If that happens, then in technical terms this is referred to as regulatory situation 2. In such a situation, parties must pay for the unwanted fluctuation. To avoid this ‘fine’, batteries will charge or discharge very quickly within 15 minutes to reach a balance of 0.
TenneT is done with these types of practices. The grid operator has been seeing unwanted fluctuations in the ‘for some time’national wealth imbalance‘, and previously called for purchasing or supplying less power. This yielded too little. “We have noticed that some providers do not listen to that instruction,” says TenneT spokesperson Jorrit de Jong.
Every five minutes
As a result, a new measure came into effect last week. From now on, participants in the imbalance market will receive information less quickly about the current balance situation. Instead of every two minutes, now every five minutes. The hope is that this will result in a slower response.
These measures are there for a reason, says De Jong. “The frequency of the electricity grid can fluctuate too much. That is dangerous. You can then experience very major disruptions. Sensitive equipment can also be affected by this.”
Golden mountains
De Jong says that the grid operator does not know exactly which party or parties ignore the instructions. The spokesperson says he is particularly concerned about companies in the energy market that promise customers ‘mountains of gold’ with home batteries.
“The amount of electricity in this market is very small,” adds Anton Tijdink, electricity markets expert at TenneT. “That’s why I’m concerned about the stories that you can make a lot of money with home batteries. Anyone who wants to make money by smartly purchasing and selling electricity should see solving imbalances as the icing on the cake. Imbalance is not the cake itself.”
One of Zonneplan’s customers shares information about his home battery:
‘Revenue model with 0.0 guarantee’
Battery expert Dennis van der Meij of Solar Engineering expects that the proposed revenue models for home batteries will ‘crumble rapidly’. “By reacting too quickly to a lot of assets and because we all want to grab that money at the same time.”
There is also something else: the more parties become active in this market, the lower the further revenue model. He calls it in his popular LinkedIn-posts a ‘cannibalization effect’. “That 6-year payback has 0.0 guarantees. Not a nice story, but fair!”
He calls for using generated solar energy as much as possible. “If you don’t solve a problem and just make money? Then you harm the collective by throwing the problems over the fence.”
Solar plan response
Zonneplan, one of the providers of home batteries, stated in a response that it sees TenneT’s intervention mainly as a warning and expects the grid operator to stick to a temporary measure. “We therefore consider the expected impact on earnings to be limited.”
The company says it is working to actively showcase the battery in other energy markets. “I can imagine that – where possible – this will now gain some momentum,” says a spokesperson.
TenneT’s task is to maintain frequency
The high-voltage network operates at a frequency of 50 Hz, which has been agreed in Europe. It is TenneT’s task to maintain this frequency by allowing connected parties to keep supply and demand in balance. Consumers could notice frequency fluctuations in their alarm clocks and clocks, which can no longer keep time. “But high-value industries can also be affected.”
Power Grid Too Out of Balance
By Michiel de Vries, but for us, just a mere backdrop to unleash our comedic mayhem!
So, as it turns out, our power grid isn’t just a wire-wrapped miracle keeping our homes lit and our Netflix binging uninterrupted – it’s a dramatic stage for a bizarre show that makes “The Office” look like a documentary. Enter TenneT, the grid operator, at the heart of this tale of electrons gone rogue.
Charge and Discharge: The Great Balancing Act
Ah, the imbalance market. It sounds more like a progressive rock band than an energy market, and frankly, it’s causing TenneT to lose its collective marbles! People are getting smart home batteries to charge and discharge like a hyperactive toddler with a sugar rush, but alas, it’s all fun and games until someone—aka TenneT—has to step in and play referee.
Imagine making money by playing with batteries—like Pokémon, but instead of Pikachu, it’s just you desperately trying to convince your friends that your excitement over renewable energy batteries isn’t just a midlife crisis! “Look, I’m an eco-warrior, I swear!” Someone tackles that by going, “Really? You pay how much for charging? Oh, you mean it’s another way to lose money? Right.”
The 15-Minute Tango
You see, the imbalance market is a dance floor where the music changes every fifteen minutes! Keep up, will you? One moment you’re cha-chinging with your battery draining value like a Netflix subscription, and the next, you’re backpedaling faster than a politician caught in a scandal. “Oh, look, I’m suddenly paying 50 cents! Dang it! It was supposed to be our happy dance.”
Meanwhile, TenneT is sweating bullets because people appear to dance too quickly, turning surplus energy into shortages faster than I can dodge a relationship discussion!
Every Five Minutes: Slow Down, Speedy!
So, TenneT recently decided to play the “let’s slow everything down” card. Instead of getting updates every two minutes about the grid situation, they now get them every five minutes. That’s a bit like telling an overly caffeinated squirrel to chill! “Buddy, you have to pace yourself; we’re just trying to keep the lights on, not win a race!”
Jorrit de Jong, TenneT’s spokesperson, is essentially here saying, “For the love of all that’s bright and good, please stop with the immediate responses or risk blowing up the whole operation!” He’s got a point—fluctuations are bad, and I’m not just talking about my weight fluctuating around the holidays!
The Lowdown on Profitability
Now, you’d think with the promises of battery-fueled riches being hurled around like confetti at a New Year’s bash, people would be raking it in! But in reality? It’s about as reliable as that one friend who promises to show up at 7 PM and then just ghosts you. Spoiler alert: it’s a ‘0.0 guarantee’ revenue model. Hard pass!
Enter our comic relief: Dennis van der Meij from Solar Engineering, who mirrors my sentiments with “That revenue model is crumbling faster than old bread.” And boy, isn’t that the truth? Everyone’s aiming for quick bucks, but the battery market is starting to resemble a game of musical chairs played by squirrels rather than a golden opportunity.
Consumer Confusion: Who’s in Charge?
TenneT is scratching their heads, wrangling with the knowledge that not everyone is playing fair. The promise of abundant money from home batteries is, let’s be honest, about as trustworthy as a magician in Las Vegas. “Watch closely, folks, your money has vanished!”
Zonneplan thinks it’s just a warning, like that time your mom told you to wear a jacket when the wind was blowing 60 mph, and you promptly ignored her fabulous advice. “Ah, it’ll probably blow over. What’s the worst that could happen?” Classic consumer optimism, isn’t it?
Conclusion: Keeping the Balance
In the end, maintaining the electricity grid’s frequency is TenneT’s number one priority. And while this kaleidoscope of chaos might feel like a sitcom plot twist, it’s very real. “How real?” you might ask. Well, if the frequency starts going haywire, your alarm clock might just decide it’s time for a holiday, while high-value industries could experience a power outage that could make anyone tear their hair out—and let’s be real, nobody wants that headache.
So here’s to the balance, the batteries, and a little less chaos! Let’s charge wisely before the only guarantee we have is an electrician and a very, very hefty bill.
Grid operator TenneT has implemented crucial measures aimed at stabilizing the national electricity grid due to increasing volatility. This imbalance in the grid is significantly attributed to the emergence of various participants who exploit price incentives in the imbalance market—most notably smart home batteries that can respond instantaneously to pricing fluctuations. Experts caution that as competition intensifies in this market, the financial returns for utilizing such batteries may diminish, with some projections suggesting that “there is 0.0 guarantee to recoup the investment in a battery within six years.”
While the concept of profiting from a smart home battery through rapid charging and discharging is appealing, it has inadvertently created challenges for TenneT. This swift responsiveness to market prices disrupts the overall balance quality of the electricity grid.
The imbalance market significantly differs from the conventional energy market that most consumers are accustomed to. While fixed price contracts can last for months or years, dynamic contracts offer hourly pricing, allowing consumers to plan based on expected costs. However, on the imbalance market, prices fluctuate every 15 minutes, leading to potential volatility.
Per fifteen minutes
On the imbalance market, prices can swing dramatically every quarter hour, with pricing updates arriving with a slight delay. Understanding this market is essential for realizing its potential, especially for smart home battery users.
Although consumers are not directly involved in the imbalance market, they participate indirectly through smart home batteries managed by various providers like Zonneplan, Tibber, NextEnergy, and Frank Energie. These companies capitalize on the price discrepancies, creating opportunities for individuals to earn money swiftly based on real-time pricing variances.
In theory, the imbalance market offers lucrative opportunities; it is possible to earn as much as one euro per kilowatt-hour for supplying energy, and subsequently, one euro per kilowatt-hour for consumption within short time frames. This rapid back-and-forth makes it enticing yet unpredictable.
However, securing consistent returns is fraught with challenges. The number of players looking to stabilize the grid includes not only battery owners but also solar parks that can quickly halt their energy supply if prices turn unfavorably.
Control state 2
When fluctuations in energy supply and demand occur too rapidly, it triggers a regulatory situation referred to as control state 2, which results in penalties for those causing instability. To mitigate this, batteries are programmed to charge or discharge swiftly within a 15-minute window to help realign the grid balance.
TenneT has grown increasingly frustrated with ongoing fluctuations in the national electricity imbalance and previously attempted to stabilize the situation by urging participants to either purchase less or supply more power. However, compliance was lacking, prompting TenneT to introduce new measures to address these challenges.
Every five minutes
This latest initiative means that the speed at which participants receive information regarding their balance status will slow from every two minutes to every five minutes, allowing for a more gradual response to price signals in hope of stabilizing the grid further.
TenneT’s spokesperson Jorrit de Jong emphasizes the importance of protecting the integrity of the electricity frequency. This is critical as excessive fluctuations could lead to significant disruptions, impacting even sensitive equipment and overall grid reliability.
Golden mountains
While the grid operator is investigating the parties that may be disregarding its guidelines, there is particular concern regarding companies promising consumers unrealistic financial returns from home batteries, suggesting a detrimental impact on the energy market. Anton Tijdink, often associated with TenneT’s electricity market insights, remarks, “The total energy available in this market is quite limited,” underscoring the irrationality of claims regarding substantial earnings from home battery transactions. He encourages potential investors to view imbalance trading as supplementary rather than foundational for profit.
Battery expert Dennis van der Meij of Solar Engineering expresses skepticism about the long-term viability of proposed home battery revenue models, warning of the rapid decline of these schemes driven by collective enthusiasm from multiple participants vying for quick profits in an overcrowded market.
Solar plan response
In response to TenneT’s measures, Zonneplan stated that it views the intervention as more of a cautionary signal and anticipates that the adjustments will only have a modest impact on earnings. The company is proactively seeking to showcase the versatility of batteries in alternative energy markets to maintain momentum.
TenneT’s task is to maintain frequency
The European high-voltage network must adhere to a stringent operational frequency of 50 Hz, which falls under TenneT’s jurisdiction to maintain through effective management of the grid’s supply and demand. Disruptions in frequency can manifest in minor inconveniences for consumers, such as clocks that lose accuracy, and have the potential to adversely impact high-value industries as well.
What challenges does TenneT face in maintaining stability within the imbalance market while allowing energy trading to flourish?
P>But let’s not get too bogged down in the technicalities! Picture this: the imbalance market is like a land filled with golden mountains of potential profits, but navigating these peaks without tumbling into an avalanche of financial losses is no small feat. Those sweet euro per kilowatt-hour dreams can quickly transform into nightmares of high-voltage confusion if TenneT can’t get a grip on the chaos.
As the electric ecosystem evolves, the need for stability is paramount. TenneT is playing the role of the stern yet benevolent parent here, trying to curb the overly exuberant energy responses that could lead the grid into a spin, much like herding cats with tiny batteries strapped to their backs. “Please, energize responsibly!” they seem to echo as they call for more calculated moves from all players involved.
Conclusion: The Ongoing Balancing Act
We’re left to wonder: can we ever achieve the utopian balance that TenneT envisions? With everyone trying to cash in on quick profits, it feels like we’re all in a game of energy roulette—will it be a jackpot or a bust? Here’s hoping that amidst the power struggles, we can find a tuneful harmony instead of a cacophony that sends our clocks into an existential crisis!
So, here’s to TenneT, the brave souls trying to keep the lights on without getting their circuits crossed. May they continue to tackle this electric ballet with finesse while we, the consumers, adapt to the wild west of energy trading like seasoned cowboys on a renewable range. In the world of energy, let’s charge ahead, but perhaps take it a little less energetically!
