Deferred energy consumption leads to more favourable rates for Groningen businesses

Deferred energy consumption leads to more favourable rates for Groningen businesses

  • 26 November 2018
  • 8 minutes

How much can companies save on energy costs by aggregating energy consumption and flexibly responding to market prices? This is being looked into by a consortium of seven organisations in the Zuidoost Business Park in the city of Groningen. ICT Group is involved in this project with the objective of investigating which technical facilities are required to make this possible.

Large businesses with high energy consumption levels are generally highly committed to energy efficiency and the availability of flexible power. All manner of initiatives are also being introduced in the consumer market, involving aggregate supply and demand of homes in a neighbourhood. Examples of these projects include Power Matching City, EnergieKoplopers Heerhugowaard and GridFlex Heeten. The SME market, however, is not very active in this regard, even though a large proportion of energy demand in the Netherlands comes from this market. Most cities are unsure as to how to encourage this large middle tier to operate more sustainably. This is why a consortium was set up to examine methods for promoting the energy transition in the small and medium-sized business segment. The consortium includes ICT Group, Engie, Jules Energy, Enexis, New Energy Coalition, TU/e, the City of Groningen, and the Zuidoost Business Park. This is a low-threshold option for the City of Groningen to engage with small and medium businesses on this subject. We can therefore count on their full support and active participation in this project.

Aggregate demand

The generation of sustainable energy is subject to sharp peaks and troughs which do not match those of consumption, which is why future energy consumption must be scheduled to coincide with energy-generation peak hours, thereby reducing energy storage. We also refer to this deferred energy consumption as flexible power supply. This power can be used to respond to market prices, reduce peaks in the distribution grid, or to provide balancing power to TenneT. For instance, if the energy consumption of an individual small or medium-sized business is too low to be able to supply flexible power, they could turn the tables by joining forces with other businesses to aggregate their energy demand. This is relatively easy for households due to the limited number of energy-consuming appliances, which mainly comprises boilers, heat pumps and, at most, an electric car. The number of ‘energy guzzlers’ in the business market is much higher and more diverse. The consortium partners therefore focussed on finding a variety of companies with varying energy needs. Their search yielded six organisations willing to participate: a foods distributor, a cold store company that provides its services to medical institutions, a wholesaler in electric transport with a vehicle charging station, a battery manufacturer, two buildings belonging to an educational facility, and a building belonging to the City of Groningen.

Positive business case

Finding organisations that wanted to participate in the project was not easy. Companies may be willing to contribute to the energy transition, but in the end only one thing truly matters: the business case. And in the phase preceding the project, there was no clear business case yet, making this one of the main learning objectives. Businesses with high energyconsumption levels could potentially realise significant savings by obtaining more favourable rates through deferred energy consumption. However, companies on the energyNXT platform also have relatively high operating costs due to the multitude of equipment they use, and the installation process for each device has to be investigated separately. ICT Group can use the outcome of this project to make a more accurate estimate of the connection fees and potential savings. This will enable realistic estimates of future business cases for individual companies.

“I’m very curious to find out how much they could potentially save, and we’ll know soon enough, because the project is about to be launched.”

Deferred energy consumption

Not all processes are suitable for deferred energy consumption. A cold store that is normally kept at a temperature of -18 degrees Celsius can easily be cooled to -22 degrees Celsius without affecting the quality of the goods stored in it. It takes several hours for the temperature to subsequently increase to -18 degrees Celsius again. However, this is not an option for foods cold stores because they need to be kept between 2 and 4 degrees Celsius. As soon as the cold store’s door is opened, the temperature rises a few tenths of a degree. Postponing the additional cooling because energy prices are too high, is simply not an option. Some processes are more suitable for deferred energy consumption than others. Which processes this applies to is not always immediately obvious and will need to be further investigated on a case-by-case basis. One of our other learning objectives is therefore to develop a method to assess this more accurately.

Matching supply and demand

In addition to this comprehensive process with the six organisations, this project involves another process in the Zuidoost Business Park: Wasaweg Energieneutraal (Energy-Neutral Wasaweg). As part of this process, thirty businesses located at Wasaweg in Groningen interchange self-generated energy. ICT Group uses the energyNXT platform to assess which companies have an energy surplus at any given moment, and to which company it should subsequently be distributed. This also enables them to make an accurate estimate upfront for the business case for solar panels and a battery: based on energy consumption, what is the optimal capacity of a company’s solar panels and battery in order to achieve the highest possible savings? An underlying research question is to what extent a business park can become self-sufficient. Companies that have not yet switched to self-generated sustainable energy, or that are considering the purchase of additional solar panels or a battery, can benefit from ICT Group’s virtual structure and dashboard with real time information on the potential impact on their energy consumption. For instance, if the sun is shining, they will see their virtual battery charge with energy from the virtual solar panels. This allows companies to see for themselves how they could benefit from this energy transition, giving them all the information they need to make a well-founded decision.

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