Inspiration

Energy mismatch calls for demand shifting in 2040 (II)

It is a given that within 15 to 20 years we are going to face a huge surplus of cheap renewable electricity, but also a significant annual shortfall that cannot be covered by storage methods. This E-mismatch is going to have a major impact on prices: during moments of surplus they will be very low, during moments of shortage extremely high. What will this new reality mean concretely in daily practice soon?

We analysed the energy balance in the Netherlands according to the new energy system. We applied the average weather pattern of the past 10 years to this. Below from this time series are the energy balances of 2 random months, a summer month and a winter month. In these energy balances, positive means surplus solar and wind energy. Negative values require 'fossil power' to be added.

What turns out?

  • There will clearly be more fluctuations in summer than in winter. In summer, solar panels do their work during the day; the troughs are logically in the night.
  • Winter will show a slower alternation of peaks and troughs. After all, this one is driven by wind power. The intervals between surplus and deficit are longer here, between 1 and 5 days.
  • On balance, there will be more surplus than deficit in both summer and winter. However, the period during which the energy system can be kept in balance with storage will be too small. The capabilities of batteries and other storage systems will simply be too limited (yet).

Implications

No #1.

Variable generation does a lot to the price. For individuals as well as businesses and industries, it will matter when energy is purchased. The price spikes up and down due to solar and wind generation that occur exceptionally today (see example below, Sunday 6 June 2022) will become the new standard. Moreover, the outliers will become much more severe.

No #2.

This is both a threat and an opportunity. As these situations become more common, the incentive to adjust your consumption or business process accordingly becomes greater. For energy contracting, this means that the days of fixed-price contracts are over. Working with hourly and quarterly pricing still applies to some businesses today. This model will become the new reality for almost all customers.

No #3.

For bulk goods-producing industries in particular - glass, paper, cardboard, wood, building materials, food, packaging, bricks, and the like - periods of shortage will be too long and costs too high. For these companies, the possibilities of 'demand shifting' (shifting your energy demand) are just around the corner. There is value to be gained by adjusting production times to make maximum use of the (cheap) surplus periods. Our question then is: which processes lend themselves to this? Should you shift your operating hours or even shut down your business once in a while? Do you then send your employees home? Do you then spend that time on other work, training and so on?

We look forward to the first reactions

Let us hear from you with your thoughts, questions and insights. We look forward to hearing your responses. And look out for our next post on this topic.

More inspiration

What keeps us busy

We learn every day. About the utility industry, regulations and our profession in the broadest sense. We love to share it with you.

In the dynamic world of the energy industry, it is crucial for organisations to be agile and...
The Netherlands is committed to renewable energy, but these efforts have led to price fluctuations. In...
It is with great enthusiasm that we share the news that, with effect from 16 August last, ICE officially un...

Process & Performance

Process & Performance Professionals deal with (re)formulating and achieving business objectives in the given, sometimes strongly changing, context. Our process experts and managers use the latest methods and techniques: besides LEAN, process mining or gamification are applied, for example. Naturally, our Interim (Project) Managers steer towards achieving the previously set goal. Besides steering on hard targets, they also have an eye for people!

Operational expert

Operational Experts are able to quickly master knowledge. These professionals are at the beginning of their careers or are seasoned experts with a lot of substantive knowledge in their areas of expertise including Sourcing & Forecasting, Allocation & Reconciliation, Measurement Data and Billing.

Data & Analytics

Data & Analytics Professionals at ICE Utility Professionals focus on aggregating, providing, managing and analysing data. Besides knowledge of how to analyse data and transform it into information, our consultants also have the necessary Business and Compliancy knowledge. This allows them to optimally support you in the transition to data-driven work and protect you from the legal frameworks of privacy.

Business & IT

Getting Business and IT to work together is a skill in itself. ICE Professionals have knowledge of both Business and IT and can therefore fulfil the bridging function between users, administrators, technical designers and management. As a result, your business processes and information systems are continuously improved and taken to the next level.