We believe that when nuclear and coal/lignite plants are gradually closed down, allowing market prices to move freely, there will be sufficient market incentives for setting up decentral, green flexibility options of renewable generation as well as running existing loads more flexibly to absorb scarcity and excess situations and supply the short-term flexibility in between. The flexibility principle of the future energy market will then be: first shift, then store.
Europe’s electricity markets will gradually converge to form an electricity market in which hydro plants from Norway, Austria and Switzerland and solar farms in the Iberian Peninsula and Italy provide power to central Europe in times of scarcity. At the same time, the flexible capacity of Europe’s electricity consumers will be activated – supply and demand will dance with each other to find a perfect balance.
This complex and delicate dance of millions of decentral units will have to be choreographed by a digital utility in the center. Next Kraftwerke has sought out this role and developed a successful business model around it. It is thrilling to speculate how this vision might unfold and how the concept of variable demand responding to prices might evolve over time.
*Mc Kinsey 2014: „Beyond the storm – value growth in the EU power sector.“
This text is an excerpt from an essay by Helen Steiniger, Next Kraftwerke:
“Virtual Power Plants: Bringing the Flexibility of Decentralized Loads and Generation to Power Markets”
published in: Sioshansi, Fereidoon P. (ed.), “Innovation and Disruption at the Grid’s Edge”, Elsevier Academic Press, Chapter 17, (p. 331-362)
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With the rise of renewables all over the world, we are facing a gigantic transformation of the global energy system. The Virtual Power Plant answers the demands of the decentralized energy world and opens up new business prospects for its participants and, of course, RES aggregators. We help you utilize them in the best possible way.