Electricity reserve markets are becoming more important as the share of weather-dependent electricity generation grows, increasing the power system’s need for flexibility. For companies, reserve markets offer an opportunity to use energy more efficiently and earn additional revenue.
Production continues and revenue grows
In practice, participating in reserve markets can mean, for example, an industrial plant temporarily switching from an electric boiler to a gas boiler for steam production when electricity prices rise. Similarly, a greenhouse grower can switch off lighting for short periods when electricity prices are high.
In both cases, the company’s production continues as normal, and it receives a separate payment for the flexibility it provides.
There are five reserve markets, each with different remuneration models. With just one megawatt of adjustable capacity, a company can earn hundreds of thousands of euros a year if the reserve is available year-round.
How companies can enter reserve markets
Each reserve market has its own technical requirements. The key is that the company’s equipment can increase or reduce its electricity consumption quickly and reliably enough. This is verified through control tests.
Once the technical requirements have been met, the company signs a reserve agreement with Fingrid. It then introduces a real-time data transfer system and a trading platform.
For many companies, working with an experienced partner is the simplest and most cost-effective way to benefit from reserve markets. The partner provides reserve market expertise, takes responsibility for planning and implementing the overall solution, and ensures that the financial benefits are realised.
“Careful planning of the overall solution is important to ensure that participating in reserve markets makes financial sense in the long term as well,” Auris’s Concept Development Manager Antti Huttunen says.
“For example, constantly starting up and shutting down energy plants every 15 minutes might appear profitable in the short term. In the long term, however, it increases maintenance costs and the risk of production interruptions.”
Experience and tangible benefits
Companies often have a good basic understanding of reserve markets. However, they are not always familiar with the revenue potential and risks of different technical solutions.
“For example, energy storage systems that use electricity and store heat allow broader participation in reserve markets than conventional electric boilers, giving them greater revenue potential. On the other hand, energy storage requires a larger investment than electric boilers and, as a newer technology, is still on the verge of commercialisation,” Huttunen says.
One example of the tangible benefits of reserve markets can be found at Valio’s long-established Vaarala production facility, where Auris produces steam for Valio using electric and gas boilers.
“Reserve market revenue has quickly reduced Valio’s energy costs without affecting the company’s production,” Huttunen says.
Similar results can be achieved at other industrial sites when reserve market participation is based on careful planning, the right technical solution and long-term management of energy economics.