Expected Impacts

The concept of vertically nested systems, that GIFT solutions is based on, leads to the optimised operation of processes at each hierarchical level, thus supporting local balancing of energy: The lowest-level system corresponds to prosumers, the next one to a city community (micro-grid) or a subsystem in the balance group and the third one to a balance group in cross section with a DSO territory. In GIFT, local balancing of energy (and RES) is triggered by economic optimisation of an objective on the level directly above, via trading of operational flexibilities, which gives increased adaptation capacity to all the levels of the distribution grid. The approach ultimately allows an economically feasible, secure and stable way of absorbing an increased share of intermittent – and distributed – renewable energy sources. The impact is further enhanced as concepts are grounded on the harmonised electricity market model (ENTSO-E, 2015), which is the base and the target model for all evolving EU national models. This also give it a powerful starting point for accessing the global market outside Europe.

Several attempts to quantify levels of hosting capacity of renewables in distribution feeders within safe margins for voltages and thermal limits produce average figures in the range of 20-30% of capacity with respect to peak loading conditions (Degner, et al., 2011) (Hoke, Butler, Hambrick, & Kroposki, 2012), although depending on topologies and RES connectivity these numbers of capacity margins for safety operation can be much higher or lower for some specific cases. Higher percentages of renewables, leading to the desired 100%, are only economically feasible with low cost (i.e. €0.05/kWh.cycle) electricity storage.

High price for diesel generation on islands, as mentioned in the work programme, stems mainly from a) fluctuation because of intermittent RES generation, b) limited balancing energy available from upper-level system and c) high maintenance costs for stand-by generators. Technologies in the GIFT project will allow holistic optimisation of energy sector, encompassing several domains. GIFT generation capabilities are divided into two categories:

• –  Virtual energy storage, which extracts flexible energy from underlying processes and is therefore the most efficient way of solving transients on the grid. This part of the project addresses short term generation, mostly used for balancing. Prices of reserve energy are higher even on the mainland, therefore it is expected to have significant reduction of the price for reserve energy on the islands.

• –  Explicit energy storage solutions, which bring also long-term price reduction using sustainable materials and generation technologies, as well as capabilities of combining several energy vectors. Together with above energy management systems, storage solutions can bring overall optimum for each hierarchical level of the system.

  To allow for holistic management of complete demonstration environment (and later on complete island), it will use advanced Virtual Power System (VPS), which will allow for techno-economic optimisation. Flexibility trading, which is the core part of VPS technology, includes price information as a main component. Price is defined by each underlying system and is based on local techno-economic situation. By using energy prices as one of the main optimisation criteria, GIFT ensures that included solutions are always competitive and that prices for virtual and explicit storage and generation are constantly trackable.

0. This will be achieved by a combination of solutions and measures:

• –  Virtual power plant, with automated trading of flexibilities of active consumers, prosumers and

  producers, using energy storage in all types of energy carrying media

• –  Enhance Distribution management system with functionality

– for real-time short term predicting of operating modes of the grid with sufficient geographical granularity to enable local balancing and congestion prevention

– calculation of energy transfer costs between two topological points on the grid

• –  Use dynamic pricing in trading energy flexibilities to augment the available flexibilities;

• –  Establish local – island wide energy flexibility market (for connected islands) ; Establish appropriate business model for DSO or BRP as a cellular subsystem in the TSO territory

The GIFT project will support implicitly and explicitly the reduction of fossil fuels. On the lower level of energy system (within consumer/prosumer) it will be introduced several innovative technologies, which will allow efficient storage, cogeneration capabilities, cost-based optimisation, taking into account equilibrium of complete system. With virtual storage systems, flexible energy from processes will be extracted. Such an energy is completely green, since it is energy not used. It is also very cost effective, since you are not consuming in peak hours. Based on techno- economic parameters, virtual storage can also extract flexible energy by significantly reducing process output, which would introduce additional costs. Those costs are automatically included into prices for flexibility trading process and are therefore part of the energy costs.

Virtual energy, extracted from processes is “emission free” and therefore directly contributes to performance indicators 6 and 7.

Providing ancillary services for BRP will be one of the main tasks of integrated VPS. Based on automatic short-term predictions of operation states on the grid, VPS will provide flexible energy, capable of activating in close to real time. This will allow BRP to a) utilise emission free resources for balancing the local grid and b) reduce the number of stand by generators and eventually replace them with VPS.

Integration of EVs may lower the burden of emissions on transport domain, but sudden increase of electric energy demand, combined with fluctuation form RES generation, could actually increase overall footprint, since great increase of reserve energy would be required to account for the charge. The GIFT project aims to address transport domain by strong interaction with electricity domain. This way, it is ensured that a global optimum is reached.

To achieve sufficient results, the GIFT project aims to include several flexible consumers or prosumers. Those participants will be demonstration cases for virtual and explicit storage solutions and will be the parties who would trade their flexible energy with VPS. Prosumers fall under several categories:

1. a)  Harbour with ships
2. b)  EV charging stations
3. c)  Factories and large buildings
4. d)  End-users, who will install innovative storage solutions

To achieve significant adoption and to reach goal KPIs, several prosumers will be included into the project. Actual number will depend on the situation on the island, power and energy capacity of the prosumer, process characteristics, number of EVs present on the island, etc.

To achieve strong penetration of GIFT solutions, several business cases will be conducted, that will reflect situations on specific islands.

The approach and methodology followed by GIFT considers both scalability (up or down) and replicability of the solution technologies delivered throughout the project. In particular, our approach will show how separate, established smart-grid technologies can work together, in an integrated fashion, in a diverse and complimentary set of real-world trials of varying scale. This is achieved by

• –  Using as the base the harmonised market model, which ensures replicability of the individual solution technologies to any other environment with compatible conditions and assumptions (most EU countries),
• –  Selecting the use cases that represent various levels of scale of the solutions (balance group -> micro grid or subgroup -> prosumer of different types and size), and

• –  Selecting the “multiple lighthouse” approach – i.e. Designing the use cases so that each solution technology is tested and optimised to a specific environment in at least two demonstration cases.

  This indicator refers to what will be demonstrated “at least”. It shall be joined by the replication & follower numbers.

The approach followed by GIFT allows easy access to energy flexibility market services for the distribution grid operator who can therefore exploit demand response in order to improve stability and adaptation capacity of the network, when needed to avoid congestion and operate within prescribed margins. The cost of the grid operator for access to flexibility services is justified by technical and economic considerations for the user – DSO/DNO: avoided costs of further investments into grid capacity, reduced costs for network service charges (e.g. peak reduction) and avoided penalties for compliance with grid regulations. While providing the economic basis for engaging DR, this approach necessitates and stimulates “smartening” of the grid through better observability and improved close to real time predictions of the local conditions on the grid; localised prediction also enables localised offer of DR.

Because of the reduction of fossil fuel use, one of the direct correlation is the reduction of CO2 emissions.

The burning of fossil fuel is not only responsible for CO2 emissions, but also for the emissions of particles in the atmosphere and thus, a degradation of the air quality. By lowering the use of fossil fuel, the GIFT project will participate to improve the air quality and thus, the health of the islands’ inhabitants.

By providing solutions that allow an easier and better integration of RES into the grid, the project will indirectly foster the renewable energy sector as it will be easier for islands to invest in them, knowing that they have solutions available for their integrations. Investments and growth of such a sector will indirectly lead to a creation of jobs in the EU, both for the renewable energy sector and for the flexibility of the grid sector, including the consortium members.

For the islands participating in the project and switching to renewables, it is expected that a positive impact on tourism will be observed. It has already been observed in other places and is more and more important for the image of the island. An increase of tourism in such islands has benefits for the economy of the islands involved and the possible creation of jobs.