Power market: balancing pays off

The business model of Circular Energy is based on the production and sales of electrical power.

 

Our installation generates clean electricity. The installation has a short cycle to switch on and off. This allows us to become an important trading partner in the various parts of the electricity market: the APX spot market, Power Purchase Agreements, the imbalance market and the end-user market.

 

We designed our power plant to generate electricity during periods when there is too little wind to serve the electricity market. We have calculated from wind speed forecasts that our power station can generate power at full capacity at about 65% of the time. 

 

Balancing Service Provider

In order to create an international market for flexibility - or aFRR-  the Dutch Authority for Consumers and Markets (ACM) published an adjusted code for electricity balancing at the end of 2018. In the Netherlands, TenneT contracts aFRR capacity to balance the grid. In this code a new party is introduced: the Balancing Service Provider (BSP) or aggregrator. They do not necessarily have to have installations themselves, they can also manage third-party capacity. Circular Energy can take on this role itself or collaborate with an investment partner.

 

CO₂-free aFRR

To reach the emission ceiling of 12.2 Mtonnes CO₂ the Dutch electricity industry needs additional CO₂-free automatic Frequency Restoration Reserve (aFFR). DNV GL calculated that 26-37 TWh of emission free aFRR is required.

 

 

The current 7 TWh of CO2-free electricity from nuclear energy and biomass is insufficient; an additional 19-29 TWh is needed. If the Dutch export of gas is taken into account, this even goes up to 72-84 TWh. The offshore power plant of Circular Energy is capable of supplying 1.1 TWh of CO₂-free aFRR annually. This corresponds to 3.7-5.8% of the additional needs.

 

In combination with other flexible solutions such as demand management (smart grids), energy storage and interconnection with surrounding markets, this offers the required system flexibility required in light of the growth of renewable energy.