Demand Management Brings Electricity Autonomy to Finland

fin In Finnish

Electric car, what a great and environmental innovation! The infrastructure needed for charging and the technology of the vehicles are getting better and better. The final breakthrough will come when the retail prices of electric vehicles have gone down enough for mainstream.

At the same time, unfortunately, it must be said that charging burdens the power network, which is already having a tough time. Electric vehicles are but one accelerating phenomenon; energy consumption as a whole is increasing. Finnish Energy estimated in 2016 that by 2030 the daily need for adjustment has doubled. As consumption increases this much, mere production management is not enough. The other end has to be included in the equation as well. Luckily the Internet and digitalization come to the rescue.

The Internet of Things (IoT) brings all sorts of devices to a shared network where they can report their state and even allow manipulating themselves. For example lighting system of a building can give control to external parties according to changing needs and conditions. This enables an electricity marketplace to be created. In such marketplace, adjusting power and demand-side management are traded.

Controlling power means electricity creation which can react to changes in the balance between production and consumption. Demand-side management refers to decreasing, increasing or transferring energy demand according to the current context.

Opening up electricity trade and demand-side management enables new parties to enter the game. The ecosystem is attracting new kinds of players, aggregators. There are already signs of this in Europe. For example French and German markets have companies that do not produce electricity themselves but only resell the load of the end users they represent.

One option to implement the marketplace is to automate the trade with bots, which are popular in stock markets. When applied in electricity markets, bots’ behavior should be even more regulated and restricted than in stock markets. The functioning of the supply network should never be jeopardized because of automated trading. Furthermore, parties could only operate with bots once they have proven to meet the security and trustworthy requirements.

We at VTT propose following actions to be taken in order to strengthen Finland’s autonomy in the electricity market:

  1. Investing in demand-side management in order to create more supply from adjusting power
  2. Utilizing IoT for unleashing the latent adjusting potential in buildings
  3. Managing the consumption and production of electricity over the internet, in a manner that is open to competition
  4. Creating a market place for adjusting power, which can be used to ensure reliable functioning of electricity networks

When implemented right, an open electricity marketplace would bring stability and autonomy for Finland and even opportunities to export electricity.

The research related to real estate property demand-side management has been carried out in the VIRPAB project funded by Tekes (Business Finland). The project will end in April 2018. In addition to VTT, project partners are the University of Oulu, Fingrid, S Group, Rejlers, Jalecon, Jetitek, Green Energy Finland, Fidelix, and Emtele.

Read more from our white paper ”Adjusting Power for Future Electricity Market” about our proposed actions for ensuring Finland’s autonomy in electric markets.

Klaus Känsälä

Senior Scientist, VTT


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