An Economical & Technical Study of the Participation of a Virtual Power Plant on the Swiss Balancing Market : WRITTEN IN COLLABORATION WITH SWISSELECTRICITY

Abstract: The current shift towards renewable energy resources creates volatility in the electricity production that must be compensated by nevi sources of balancing energy. To ensure a normal operation of the power system, the transmission system operators procure power reserves able to provide regulation energy through market processes. Virtual power plants are now likely to participate on the balancing markets. In this study, the technical and economic feasibility of having virtual power plants participate in the Swiss balancing market is assessed. The study begins with the evaluation and compa.rison of four European balancing market designs and continues with the clarification of the concept of virtual power plant. The focus is then set on the Swiss ancillary services market, recently open to virtual pmver plants. After a detailed market description, an economic model simulating the participation of a virtual power plant made of industrial resources on the secondary and tertiary control markets has been developed. This model \Vas evaluated on an actual market design: the Sv.riss ancillary servicel:l market. 5 cases were simulated, allowing to estimate the opportunity fom both the capacity and the energy market productl:l. The simulations indicated that an example company (based on an actual situation) could hope a decrease in its energy cost between :3 and 4% by participating in a control pool over a year. Other simulations demonstrated the greater profit expected from secondary reserves compared to tertiary rel:lerves, and the need to develop an automatized activation system. The encouraging economic study is followed by a technical overview of the envisioned system. A generic technical characterization of virtual power plant is presented, on v.rhich the Swiss use-case is later applied. The breakdown into functional requirements allowed to highlight specific issues. The design of the control strategy, particularly to deliver secondary control, as well as the hardware communication interface to use are tvw aspects that ,vill require further analysis. Additionally, on an economic level, the investment cost for remote communication modules are acceptable with respect to the economic potentials estimated in the first part, for medium­sized industrial energy resources. In conclusion, the study established the profitability of an aggregation project on the Swisl:l market but also demonstrated the need to pursue research for the project to be fully feasible on a technical level.