How are business models capturing flexibility in the District Energy (DE) grid?

Abstract

Flexibility in the energy system has been studied previously but few results have been implemented in district energy (DE) pricing models. This means that pricing models are not accounting for existing information making them less efficient than they need to be. We have studied if and how business models of DE firms capture flexibility in the DE grid and suggest price model updates to harvest flexibility. A systematic literature search with content analysis of resulting scientific peer-reviewed publications and project reports has been performed. Thereby, the different business models which have been described in the literature have been categorized. Based on literature, efficient price models have been identified. Another source of information is six demonstrators aiming at generating knowledge about DE flexibility. They are part of the Flexi-sync Project (ERA-Net). Findings show that most DE grids are slow to recognize and capture flexibility that can be catalyzed through end-users, thermal inertia, heat pumps and other. Similarly, DE firms employ a marginal cost logic to determine whether flexibility should be operationalized, and often their business models and price models are not oriented towards expressing that value logic to their customers. We identify that there is a potential for DE companies to further capitalize on flexibility in the energy system. By inclusion of flexibility incentives in price models a win-win can be established by cutting operational costs for the DE provider and energy consumption of the end-user.

Keywords

• District energy
• Flexibility
• Business models
• Price models
• Flexi-sync