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Eesti Energia's flexible energy management service enables companies to earn additional revenue
Business

29.11.2021

Flexible energy management allows to make climate-friendly decisions and save money at the same time. There will be long-term benefits as well – new renewable energy generation capacities will enter the market, our energy system will operate more stably, and energy prices will move down in the long run.

  • The investment climate needs to be improved in order to develop renewable energy capacities in the future
  • By making energy devices smart, companies can tackle two challenges at once: to reduce their energy costs and their environmental footprint
  • The smart use of the flexibility of energy-consuming and -generating equipment allows us to stabilize the energy system and add more renewable energy production to it
  • Eesti Energia's flexible energy management service enables companies to earn additional revenue already today

  • Electricity prices are hitting record highs, but according to Margus Vals, Member of the Management Board of Eesti Energia, this does not mean good times for an energy company, but on the contrary: it means a big challenge to find solutions for customers to reduce their energy costs.

    Making electrical equipment smart will reduce costs

    “To look for a positive side regarding today's high energy prices, it is an understanding that the investment climate needs to be improved in order to develop renewable energy capacities in the future and reduce energy prices in the long run,” Vals said. “Looking at the 2030 perspective, the renewable energy ambitions of both Estonia and the European Union are high, but Eesti Energia's renewable energy company Enefit Green has made its latest investments in Lithuania and Poland. The best way to obtain the necessary amount of renewable energy in Estonia in order to achieve the major targets is to build the offshore wind farm that we are developing in cooperation with Ørsted.”

    The growing share of renewable energy will create a much greater need to balance the energy system when the wind is not blowing or the sun is not shining. The more expensive way to do this is to build large and expensive storage facilities and power plants, the construction and maintenance costs of which must be paid by the consumer. A more efficient and cost-effective way is to make energy-consuming or energy-generating equipment smart and take advantage of their flexibility.

    “By making energy equipment smart, companies can tackle two challenges at once: to reduce their energy costs and their environmental footprint Equipment can be operated in the energy system in such a way that the users do not notice any differences, but the result will be useful in many ways,” Vals explained. “The smart use of the flexibility of energy-consuming and -generating equipment allows us to stabilize the energy system and add more renewable energy production to it. However, if we used solutions that are simple and central at first glance, then the current high electricity prices would preserve.”

    Liwathon turned the flexibility of heating equipment to their advantage

    According to Gert Tiivas, Chairman of the Board of Liwathon E.O.S., the largest oil products terminal operator in the Baltic Sea region, the company is constantly working to find better solutions and act wisely. In particular, how to consume less electricity and gas. Managing consumption is part of the solution.

    “We store fuel in large tanks where a certain temperature must be maintained to ensure their quality, such as 44 degrees for some fuels. In addition, we have tens of kilometres of pipelines that need to be heated so that fuel does not get blocked in them. Heating is a big cost for us,” Tiivas described. “The large amount of pumped goods, the relatively low price of electricity and gas, and the lack of technological development in recent decades made it sensible to heat tanks and pipes all the time. In today's market conditions, however, this is no longer sensible, as it is only necessary to pump a certain amount of fuel from a certain tank at a time. That's why we can use just-in-time thinking and flexible energy management to get the right amount of fuel at the right time heated at the best possible energy price.”

    Mart Peling, Business Development Manager for Flexible Energy Solutions at Eesti Energia, added that since both large and small players can contribute to the energy system, Eesti Energia has focused not only on large industries but also on commercial and office buildings, as well as private customers.

    “While the focus in the world has so far been on large energy-consuming devices, then technological advances have come so far that it makes sense to install devices that enable flexible energy management for small consumers as well. For example, together with solar panel solutions, we offer storage solutions for both businesses and private customers,” Peling said. “However, thinking about industrial equipment, there is definitely great potential for cold storage in the food industry. Also for equipment that has some intertia, such as dryers in the wood industry that are very widely used and have a high energy load and consumption. In addition to logistics centres and commercial and office buildings whose ventilation and cooling equipment have some inertia and are tradable.”

    Monitoring provides additional assurance

    Although a virtual power plant does not trade with customer equipment in the energy market at all times, the equipment connected to the system is monitored around the clock. Thanks to this, Eesti Energia is able to inform customers if a failure occurs in their equipment. According to Peling, such cases have occurred and significant damage has been prevented.

    At the same time, the virtual power plant monitors what is happening in the energy markets in real time, consolidates the flexibility of the equipment currently available into one bid and enters into a transaction, the revenue of which is shared with customers.

    Energy assets from Finland that are connected to the virtual power plant earn revenue by participating in the short-term stabilization of the Finnish energy system thanks to a pilot project running in cooperation with Elering. In the Baltics, this and other energy markets are still developing, as Estonia, Latvia and Lithuania belong to the Northwest Russian energy system which is stabilized by Russia. In five years, however, the Baltics will join the Central European energy system, after which new opportunities will open up and needs arise for local companies.

    “We see that when synchronizing the electricity systems of Estonia, Latvia and Lithuania with the Central European system, market points must be created for Baltic consumers to be able to trade with the flexibility available in order to increase opportunities to earn revenue,” Vals noted. “We hope that the transmission system operators of Estonia, Latvia and Lithuania will take these steps and that these markets will emerge sooner rather than later.”

    When connecting to a virtual power plant, security is key, and it does not interfere in any way with the operation of the company's equipment. All communication and device management takes place via a secure data channel with an ISO 27001 information security certificate. The uninterruptedness of key processes is the cornerstone on which the flexible energy management service is based. We always agree with the company when and within what limits their electrical equipment may be adjusted.