Germany’s power system faces major challenges as a result of the energy transition. The country’s electricity mix has already changed a lot and renewable energy sources today already account for 25 percent of electricity production. Wind power and photovoltaic systems, in particular, are becoming pillars of the future electricity system. The system will have to cope with large amounts of volatile or fluctuating electricity being produced in ways beyond its control. As a result, flexibility will become a central tenet of the new electricity system.
At times, wind and solar plants alone will produce more electricity than is needed. At other times, these sources will be hard pushed to contribute anything to cover electricity demand. As a result, the demand for residual capacity – conventional power plants held in reserve – will be less uniform than before. Remaining conventional power plants will have to deal with more frequent and extreme load changes.
Peak times in demand for residual capacity (when low output of wind and solar power coincides with high demand for electricity) will require flexible electricity producers, storage units and electricity imports. But flexible electricity customers will also have an important role in reducing their consumption and helping to bring supply and demand into balance. Conversely, off-peak demand for residual load capacity (when high output of wind and solar power coincides with low demand for electricity) will need to make use of storage units and export electricity, as well as demanding flexible consumption at such times.
In essence, the trick will be to ensure a reliable power supply by matching generation and consumption as much as possible at all times. Competitive markets will make it possible to price electricity in such a way that consumers get an incentive to adapt their long- and short-term electricity needs. This would allow extreme situations with rapid and unexpected load changes to be managed safely. The challenge will be to enable undistorted price signals to encourage the optimal – i.e. least costly – use of all flexibility options on both the supply and the demand side.
As a result, the topic of flexibility encompasses generation technologies from fossil fuel power stations to cogeneration and biomass plants (e.g. reduction of minimum power, acceleration of start times, ramp capability), demand response, technologies that span different sectors, such as the integration of power-to-heat (turning excess electricity into heat), storage techniques and of course the power grids.
Free and fair competition should activate all options that can meet demand most efficiently. The challenge is to create a market and regulatory design that breaks down the barriers on the path to true ??flexibility, and provides a "level playing field" with equitable access to all flexibility options.