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Balancing services – from the hands of the electricity aggregator

Balancing services – from the hands of the electricity aggregatorKey information about the project:

  • Challenge: Legal regulation that has been valid up to 2020 did not provide incentives or conditions for the users to participate in the management of electricity demand. The means were also not established for the electricity saved by the user to enter the markets of electricity, balancing and reserve power. This meant that up until now, the balancing market was open only to electricity producers themselves, as well as aggregators supplying electricity to the users at the same time.
  • Aim: The aim is to create conditions in the energy sector that would provide more opportunities to enable users of electricity to take part in the balancing in an efficient, flexible and swift manner. Aggregators could be used for this purpose: they would aggregate large users into a common system, so that, once the demand for electricity arises, such users could reduce their consumption, thus “freeing up” the power needed at that moment and contributing to the management of the balance of the system.
  • Solution: Following the Parliament’s approval of the amendments to the Law on Electricity, independent suppliers, who are not supplying electricity to users, can participate in the balancing market. Recently, an agreement has been signed with the first electricity demand aggregator in Lithuania – “FuseBox”. The new market participant will be able to ensure that electricity supply meets its demand in as little as 15 minutes, will participate in the balancing market of the Baltic States and will trade balancing energy with transmission operators. In this way, electricity consumption costs will be reduced.
  • Period of implementation: 02/2020-10/2020

More information about the innovation:

In the fall of 2020, “Litgrid” signed an agreement with the first electricity demand aggregator in Lithuania  – the Estonian company “FuseBox”. Following successful testing of the balancing services in the Lithuanian transmission system, the new market participant will be able to participate in the balancing market of the Baltic States and trade balancing energy with transmission operators,

“In seeking to encourage new participants to enter the electricity market, we have gotten ready to cooperate with aggregators. Putting aggregators in the driver’s seat is thought by us to be an intelligent, innovative solution that will provide more opportunities to manage the system in an efficient, flexible and swift manner. The main innovation here is the fact that aggregation will enable large users of electricity to participating in the balancing,” says Giedrius Radvila, head of System Management Department at “Litgrid”.

Up until June 2020, the balancing market was open only to electricity producers themselves, as well as aggregators supplying electricity to the users at the same time. Following the Parliament’s approval of the amendments to the Law on Electricity, independent suppliers, who are not supplying electricity to users, can participate in the balancing market.

The goal of aggregators is to aggregate large users into a common system, so that, once the demand for electricity arises, such users could reduce their consumption, thus “freeing up” the power needed at that moment and contributing to the management of the balance of the system.

In such a way, aggregators will allow ensuring that the supply meets the demand in the electricity system flexibly and swiftly, in as little as 15 minutes.

“Aggregators will provide a one-stop-shop solution for the activation of a few different user groups and cooperation with them regarding the reduction of electricity consumption. Thus opportunities will be created for reducing electricity consumption costs, as well as attracting more reserve power that is needed in order to ensure the balance of the electricity system,” comments G. Radvila.

As Lithuania, together with other Baltic States, prepares to connect to the electricity networks of continental Europe and to manage the frequency of its systems independently, the benefits of and demand for such flexible services will continue to grow. It is expected that the successful cooperation of the transmission system operator with the first demand aggregator in the country will encourage other developers and providers of flexible services to enter the market.