21 January 2018
IndustRE: Can the industrial sector enable the grid integration of renewables

 

By Denzil Walton and Michael Papapetrou

Winter 2017


The IndustRE project aims to use the flexibility potential in energy-intensive industries to facilitate further grid integration of variable renewable energy sources.

For many years, the way European industries have consumed energy has been shaped by the traditional working day. This old, rigid model does not take into account when renewable energy is generated and how this affects the market prices. But if industry was to become more flexible about when it consumes electricity, it could adapt to wind and solar generation patterns and benefit from lower market prices.

With this in mind, the IndustRE project has been exploring how the flexibility potential of energy-intensive industries across Europe could help them save money, while supporting the efficient integration of more variable renewable energy into the European power system.

PROJECT SCOPE, ACTIVITIES AND TIMEFRAME
The project activities are relevant for all industries in Europe, especially the chemicals, non-ferrous metals, cold storage, steel, and water treatment sectors. These five sectors with 302 TWh/year represent about 10% of the electricity consumption in Europe.

The project work is applicable to all European countries, with particular attention being given to Belgium, France, Germany, Italy, Spain and the UK. These countries have traditionally had important industrial production and together they represent more than 65% of the EU population and almost 80% of all the installed wind and PV capacity. These figures allow a balance to be achieved between a manageable effort of working with six target countries and still having an important impact on a European level.

The project has two aims within two timeframes. The first is to offer practical tools for immediate impact, and the second is to quantify the longer term potential following the implementation of policy recommendations. Five case studies have also been analysed, covering five countries and four industry sectors.

NEW BUSINESS MODELS
Over the last three years, the IndustRE team has developed a range of new business models which:

  • Create win-win situations for the involved parties
  • Support the further deployment of variable renewable energy without dependence on support schemes
  • Bring benefits for the power system and the environment
  • Can be applied in the current market and regulatory framework of the target countries

 

WHAT BENEFITS ARE POSSIBLE?
Energy intensive industries can make important savings by becoming more flexible in the way they use their electricity, leading to a 3% to 10% reduction in their electricity bill.

Advanced modelling shows that flexible industrial demand could deliver significant savings for the European power system. If 20% of industrial electricity demand was flexible, up to 2.5 billion euros per year could be saved in an EU power system with 60% renewables.

KEY POLICY RECOMMENDATIONS
Naturally, changes need to be made to the market design and policy framework to deliver all the benefits industrial flexibility has to offer. There is still a lot of work to do in every single country to bring all the benefits possible from flexible industrial demand, especially as current market and regulatory arrangements do not capture this complexity sufficiently. Key policy recommendations include:

  • Giving large consumers access to wholesale electricity markets
  • Opening up reserve capacity and balancing markets to demand
  • Ensuring that variable renewable energy generators bear imbalance responsibility
  • Harmonizing flexibility mechanisms across the EU
  • Abandoning net-metering policies and allowing self-consumption on-site.

 

HOW CAN YOUR COMPANY BENEFIT?
Even in the current framework, industrial electricity users can save on their electricity bills by using the IndustRE methodology and results. A new tool has been developed – ProFlex – which can quantify how much flexibility they have does an industrial user have and what is that worth. All IndustRE results are available to download on the website www.industRE.eu, where you can also find out how the project can benefit your company.