Given the peak imbalance prices on several grids these past weeks, we’re making the case for power producers that becoming a BSP may be a great step to profit. Why not put your ‘sleeping’ capacity to use, and get paid handsomely for it?
It was the day after Saint-Nicolas’ visit..
Monday the 7th of December 2020 – Belgium, it’s a cold day, there’s almost no wind and the sun hides behind a thick blanket of grey clouds. This phenomenon is known as ‘dunkelflaute’ in German or ‘donkerluwte’ in Dutch. It’s an adverse scenario for power production from renewable sources – especially during the winter months when temperatures drop.
These factors created a perfect storm on the Belgian power grid and imbalance prices rose significantly, staying above €385, most of the time between 07:45 and 18:00 hours. The peak came at 12:30, with prices reaching €2291/MWh.
The Flexibility Market – how to participate?
The opening up of access to the flexibility markets by Elia, the Belgian power TSO, means that owners of smaller production units can also participate, and get a return on their production assets.
Elia contacts the BSPs that participate and they in turn need to fully activate their ‘promised capacity’ within 15 minutes to help Elia maintain balance on the grid.
For more details we kindly refer to our blog from June: https://www.egssis.com/flexible-power-balancing-on-elia-grid/
The business case for becoming a BSP
Balancing Service Providers (BSPs) with ‘spare capacity’ can be rewarded handsomely if they participated on the flexibility markets during days with high auction prices. A BSP is an entity that offer the flexibility of a unit or load in the reserve market to parties that request flexibility services, the TSOs or DSO. Often the flexibility of several distributed units is aggregated by one BSP, which is then called an aggregator.
If you have ‘sleeping capacity’, then it is quite straightforward to calculate your business case of becoming a BSP. Take a look at the average auction prices for the past year(s), analyse the trends. If you have determined your cost of production, you can then do the calculation to see at what point you should participate in the flexibility markets. Last but not least you should strengthen your prediction models with forecasting. A good (auction) price forecasting model can only help you.
You can see an example below of the auction prices on that infamous Monday (07/12/2020). Some interesting columns are Bids+ = price paid for non-reserved upward balancing capacity and R3 Std = Activated pre-contracted Standard upward tertiary reserve capacity:
So you’ve made your business case and want to take the next steps? Then we kindly refer you to Elia’s website section on ‘how to become a BSP’.
EgssPort Power as your ‘operations hub’
Obviously, you will need a trusted service provider and that’s where EGSSIS comes in with a range of innovative IT solutions and services to support placing bids and accepting activations sent by the TSO. Our platform integrates seamlessly with your forecasting, back-office, and other key platforms such as STAR/BMAP/Probid.
We’re constantly adding new options to facilitate access to the flexibility markets via EgssPort Power. Together with one of our clients we’ve been in close contact with Elia to make this happen, via API between EgssPort and the STAR, BMAP and Probid platforms. We will share more in a detailed blog the coming months. Don’t hesitate to get in touch if you want to see the BSP functionality in action!
To summarize, you can count on EGSSIS to help you optimize your energy portfolios and maximize profit. Obviously, this is only the beginning, as several TSOs are exploring ways to opening up their flexibility markets. We will be ready to help you with innovative solutions to make the best use of these opportunities. During the coming weeks we will share an in-depth walkthrough of the BSP functionality we have implemented for the Belgian power grid.