The implementation of IoT solutions will enable a bottom-up approach to expanding the energy ecosystem. This approach will supply the necessary resources to meet the increasing flexibility reserves demanded by System Operators, in line with the new 2030 targets for wind and solar energy generation.
In the Portuguese pilot project, aggregator’s managing industrial facilities, commercial buildings, and energy communities—coordinated by the DSO at lower voltage levels—will showcase the added value of delivering System Services to the TSO.
Integrating renewable energy is essential to achieving net-zero targets and promoting sustainability. The TSO acts as the grid and market facilitator, fulfilling its public concession responsibilities as assigned by national authorities.
Research and innovation initiatives, such as the HEDGE-IoT project, play a key role in achieving these goals by establishing demonstration pilots to engage prosumers, including industrial facilities, commercial buildings, and energy communities connected at lower voltage levels. This bottom-up approach scales up flexibility to deliver System Services to the TSO.
Wind and solar energy can only guarantee approximately 30% and 20% of energy needs, respectively. Achieving net-zero goals requires installing three to five times more capacity compared to baseline generation sources like nuclear or fossil fuels. Since electric grids operate in real-time, it’s power and not energy that rules the game. Higher renewable energy capacity demands greater flexibility to balance generation and consumption, including cross-border trade within Europe. Insufficient consumer engagement at current levels results in negative market prices and renewable energy curtailments, which hinder progress toward net-zero goals.
The Portuguese pilot demonstrates the aggregator’s role at lower voltage levels, including the participation of the local DSO. The system services market products and tools developed by the Portuguese partners aim to showcase the potential of consumer-driven flexibility.
Aggregators are critical for the TSO, scaling from kilowatt-hour (kWh) levels to megawatt-hour (MWh) levels and taking on roles such as Balancing Service Provider (BSP) and Balance Responsible Party (BRP). However, current European markets require a minimum bid size of 1 MWh, which limits participation from smaller consumers.
Increasing system service products related to flexibility, particularly for down-regulation to address excess renewable generation, will reduce renewable energy curtailment.
HEDGE-IoT enables prosumers to achieve greater control over their electricity consumption, allowing their assets to participate in the system services market through the aggregator (BSP).
The Portuguese consortium, comprising strong R&D-focused companies, will develop innovative HEDGE market tools to maximize the operational value of assets within industrial facilities, commercial buildings, and energy communities.
Integrating renewable energy is a critical component for achieving the net-zero targets and fostering sustainability. Initiatives like the HEDGE-IoT project demonstrate the potential of a bottom-up approach by engaging pro-consumers, including industrial, commercial buildings, and energy communities, to contribute flexibility services to the transmission system operator (TSO). This approach addresses the challenges posed by intermittent renewable energy sources, like wind and solar, by promoting innovative solutions and tools that maximize flexibility and grid stability.
The pilot project in Portugal highlights the significance of aggregators in bridging small-scale energy producers with broader market opportunities. By enabling down-regulation and leveraging advanced tools, the project not only enhances the controllability of energy consumption but also demonstrates the economic and operational benefits of integrating distributed energy resources into the grid.
Ultimately, the collaboration of innovative R&D efforts in projects like HEDGE-IoT can serve as a blueprint for scalable, flexible, and sustainable energy solutions, driving the transition to a net-zero future.
