Recent developments in the European energy system show a significant decrease in coal- and gas-based power generation and a concomitant increase in renewable energy sources. However, wind and solar power production exhibit natural fluctuations of volumes which need to be compensated for to ensure secure and balanced grid operations. This can be achieved by adding flexibility to the energy system based on power storage, investments into power grid and flexible consumption. This flexibility needs to be managed in real time to ensure grid balancing and effective use of resources. There are multiple approaches to ensure sufficient flexibility and the solution likely lies in a combination of those. Among the most innovative are strategies related to energy storage, leveraging demand flexibility, and producing green hydrogen during periods of excess wind and solar power. Aggregating flexibilities from production, demand, and available power storage within a particular grid and trading this flexibility is the most straightforward way to accommodate fluctuations in renewable energy systems. This aggregated flexibility needs to be centrally controlled to be traded. In this case it forms a virtual power plant (VPP). Aggregated flexibility of both production and consumption can be utilized in markets such as ancillary services or wholesale… continue reading