Flex-E | How to develop the DSR potential in Poland and reduce the costs of the energy system

Report

The Polish energy sector is entering a new phase of transformation. Planned integration of industry into the the support for energy security offers a chance to reduce by at least 1200 MW peak demand for electricity in Poland during periods of critical load od Polish Power System. this is what results from the analysis of the national potential of DSR services prepared by Forum Energii.

The biggest challenge of the Polish energy system is to improve flexibility, so it better responds to fluctuations in energy demand in the situations of increasing share of variable generation sources and different kinds of network problems. Efficient mechanism of planned energy demand reduction helps to avoid the same situation as in August 2015, when some enterprises had to reduce their energy consumption - said Joanna Maćkowiak-Pandera, president of Forum Energii.

The DSR mechanism that has recently been proposed by PSE is a modern, well-designed tool. There is now need for consistency and optimisation. Our analyses show that the technical potential of DSR in Poland is high, but these are the costs that can limit its use. DSR should not be more than cost for consumers of undelivered energy, i.e. the so-called VOLL (Value of Lost Load).

DSR (Demand Side Response) means reduction of electricity consumption by consumers (e.g. entrepreneurs) when the security margin in the Polish Power System is decreasing. Entrepreneurs may receive payments from the energy system operator for their willingness to decrease their demand. In order to ensure that the cost of this mechanism does not overburden consumers and is effective, it is necessary to apply financial penalties for failure to implement the reduction within a specified period of time and the amount ordered by the operator. 

Reducing the costs of the energy system

By developing the DSR services, Poland can avoid building at least one large  power unit. - says Edith Bayer, co-author of the report from the Regulatory Assistance Project. The DSR potential in our country, which can be mobilised in the situation of energy system overload, can be estimated at least 1200 MW, i.e. 5% of the peak demand. The construction of a new unit providing such power costs taxpayers PLN 6 billion - adds Jan Rączka, co-author of the RAP report. Compliance with European energy regulations. The developing DSR mechanism in Poland is in line with the intention of the European Commission included in the Winter Package. The Polish DSR has a chance to become one of the better instruments for supporting flexibility in Europe. As a country, we are not only gaining higher reliability of the energy system, we are also developing an area in which we can be a model for others. - explains Edith Bayer.

Flexibility of the energy system

The DSR is one of the mechanisms for increasing the flexibility of the energy system, i.e. regulating the amount of power available on the market depending on demand. The coal-fired power units, on which the domestic power industry is based, without large investments, have very limited possibilities of changing the generated capacity. On the other hand, the capacity of renewable energy, whose share is growing in the Polish mix, is characterised by high variability. 

Full text of the report is available only in Polish.

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