Introduction

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About the project

The main aim of the project is to provide a knowledge basis for Nordic government authorities’ and policy makers’ development of regulatory approaches that may facilitate and promote the adoption of efficient flexibility solutions, and thus, to inform national Nordic and European legislative activities. The overarching question is how the design of the regulatory framework can facilitate and promote efficient use of local demand-side flexibility from smart appliances, linked to ongoing national and European policy processes. To achieve this, the task is to map and characterize demand for and supply of demand-side flexibility (DSF), focusing on flexibility from smart appliances, and the experience with procurement solutions (contracts, market mechanisms) that are currently used, tested or developed in the Nordic market, and provide recommendations on regulatory approaches to the development of demand and supply, and market mechanisms.

The report is done as a collaboration between THEMA in Norway, COWI in Denmark, CIT Renergy in Sweden, and Motiva Services in Finland. Together, we have identified barriers and possible solutions through 10 case studies in Norway, Sweden, Denmark, and Finland.

About the report

The report is structured in three main parts:

1. Overview of current utilisation of flexibility in the Nordics

In Chapter 2, we present an overview of the current utilisation of flexibility. For each of the four countries, we present key information on why demand-side flexibility is needed, how flexibility is currently procured and give an overview of parameters affecting which solutions can be implemented, such as how many DSOs there are, the status of rollout of smart metering, whether a datahub is established and if they have access to HAN (Home Area Network). We also account for which countries have grid tariff structures based on capacity use or time of use, and whether conditional connections are being used.

Furthermore, we have mapped all flexibility initiatives by DSOs, and present key information on these. This includes the purpose of the flexibility initiative (technical demonstration, pilot, or commercially mature and permanent solutions), characteristics of flexibility procured, and procurement mechanism. Special focus has been put on flexibility from smart appliances. A database with contact information from these initiatives was delivered along with this report.

2. Presentation of 10 case studies

From the list of mapped flexibility initiatives, we have picked 10 of them to investigate and present as case studies. These were picked so that they together met several criteria. They should focus on flexibility from a range of smart appliances and have reached a certain level of maturity. Furthermore, they should have a certain variation across different needs from the DSO and have an even distribution between the countries. The chosen case studies are presented in Chapter 3 and consist of:

Byggfleks (Norway)
Battflex (Norway)
Norflex (Norway)
Sthlmflex (Sweden)
Effekthandel väst (Sweden)
E.ON Energidistribution’s flexibility markets (Sweden)
FUSE (Denmark)
EcoGrid (Denmark)
Helen and Fingrid’s marketplace (Finland)
Elenia’s smart meters (Finland)

Each case study includes a general case description, the value chain for demand-side flexibility, an estimation of overall flexibility potential from smart appliances included, and finally barriers and suggested enablers. Chapter 3 starts with an overview of the main lessons from each case study and a table summarising estimated overall flexibility potentials from the 10 case studies.

3. Barriers, existing relevant policy, and industry standards, and finally our policy recommendations

In Chapter 4, the barriers identified in the case studies are first summarised and presented. Secondly, the existing relevant policy and industry standards are presented and assessed. These include:

EcoDesign for Sustainable Products Regulation and Energy Labelling
Code of Conduct (voluntary industry standard)
Network Code on Demand Response
RED III art. 20 (a)
The Electricity Market Directive and the Electricity Market Regulation

Finally, we present our policy recommendations. These are based on the barriers and enablers identified in the case studies, a maturity assessment of demand-side flexibility, and the current regulations and industry standards.