Renewable energy sources are making it increasingly difficult to match supply and demand, argues Cristian Stet, PhD student at Erasmus School of Economics. If the energy market does not become more flexible, the electricity grid risks becoming saturated and the revenue model of green electricity may be lost.
In his dissertation, Stet mentions two ways to make the electricity markets more flexible: storing electricity in case of peaks in production, and changing our 'demand response'. The first can be done, for example, through batteries or by converting electricity into hydrogen. With the second, Stet means letting the demand for electricity follow the supply. For example, consider an office building that has energy-hungry cooling systems and could save costs by running the system at times when demand and price are lower.
The lower electricity prices are, the better the prospects for flexibility providers. For example, there could be electricity contracts that allow for real-time tracking of the market price. This could in fact be very interesting for large users. Understanding how weather-dependent renewables can change electricity markets can build a business case for flexibility providers.