Demand-Side Management

Demand-side management means transferring electricity consumption from hours of high load and price to a more affordably priced time, or temporarily adjusting consumption for the purpose of power balance management. More demand-side management is needed as the amount of inflexible production, such as nuclear power and renewable energy, in the grid increases. Inflexible production sets challenges on the current market model, where only energy is traded. Increasing demand-side management is one method of securing the survival of the current market model also in the future.

In Finland, loads from large-scale industry have, for a long time, acted as reserves used for maintaining the power balance; however, these loads are mainly focused on industry such as forestry and the metal and chemical industries. Demand-side management is a natural opportunity to increase supply on both regulating power and reserve markets.

A novel idea on the electricity market is also so-called aggregators, i.e. companies that combine small-scale consumption and production to a larger entity, which can participate in different markets. The small-scale production of a consumer can be considered similar to demand-side management, if it reacts to the market situation and decreases the amount of electricity the party takes from the grid; these include the back-up power generators of buildings and commercial premises.

Participating in demand-side management (or demand-side response, DSR) can, at first, require investments from companies, but in the long term, it can offer a cost-efficient solution for both the company and the national economy.

The amount of demand-side management on the Finnish market:

Demand-side management
Demand-side management
Demand-side management
Close
Market places

At the moment, demand-side management can only participate in eight different market places. Participation in reserves, for example, can mean only a few seconds' reduction in the power taken from the grid, or an hour's outage once in ten years. Or no outage at all, if power can be flexibly adjusted!

The activation numbers, reimbursement levels and technical requirements vary between different market places. The table below shows the suggestive reimbursement levels and technical requirements' main points. More information on the reserve and regulating power markets can be found here.
 
Operating on the day ahead market and intraday market requires an agreement with power exchange, as well as an agreement with an open electricity provider, which also covers balance responsibility. Further information: http://www.nordpoolspot.com/

 

​Market place​ Type of contract Minimum
bid size​
Market gate closure (EET) Activation time How often activated Price level
2018 *)
Frequency controlled normal operation reserve
Yearly and hourly markets
0,1 MW​
Yearly market previous autumn, hourly market day before at 18:30
3 min​utes
Several times a day
14 €/MW,h (yearly market) 
Frequency controlled disturbance reserve​ (FCR-D)
Yearly and hourly markets
1 MW​
Yearly market previous autumn, hourly market day before at 18:30
Linearly of partly linearly within 5 s / 50 % and 30 s / 100 %, when f under 49,9 Hz OR single step activation 5 s when f under 49,7 Hz / 3 s when f under 49,6 Hz / 1 s when f under 49,5 Hz  Several times per day - per year
2,8 
€/MW,h (yearly market)
aFRR
Hourly market
5 MW​
Day before at 17:00
Must begin within 30 s of the signal's reception, must be fully activated in 2 minutes 
Several times a day
Hourly market price + balancing energy price
Balancing power market (mFRR)
Hourly market
5 MW​
45 min before each hour
15 min​utes
According to the bids, several times per day - per year
Market price
Balancing capacity market (mFRR)​
Weekly auctions
5 MW​
Week before on Tuesday at 12:00
15 min​utes
​According to the bids, several times per day - per year
~3
€/MW,h
Day ahead market
**)
Hourly market
0,1 MW​
Day before at 13:00
-
-​
Market price
Intraday market
**)
Hourly market
0,1 MW​
30 min before each hour -
-​
Market price​
Strategic reserves
***)
Long-term contract
10 MW​
 ***)
15 min​utes for DSR, 12 h for power plants
Rarely
-​
 

*) The price levels are suggestive; more detailed terms and pricing principles can be found in agreements relating to each market place and realized market prices can be found here.
**) Nord Pool markets
***) The Energy Authority makes the procurement every 2-3 years

 

 

 

Details

Jonne Jäppinen

Development Manager
tel. +358 30 395 4225

Laura Ihamäki

Specialist 
tel. +358 30 395 5166

Mikko Kuivaniemi

Specialist
tel. +358 30 395 5188

Pia Ruokolainen

Specialist
tel. +358 30 395 5105

See also