Energy cooperatives have important role in flexibility delivery

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Energy cooperatives need to develop new understanding and sets of know-how to participate in flexibility markets, a new report says.

The report from the Belgium-based European federation of citizen energy cooperatives, REScoop.eu, highlights the importance of flexibility in a renewables-based grid. It says that cooperatives and citizen energy communities may have an important role to play due to their ability to mobilise citizens beyond the commercial offers.

Two cases are presented of energy cooperatives that have engaged in flexibility services. However, both indicate that participation in ancillary service opportunities is likely to be more of a long term than short term prospect.

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Som Energia, Spain’s largest energy cooperative based in Catalunya with 65,000 members, is using demand side flexibility to maximise self-consumption and to offer reduced retail electricity by maximising local energy use at peak generation times and purchases on the wholesale market at times of cheapest electricity.

In the short term the goal is on maximising this local and self-generation consumption and participation in balancing opportunities is likely to be in the longer term.

“The key opportunity [that demand-side flexibility services represents] is for Som Energia to become less dependent from external producers, but also to increase the resilience of the cooperative itself and of its members,” the coop’s head of electricity market, Eduard Quintana says in the report.

“Aggregation technologies lack standards and are not broadly accessible yet. Moreover, Som Energia has to invent a business model with the cooperative values at its core.”

Energie Samen, the national federation of Dutch energy cooperatives representing over 600 initiatives, is supporting local coops Endona, Escozon and Energie Van Ons with flexibility. Together they are aggregating loads as resources to use on the balancing reserves of the transmission system operators.

Energie Samen Director Siward Zomer notes the key challenge to offering flexibility is getting capital for the investments that are required to build up the services.

“It is not clear when the markets of flexibility will be viable to ensure profitable business models,” he says. “Especially as cooperatives that now work mostly on developing their regular businesses round renewable energy production and energy savings, innovative flexibility services still seems far away and not a priority for them to invest in at the moment.”

The report says that the various flexibility models will become key in the coming years for cooperatives, as well as any other electricity market actor. They will require cooperatives to develop new sets of know-how and technologies, which could be a challenge for grassroot organisations.

However, direct involvement with their members also provides them with a key asset and puts them into a unique position to further explore these new business models.

REScoop-eu counts a membership of over 1,500 cooperatives with an approximately 1 million citizen ownership. The total number of such coops in Europe, or energy communities as they are often called, does not appear to be known but certainly numbers many hundreds more.