How renewables are changing the German balancing energy market

From the traditional approach to new flexibility

The German balancing energy market is still strongly shaped by conventional plants today, above all hydropower. However, further expansion of this technology is limited. At the same time, the energy transition and the associated expansion of wind and solar energy are increasing the need for additional flexibility. In Germany, this is particularly noticeable, as the country has the largest installed wind and PV capacity in Europe. The resulting weather-related fluctuations in electricity generation accordingly reach high power levels and increase the requirements for short-term balancing of generation and consumption in order to stabilise the electricity grid. To meet this growing need for flexibility, new technologies are increasingly being used.

Balancing energy and flexibility explained simply

Flexibility refers to the ability to bring electricity generation and consumption into balance at short notice and thereby ensure grid stability. For this purpose, positive or negative balancing energy is used as required.

Positive balancing energy is needed when more electricity is consumed than is produced. The grid is then stabilised either by additional electricity generation or by a targeted reduction in consumption. A classic example is flexible gas-fired power plants, which can increase their output at short notice and provide additional energy.

Negative balancing energy is used when more electricity is produced than is consumed. In this case, either feed-in is reduced or electricity consumption is increased. Examples of this are hydropower plants that reduce their output, or heat pumps whose electricity consumption is deliberately increased.

Pumped-storage power plants and batteries are examples of facilities that can flexibly provide positive or negative balancing energy as required.

Large-scale battery storage systems are ideal for providing balancing energy. — Large-scale battery storage systems are ideally suited for providing balancing energy.

Flexibility across different markets and technologies

The growing need for flexibility is changing the composition of providers in the balancing energy market. This is particularly evident in the growing importance of battery storage systems. Thanks to their high flexibility and their ability to respond to fluctuations in the electricity system within seconds, they are ideally suited to providing balancing energy. Accordingly, the expansion of battery storage capacity in Germany is progressing at a highly dynamic pace. Several gigawatts of additional capacity are currently being planned. One of these large-scale batteries in Germany is being built by BKW.

Consumption technologies are also increasingly providing flexibility for the electricity system. Power-to-heat plants and the associated heat pumps can provide both positive and negative balancing energy. Since many of these plants run for more than 5,000 hours a year in baseload operation, they can reduce their power consumption in the event of a short-term electricity shortage. At the same time, negative balancing energy is available by increasing power consumption. A particular advantage lies in the thermal storage capacity of buildings. As a result, the heat generated is retained for a certain period of time, allowing heat pumps to adjust their power consumption at short notice without this immediately leading to a loss of comfort.

While new renewable technologies such as wind and PV systems long served primarily to generate and market electricity, they are now also opening up additional applications in the balancing energy market. In the event of an electricity surplus, these systems can be curtailed and thus provide negative balancing energy. This creates new revenue streams while also increasing the flexibility of the electricity system.

Südvolt: Established provider of balancing energy

With Südvolt, BKW in Germany has a flexibility portfolio of almost 2 GW connected to the German balancing energy market, comprising various flexibilities such as combined heat and power plants, emergency power units and steam turbines. To optimise the participation of this plant portfolio in the balancing energy market, Südvolt pools decentralised flexibilities in a virtual power plant. Over recent years, Südvolt has continuously developed its portfolio and has increasingly also included power-to-heat plants. The next steps have already been initiated: batteries and renewable energies such as wind and PV plants are currently being integrated into Südvolt’s balancing energy marketing, thereby making a growing contribution to flexibility in the electricity system.

Structural change in the energy system and in the balancing energy market

The balancing energy market is undergoing fundamental change. In future, renewable energies, battery storage systems and flexible consumers will play a central role in providing flexibility. At the same time, the increasing need for flexibility will not be fully met by these technologies. Flexible gas-fired power plants will therefore remain an important component of a stable energy system in the medium term.

Together with the expansion of battery storage systems and other flexibility solutions, this is creating a technology mix that ensures security of supply and specifically supports the integration of renewable energies. With Südvolt, BKW is making an important contribution to this development and underscoring its role as an active shaper of the energy transition for a sustainable future.

New renewable energies as an important mainstay of BKW in Germany

In Germany, BKW has a portfolio of around 6,000 MW of wind and solar energy from third-party installations. With this portfolio, it is the sixth-largest direct marketer of renewable energies in Germany.

In addition, BKW also operates its own wind farms. The smallest installation is located in Landkern and has a capacity of 4 MW, while Dubener Platte, with 20 wind turbines and a total capacity of 20 MW, is the largest wind farm in the portfolio. Furthermore, BKW is driving forward the further development of its wind farms in order to use them in future not only for electricity generation, but increasingly also to provide flexibility in the balancing energy market.

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