At the webinar, Serhii Kravchuk talked about new opportunities from participation in the aggregated group

At the webinar, Serhii Kravchuk, Director of Electricity Trading and Supply in KNESS, spoke about new opportunities for consumers (including active ones), electricity producers and ESS operators as a result of participation in the aggregated group.  The online discussion on the prospects for aggregation activities in the electricity market was initiated by the UN Global Compact in Ukraine together with ExPro as part of the Ukraine Energy Initiative.

Sharing the highlights from Serhii Kravchuk’s speech:

KNESS experts have been researching the topic of aggregation since 2021-2022 by analyzing European experience and contributing to the development of the policy and regulatory framework development together with other market participants. In July 2023, the aggregation mechanism was implemented into Ukrainian legislation (Law of Ukraine No. 3220-IX).

The aggregation mechanism is aimed at attracting a distributed resource to balance the power system. In other words, it is about combining low-power electrical installations and consumers into a single aggregated group in order to simplify management and dispatching by the transmission system operator. Additionally, this business model opens up opportunities for the members of the aggregated group to enter more marginal market segments and, accordingly, generate additional revenue.

What value can an aggregator provide to the members of its aggregated group? It depends on the type of facility. 

For example, consumers, i.e. industrial enterprises that can change their consumption schedule depending on the need, can be involved in the balancing market. As a result, such consumers will be able to buy electricity within the balancing market at a much lower price than in the retail market. 

Another category of consumers is active consumers, enterprises that have installed energy storage facilities, and as part of an aggregated group, they can provide themselves with additional liquidity from such facilities. After all, the aggregator can use such installations to provide ancillary services or balancing services.  Also, for active consumers, i.e. companies that have an energy storage facility or a power plant, or a combination, working as part of an aggregated group helps to avoid additional costs for providing organizational support for working in different market segments.

Charging stations for electric vehicles are a separate category for entering the aggregate group.

For example, in the European Union, the vehicle-to-grid service is quite common, which involves the use of charging stations as an additional resource in the electricity market. Thanks to the aggregation mechanism, such practices will now be available in Ukraine.

For electricity producers that have been established over the past few years, participation in an aggregated group can provide a more comfortable entry into the electricity market and simplify the fulfillment of their responsibilities in the balancing or ancillary services market. 

For representatives of various types of generation: gas turbine, gas piston, biogas, wind and solar power plants, including those with energy storage facilities, the aggregator opens up the possibility to plan their operating modes and operate in those segments of the electricity market where it is most profitable. 

By joining an aggregated group, operators of energy storage facilities can operate in basically all market segments. At the same time, the aggregator will allow them to provide services more efficiently and ensure maximum liquidity from their power plants.

The aggregator has a value component not only for the members of the aggregated group, but also for the system operator. Since the aggregator assumes responsibility for the execution of dispatch commands of the transmission system operator, and the latter uses the aggregator as a “single window”, which makes it possible to attract a large volume of distributed resources located on the consumer side.