The energy transition, a revolution, is shaping the electricity market at a frantic pace. The game's rules are changing, and new resources, marketplaces, services, and actors exist.
In the past, electricity producers anticipated electricity demand and price levels based on their solid experience and planned electricity production accordingly. This is changing and has already changed. The electricity supply from renewable sources varies regardless of demand, increasing price volatility in the electricity market. Price spikes tend to pass through the entire electricity supply chain over time, which is apt to encourage end users to plan their consumption. With more adaptively planned consumption, factories can significantly reduce the average price of purchased electricity already - and this development is getting stronger.
Participation in the balancing power and reserve markets has gradually increased. The opportunities for participation will improve as the methods of adjusting electricity consumption develop and become commonplace. Despite the opportunities created by the operating environment, enthusiasm for using the available technology has been weak. As an actor who designs and produces these services for the industry, we are amazed by this silence. Under the prevailing trend, we inquired about the reason for braking from a well-known artificial intelligence application and received the following answer:
The industry has been slow to participate in electricity marketplaces for several reasons:
- Lack of Awareness: Some energy-intensive companies may not know the benefits of participating in energy marketplaces or have the expertise to navigate complex energy markets.
- Cost and Complexity: Participating in energy marketplaces can require significant investments in technology, infrastructure, and personnel. For some companies, the costs and complexities of participation may outweigh the potential benefits.
- Regulatory and Policy Barriers: Some energy-intensive companies may face regulatory or policy barriers that limit their ability to participate in energy marketplaces. For example, some jurisdictions may restrict how much energy companies can sell back to the grid or may not allow certain types of energy generation or storage.
- Lack of Flexibility: Energy-intensive industries such as pulp and paper, mining, or steelmaking require a constant and stable energy supply. Some companies may be hesitant to participate in energy marketplaces due to concerns that fluctuations in the energy supply could disrupt their operations.
- Risk Aversion: The energy-intensive industry is typically risk-averse, with many companies preferring to rely on established business practices rather than taking risks in untested markets.
The answer we received didn’t entirely convince us. We believe that the points listed are mostly excuses and myths. We want to challenge all actors who recognize the topic as their own to a myth-busting event. Electricity marketplaces offer new revenue streams, improved energy management, and the ability to lower costs. By collaborating with service providers, participating in new marketplaces, and implementing new energy management strategies, the electricity-using industry can improve its success in a changing environment.
Benefit from the energy transition!