Load shedding: a winning partner for consumers and the grid

To limit the impact of global warming, countries have committed to drastically reduce their greenhouse gas emissions under the Paris Agreement. One of the levers is to replace fossil fuels with low-carbon energy, intensifying the electrification of various uses. To support this growth, we need to implement solutions that help maintain the balance of the grid at all times. One of these solutions is flexibility, and in particular load shedding. This solution enables aggregators and other parties involved in the system to reduce stress on the national grid, thereby contributing to its overall balance.

22 October 2024

Load shedding: what is it we’re talking about?

Also known as “consumption shedding”, load shedding consists of asking consumers (professional or private) to stop, modulate or substitute their electricity consumption to relieve the national grid on days of high stress (PP1 & PP2 days).

Occurring mostly in winter, these high grid stress days can lead to the activation of more carbon-intensive means of electricity generation, such as thermal power plants, capable of responding rapidly to consumer demand. If a major imbalance occurred on the network, this could result in rolling blackouts, prioritizing the supply of energy to certain geographical points to the detriment of others. To avoid this type of scenario, which would have an impact on the environment and create discontent among users, RTE (France’s Transmission System Operator) has made it a priority to reduce consumption rather than create new production facilities.

If RTE forecasts that electricity production will be insufficient to meet demand on a given day, it can signal to “large” energy consumers to modulate their electricity consumption: a solution that limits the impact of consumption peaks on the grid.

Beyond the environmental commitment that benefits the image of these electricity consumers, it’s also a financial opportunity. By agreeing to participate and to switch off on days of high grid stress at RTE’s request, industrial and commercial customers can diversify their income by obtaining, in return, an annual remuneration (in €/MW) and an activation premium (in €/Mwh) for each switching-off operation carried out.

For these “consumer” customers, load shedding makes it possible to:

  • reduce their electricity bills,
  • diversify their income by finding new sources of remuneration,
  •  take part in the energy transition by relieving the power grid when needed.

For the power grid, these consumption flexibilities make it possible to:

  • reduce consumption rather than increase generation capacity,
  • reduce CO2 emissions through load shedding by limiting the use of peak production resources, which are generally more polluting.

 

The aggregator’s role in load shedding

When it comes to load shedding, the aggregator, also known as the “load shedding operator”, acts as an intermediary between the consumer and the transmission system operator. It supports consumers throughout their commitment to balancing the power grid.

At the heart of the electricity markets, it provides the consumer-customer with expertise in flexibility mechanisms, and provides administrative (contractualization) and technical support (facilitating tools) to optimize the value of load shedding on the energy markets and obtain remuneration. It then interacts with the marketplaces on behalf of the customer, providing the solutions and tools needed to implement the customer’ss load shedding.

After assessing the customer’s load shedding potential by taking into account the electrical power, advance notice requirements and duration involved, the aggregator draws up a load shedding contract that secures the customer’s remuneration while minimizing operational and financial risks. Each contract is tailored to the customer’s specific needs and constraints, whether operational, organizational, or linked to industrial processes. Finally, the load shedding operator activates the customer’s load shedding operations via a virtual power plant and valorizes their potential on the electricity markets.