Why is energy dispatching such an important function?
Energy dispatching involves maintaining a balance between energy supply and demand, to avoid any disruption to the service provided to customers. At the same time, it is essential to avoid any physical saturation of the networks.
As Eloise Lewandowski, short-term gas trader at ENGIE GEMS in Paris, explains “Gas outflows must match inflows to prevent pipeline pressure from exceeding safe limits. In such cases, our flows could be interrupted, and we would have to buy or sell elsewhere to compensate…”
The same applies to power grids, except that instead of pressure, we are dealing with voltage and frequency. The latter must be balanced at around 50 hertz (when there is an excess of production over consumption, the network frequency increases; conversely, when there is a shortfall in production, the frequency drops). Stable frequency is essential for the smooth operation of industrial facilities and household appliances.
In the event of an unexpected network event, it is up to the dispatchers to react immediately to find the best solution for mobilizing the energy reserves available at the time. The measures taken must be the most appropriate, both technically and financially.
Dispatchers operate on a very short-term basis, as close to real-time as possible, 24/7. As Eloise points out: “We’re at the end of the chain, insofar as for dispatching purposes, we work from the day before to the day after, or intraday, i.e. from hour to hour. But we must honor long-term or very long-term contracts. Let’s take an extreme example. We are managing a contract that has been in operation since 1986″. As far as electricity is concerned, Wouter Van Melkebeek, head of dispatching at ENGIE GEMS in Brussels explains that “In broad terms, it’s similar, except that we get 4 seconds for steering”.
What do dispatchers do day to day?
- Forecasting – For both gas and electricity, dispatching relies on statistical forecasts of consumption and production based on historical consumption data, industrial planning schedules, weather forecasts, production capacity, and availability data.
- Planning and reporting – In the interests of market transparency, planned production for the following day must be reported on dedicated websites.
- Monitoring and balancing supply and demand in real-time – Dispatchers use a wide range of digital tools to continuously monitor flows and detect any deviation from forecasts.
- Dealing with the unexpected – In the event of a discrepancy between planned and actual performance, dispatchers must mobilize various “flexible” resources to adjust flows. In the case of gas, it is possible to draw on reserves, divert gas from a surplus to a deficit region, or buy gas directly on international markets. In the case of electricity, « we currently operate large pump turbine assets which can react very quickly for very large capacities but the deviations amplitude is increasing due to the renewables capacity increase requiring more fast flexible power (batteries) » explains Wouter Van Melkebeek.
- Optimizing – Optimization aims to reduce costs or even generate extra margins through flexibility while complying with technical and regulatory constraints. Optimization also involves managing environmental constraints to limit emissions. Dispatchers need to make appropriate technology choices that benefit from emissions markets that provide financial initiatives to promote clean technologies.
- Continuous process improvement – Feedback and the systematic analysis of discrepancies between planned and actual performance help drive a continuous improvement in forecasting models.
The specifics of gas dispatch
Western Europe depends heavily on gas supplies, with market prices fluctuating due to geopolitical events. However, gas storage capacities help to smooth occasional volatility. As Eloise Lewandowski explains, dispatchers can use different levers:
“As an intraday trader, I tend to buy/sell on the markets. When possible, I can also draw from gas reserves. At night, when the markets are less liquid, it can be difficult to generate a margin. However, balancing is the main priority and must be achieved by the end of the gas day.”
The specifics of electricity dispatch
While Europe’s electricity production is substantial, there is very limited storage capacity for this energy. Consumption, however, varies constantly over the course of a day, depending on economic activity, working hours, length of day and night, temperature, etc.
Moreover, the growing importance of intermittent and partly steerable renewable energies (wind, solar, or run-of-river hydroelectricity) increases the variability of production capacity. For example, abundant renewable production on a sunny summer’s day, with sufficient wind, can cause prices to plummet at a time when energy demand is very low. As Wouter Van Melkebeek explains:
“We now live in a world full of uncertainties, on both the production and consumption side. To solve this potential imbalance, we are highly dependent on the upstream work performed by our colleagues, i.e., everything to do with forecasting, hedging, risk policies, and so on. Our main activity is achieving a balance within the perimeter for which we are responsible within each of the grids and countries in which ENGIE is active. Things can happen in a matter of seconds. We’re working at a much faster pace than ever before.”
For Engie GEMS dispatchers, maintaining network frequency is a priority, because it means ensuring the long-term viability of the infrastructure, and guaranteeing the best possible service for end customers, whatever the technical or meteorological contingencies. Their vigilance also makes it possible to minimize costs by giving priority to the most economical energy sources available. Finally, by focusing on balancing renewable energies, Engie GEMS dispatchers play a vital role in achieving the ENGIE ‘s objectives for positive energy transition.