Until recently, it was the large-scale power stations that provided the grid with the required amount of reactive power.
But now it is time for renewables to ramp up their contribution to grid stability. Berlin-based start-up company Blindleister is turning this into a business model for solar and wind power producers.
Reactive power is generated when transporting active power and is an unavoidable phenomenon in an alternating current network. In physical terms, reactive power means that the sine wave curves of voltage and current are out-of-phase in relation to one another. In the case of capacitive reactive currents, the current leads the voltage, while the reverse is true in the case of inductive reactive currents. In contrast to active power, reactive power is not useable. It cannot perform any work and oscillates only between power source and load. This means it blocks grid capacity, allowing less active power to be transported.
To use transmission capacity as efficiently and effectively as possible, a grid requires multiple reactive power sources. Reactive power generated in the grid itself and by consumers is offset by opposing reactive power, meaning grid operators can regulate the voltage in individual sections of the network. The power outage in Spain and Portugal at the end of April showed just how disastrous it can be when overvoltage in the grid is insufficiently regulated, thereby triggering a series of protective shut-downs.
Gaps in reactive power on the rise
However, the supply of reactive power is shrinking as fossil fuel power plants are being shut down as part of the energy transition. For Germany, the electricity grid development plan (NEP) forecasts a growing deficit by 2037. “Without the potential derived from the grid-serving use of electrolyzers, large-scale battery storage systems and renewable energy systems from the distribution system, the reactive power deficit is rising to 65 Gvar,” according to the NEP. Gvar stands for “gigavolt-ampere reactive”, the unit of measurement for reactive power. 65 Gvar corresponds roughly to the amount of reactive power supplied by 80 coal-fired power plants.
The four German transmission system operators and a handful of distribution system operators (only those that have a 110-kV grid) have now tendered out the supply of reactive power for the first time, or they are in the process of doing so. This means Germany is entering a market that a few other countries are already familiar with. The UK, Switzerland and the Netherlands already have experience with market-based procurement of reactive power.
From by-product to revenue stream
This is where Berlin-based start-up Blindleister, founded this year, comes into play. As a service provider, the company connects electricity producers using renewable sources of energy to the newly emerging market. “By pooling different energy sources in one local grid area, we are creating reactive power PPAs for grid operators,” explains the company. The complexity of the situation makes it very difficult for operators of individual solar and wind farms to become active in this market without assistance.
Electricity producers or storage systems that feed into the 110-kV grid or at higher voltage levels can profit from this. For commercial reasons, farms should have an output of at least ten megawatts, says Stefan Häselbarth, one of the Managing Directors of Blindleister.
Keeping track of a complex market
In addition, suitability depends greatly on the individual project. As a first step, the start-up determines the individual potential of its customers. The challenge is to understand a power plant’s real-time behavior, as the provision of reactive power must not interfere with active power generation. The commercial analysis must also take into account that achievable prices for reactive power vary widely in different grid areas. This is due to both the respective regional generation and consumption structure and the pricing policies of individual grid operators. The market is still not transparent, which is why the Blindleister team hopes for more regulations in favor of greater market transparency.
“There tends to be a greater demand for reactive power in rural regions than in cities, and it is especially needed in areas where there is a lot of electricity from renewable sources in the grid,” explains Häselbarth. This is why transmission system operators do not view their networks in a uniform way, but rather tender out reactive power separately by grid section. Amprion, for example, has defined nine procurement regions, which are designated based on grid topology.
What should be considered during the tender process?
Whether or not a plant is suitable as a reactive power source also depends on the technology used to generate power. “Depending on generator type, wind farms can often supply capacitive rather than inductive reactive power in the lower output range,” according to Blindleister’s experience. Solar farms can usually provide both very well. However, not all grid operators tender both reactive power variants equally; some only need capacitive reactive power, while others require inductive.
The tender process also differentiates between secured and unsecured reactive power. In the case of secured provision, the supplier must ensure the power is continuously available at the contractually agreed amount. In return, the grid operator pays them an availability price, or base rate. Actual reactive power drawn is then paid for on top of this, at a commodity price.
In the case of unsecured provision, reactive power does not have to be continuously available. Charges therefore only apply when power is actually accessed, at the agreed reactive power commodity price. The terms of the tendered contracts can last anywhere between one and several years.
Solar and wind farm operators must also decide whether they want to supply reactive power when plants are not currently generating electricity. This is possible, because the plants also rely on grid-supplied electricity and can use their power electronics to generate reactive power. Whether or not this is commercially viable depends greatly on the project’s individual framework conditions. Co-location storage systems can, for example, improve their profitability. Last but not least, the length of the power line to the transformer station also plays a part.
These countless influencing factors mean that revenue options vary greatly from project to project. “For some projects, suppling reactive power simply is not worth it, while for others it can generate five to ten percent in additional revenue,” says Häselbarth.
How is a plant connected?
Plant operators do not generally need to retrofit any hardware. Sometimes they only need to enable the reactive power supply in the frequency changer; in terms of hardware, the power electronics are usually capable of this. They also need to create a connection to the transformer station’s telecontrol technology, which requires initial investment.
Blindleister then develops a digital twin for the relevant power plant, which local grid operators can access at any time via the cloud. The twin signals how much reactive power the plant in question can provide in real time.
The start-up is thereby connecting plant operators to a market that is only just emerging. These new possibilities are also an attractive proposition for the system as a whole. “We are stabilizing grid voltage, reducing voltage-related redispatch measures and helping to lower costly investments in grid components,” explains Häselbarth.
