The power grid is under strain, and long wait times for connections are slowing electrification and industrial growth in Norway. By harnessing industrial flexibility more effectively, we can free up grid capacity, connect businesses faster, shift electricity use to cheaper hours, and at the same time support decarbonisation and value creation. On top of that, this approach also reduces the need for new grid expansion, helping to protect nature.
For industry to play an effective role in flexibility, we need technological advancements, new business models, and financial mechanisms that make flexibility profitable. At SINTEF Energy Research, we are actively working to find solutions to make this a reality. We now want to connect with industry players, grid operators, and authorities who are interested in shaping the flexible energy system of the future.
Interested? Keep reading and join the discussion!
How industry can ease grid congestion and lower electricity costs
The power grid is under pressure from a combination of rising electricity consumption and increasing variable renewable power generation. Electricity prices now fluctuate significantly over short periods, a trend that many analyses suggest will continue. This means some periods may see sustained high prices, while others will have equally low prices.
To ensure the competitiveness of a zero-emission Norwegian industrial sector, access to affordable renewable power is crucial. Electrification is the key to reducing industrial emissions, and low, stable electricity prices play a vital role. However, none of this is possible without reliable grid access.
When long grid connection wait times force industrial players to put electrification plans on hold or relocate to other countries or regions, access to electricity becomes a bottleneck for both decarbonisation and value creation.
To reduce overall consumption, energy efficiency is the most important factor. However, we also need to make better use of the existing power grid by shifting consumption to periods of lower demand. Could industrial flexibility be the key to solving this challenge?
In a recently published study, together with Professor Magnus Korpås at NTNU, we explored the potential of flexibility in various industrial processes to relieve pressure on the power grid during the most critical hours of the year.
- This work has been carried out in collaboration with the research centres CINELDI and HighEFF, as well as the research project FINE.
The power grid must be built to handle the year’s highest electricity demand (peak load), even though much of its capacity remains unused for the rest of the year. Because the grid is critical to societal security, safety margins are also in place to ensure it can withstand failures of key components, such as the N-1 criterion.
By lowering consumption during peak hours, we can free up grid capacity, allow for faster connection of new electricity users, and make better use of available resources.
Case study of Norway’s largest industrial area
We examined the potential in Norway’s largest industrial area, Grenland, and found that peak load in the transmission grid could be reduced by 4% to 14%, depending on which industrial processes are included. This would free up between 80 and 340 MW of capacity.
This capacity equals the power needed for 10,000 to 50,000 homes on a cold winter day – nearly matching the total demand of the 58,000 homes in Grenland. If this capacity were freed up, it could support new electrification efforts, including transport transition, industrial transformation, or entirely new industrial developments.
The study shows that grid load could be reduced by up to 340 MW. A large share of industrial energy consumption goes toward heat production, which has traditionally relied on fossil fuels. By electrifying these processes – such as using electric boilers – significant emission cuts can be achieved quickly.
As an example, the freed-up capacity of 340 MW could reduce emissions from natural gas combustion by around half a million tonnes of CO₂ annually by switching to electric boilers – equivalent to approximately 1% of Norway’s total CO₂ emissions.
While Grenland is unlikely to have such large heating demands for electric boilers, this example highlights the potential of maximising available grid capacity to replace fossil energy. Switching from electric boilers to high-temperature heat pumps could free up even more capacity.
An efficient and nature-friendly alternative
Our study also compares the cost of industrial flexibility to that of using batteries to ease grid pressure during peak hours, as well as the cost of expanding the power grid to boost capacity.
The results show that industrial flexibility costs significantly less than using batteries and is roughly on par with expanding grid capacity. This makes industrial flexibility a highly important and cost-effective way to free up capacity while strengthening the power grid.
Industrial flexibility also has the advantage of reducing the need for grid expansions that disrupt nature. Lowering the demand for new grid investments can ease pressure on natural resources and land use, both of which are already under strain in the green transition. Additionally, power grid expansion has long lead times, slowing the pace of the green shift.
This study shows that flexibility in electricity consumption can make better use of existing grid capacity, delaying or even reducing the need for new grid expansions. In addition to cutting industrial CO₂ emissions through electrification, more flexible industrial processes can also support a smoother, more nature-friendly energy transition.
- The InterPlay research centre aims to foster holistic, long-term energy system planning that supports both climate targets and the preservation of nature and biodiversity.
Five key challenges that need to be solved
While the technical potential is substantial, several challenges must be overcome to unlock this flexibility. Achieving success requires addressing:
- Technological development
- Economic viability
- Energy security
- Regulatory frameworks
- New business models
Technological development is essential not only to improve energy efficiency in the industrial sector but also to enhance the flexibility of new technologies. Operating large energy-intensive processes flexibly introduces new stresses on equipment, an area where industries still have limited experience. Overcoming this challenge requires close collaboration between industry, equipment suppliers, and researchers to develop the necessary innovations.
Reducing consumption, even for a few hours, can have significant financial drawbacks for industrial players. However, since the societal benefits are considerable, it could be economically advantageous to create incentives that encourage flexibility, especially by supporting investments in flexible processes.
Norway’s power grid is known for its high reliability and energy security, but adding more consumption and increasing grid load will put this stability to the test. It is therefore crucial to find solutions that preserve reliability of the energy system while ensuring that flexibility is activated precisely when grid load reaches critical levels.
From a regulatory standpoint, solutions like flexibility markets and alternative connection agreements are already possible. However, clearer regulations with more concrete measures would make it easier for grid operators to offer incentives and leverage flexibility in areas where capacity constraints arise only a few hours per year. Because grid operators function as monopolies, they are subject to strict regulations that can complicate the implementation of such local initiatives.
Incentive needs can vary greatly across locations and industries. While some areas face highly localised challenges, others struggle with issues higher up in the central grid, requiring the aggregation of multiple large loads and stakeholders.
Different industries have different processes. Some can quickly reduce load on short notice and resume normal production just as fast, while others require advance notice of hours, days, or even weeks. For some industries, short-term load reductions come at a low cost, whereas for others, they can be far more expensive.
For longer-term load reductions, the situation may be the opposite. A deep understanding of these process characteristics is crucial for developing business models that generate economic value for society. At the same time, new models are needed to enable non-flexible players to leverage their neighbours’ flexibility in a way that benefits both parties.
Most of the flexibility remains untapped – get in touch!
While some industrial actors have supplied flexibility to reserve markets for decades, most of the potential remains untapped. There is still no clear overview of the total flexibility potential or where it would be most beneficial. Additionally, more knowledge is needed to understand what it takes for industrial players to see value in providing flexibility services and how this aligns with the interests of grid operators.
Do you work in industry, an energy company, or public administration? My colleagues and I are actively working on this topic, and we would love to hear from you – whether you’re interested in our work or have ideas on how to enhance the use of industrial flexibility. Get in touch!
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