The interviewed results (shown in Fig. 1) show that the readiness for energy flexible buildings is mainly divided into three aspects: buildings, grid & market, and communication between buildings and grid (Building-to-Grid). Meanwhile, the technical readiness, regulation & policies, and stakeholder collaboration are important and influence the progress of buildings to provide energy flexibility to the grid.
Building automation and energy flexibility
All interviewees state that building automation is essential for buildings to be ready and provide energy flexibility. Building automation is able to shift energy demand or shedding energy load without compromising the comfort in buildings. However, the currently installed BMS (building management systems) have a low level of automation due to buildings owners’ financial concerns. For instance, there is a discussion about applying B2G (building-to-grid) at the new university super hospital in Odense in Denmark, but it is not certain, because universities as public sector have to make a public tender on new buildings which often result in the cheapest BMS solution, with a low degree of advanced automation.
Building control providers do not see much potentials for themselves to profit from B2G, because B2G is about incentivizing changes in buildings’ energy behavior, and this is difficult. Buildings would have to make relatively large changes to their energy behavior for a small economic gain. “If it is easy, it can be done,” a BMS provider said and specified that it has to be easy for end users that means automation. It would likely fail if a project relies on end-users to make changes to their daily routine.
Providers of BMS foresee the future of the renewable energy resources, e.g. photovoltaic and electric vehicles. They believe the best solution is not building charging stations but implementing them with the BMS. It would then be necessary to upgrade current BMS that do not provide this function.
To regulate the system with different flexible appliances and electricity generation units, building automation system should include HVAC, electric cars, battery storage, heat pump and/or PVs (photovoltaics), and predict energy consumption of a building based on weather forecasts and occupant behavior.
Concerns from buildings’ side
There are three main concerns for buildings to provide energy flexibility (shown in Fig. 2): how much does it cost compared to the benefit, how much it can influence the comfort, and how complicated it is to integrate into the existing building management system?
One significant barrier that held back building owners from implementing B2G is the investment– it is considered to be too large and the benefit to be too small. Especially, it is too expensive to install a system that fulfills the grid’s requirements for flexibility.
In theory, for building automation, building managers could remove the controllability from occupants, and simply enforce changes – such as lighting control or temperature control. However, this would lead to dissatisfaction, so it is unlikely for building managers to consider changing occupants’ energy behavior. Especially, without sufficient incentives, it does not make sense for consumers to change comfort and behavior.
Usually, various parties are involved in the building control and energy programs, and they all have different agendas. This can make the system more versatile, but it can also make it inefficient since it must comply with different agendas. According to an interviewed building management system provider, the BMS can be customized based on buildings’ needs. However, if the system is not used as intended, it might not regulate the energy system in the way that it is designed to do. To the best of our knowledge, this issue has not been addressed by any literature. Most flexible energy systems are still in their trial phases, and developers use the technology as intended. This result shows that company policies affect the implementation of flexible energy technology, and the efficiency of different technologies can vary depending on whether they are used as intended or not.
There are more significant incentives for buildings equipped with building automation to participate in the demand response programs, that buildings can be automated on a large scale with small enough effort. In the future, due to the expected increase in the number of building automation systems, it could become easier for buildings to provide energy flexibility without compromising the comfort or much effort.
Literature shows that it expects consumers would change their behavior when using energy consumed appliances or devices (Hadis Pourasghar and Javidi 2013; Paetz et al. 2012). However, the interviewed electricity supplier believes that consumers most likely stick to their habits and do things at the time which is most convenient for them. This causes the system to be more dependent on devices which can be turned on and off without disturbing the primary service (Hadis Pourasghar and Javidi 2013). Therefore, energy flexibility might not depend on consumer behavior, but more on flexible devices which can regulate their energy consumption automatically. It would be smart that the installation comes with intelligent design, for example, a heat pump which could have flexibility built in by design.
Building refurbishment supports opportunities to reduce energy consumption in buildings. One important factor in building energy refurbishment is the insulation of the building envelope. According to one of the interviewees, a Danish case study- Traneparken shows the decrease in energy consumption after building energy refurbishment. The insulation can be added either from the inside of the building or from the outside. It is easier to insulate from the inside, but this means that some of the indoor space is lost as the walls are getting thicker. Insulation from outside usually is more expensive and buildings grow in size without adding any indoor space.
One problem for buildings, especially private households is that there is no desire for energy refurbishment if building owners cannot see what come out of their investment. In the public opinion, people would rather buy a new kitchen than better insulation.
Referring to the efficiency of new and better insulation in buildings that are already well insulated, an interviewed expert points out that there is no meaning to optimize the energy efficiency by adding insulation with low benefit compared to its cost.
IAQ (indoor air quality) is decreased as the insulation efficiency is increased (Steinemann et al. 2017). The natural ventilation is lowered as insulation efficiency is increased because the building is more airtight. But in principle, the ventilation efficiency should increase as well when the insulation efficiency is increased, and it should be considered as a ventilation problem, not an insulation problem. The interviewed expert in construction and buildings states that the ventilation optimization is done automatically with systems such as WindowMaster, which automates natural ventilation by mechanically opening and closing windows.
Regulation and policies
The complexity of the energy system regulation makes the energy system very difficult to be more flexible. It needs to be changed for flexibility to occur, but the needs are very small as the security of the power supply is so high. The interviewees believe that Danish legislation needs to be changed to further promote the implementation of flexible energy systems.
The requirement for providing energy flexibility to the grid is high and complicated. Compared to the rewards, the investment cost to install a system that matches the requirements is considered to be too high. Meanwhile, it would motivate smaller consumers to provide energy flexibility if the regulations and legislation can be easier to fulfill. Nowadays, to participate in the electricity regulating market in Denmark, the requirement is a minimum electricity supply of 10 MW, which is much higher than an individual building can provide.
Politics have an influence on the Danish energy system and where solutions and incentives come from. Whenever a large change is needed on the demand or production side of the system, politics are the initiator or the executioner for creating incentives for using new technologies or exclude older technologies.
For instance, large data centers are going to be built in Denmark, Facebook in Odense, Apple in Viborg, Google in Fredericia, and have already created incentives to reduce or remove the levies tied to the use of heat pumps, entirely. With a deal made with the Facebook data center, Fjernvarme Fyn in Odense, Denmark will be able to receive the excess heat and avoid the investment cost for replacing an old district heating plant. This means that there are no levies tied to the heat production and electricity used in household heat pumps. It shows that special rules can apply if a larger change would happen to the system with socio-economically benefit.
Therefore, politics are the decision makers for creating incentives for buildings to become either energy self-sufficient, an integrated part of the grid or both. According to the interview with the energy consulting, levies are the deciding factor for buildings to provide energy flexibility with the socio-economic impact.
Tariffs and taxes
One large barrier to energy flexibility is the tariffs and taxes associated with power production. For instance, one interviewee introduced that Modkraft3 conducted an experiment to offer consumers free electricity at nights. However, the problem is that the consumers still need to pay the tariffs, which in fact are the main part of the original cost. Therefore, the cost is not significantly reduced. As tariffs cannot be reduced, the incentive for behavior change is minimal. In Denmark, PSO is going to be removed during the period of 2017–2022, and the removal of PSO can increase the renewable energy resources and also be expected to encourage more electricity consumption due to the cheaper electricity price without the PSO.
Market condition and microgrids
According to the interviewees, for the preparation of a future smart and flexible energy system, smart meters with two-way communication and hourly electricity pricing must be implemented to create an incitement for building owners to regulate their energy consumption. By doing so, the peaks in the system can be shifted by using demand response management (DRM). The energy system can be optimized using flexible devices and therefore become more stable.
The Danish government is performing the preliminary work by smart meter installation. According to section 2 of the Danish Act on Smart Meters and Metering of Electricity at the End User (Energistyrensen 2013), all end-users must have smart meters by December 31, 2020. This is the first step towards hourly pricing, but a final step is still needed. New legislation may push the system in a certain direction, but often companies and their policies determine the technologies.
A greater incentive for energy flexibility would be the establishment and operation of microgrids, especially countries without strong and stable grids. Denmark is a small country with a strong grid, and the need for energy flexibility is, therefore, less urgent. Denmark is currently on two separate tracks when it comes to supporting the increased integration of renewable energy. On one hand, new interconnections are made to trade electricity internationally, and on the other hand, the potential for increasing the amount of flexibility is being investigated.
There are two sides to introducing more self-sufficient buildings. For a system response, the increasing number of islanded systems connected to the main grid would result in more peak plants, which would not be a reliable solution. Another downside to the island mode of larger buildings is that the district heating network loses a customer that increases the heat costs for the rest of the network’s customers.
Another important question is what the energy flexibility in buildings is supposed to accomplish: is it everyday flexibility or in case of emergency. It could become much cheaper to utilize flexible consumption instead of having large production facilities on standby in case of emergency. In the near future, data centers are being built in Denmark, which will not use flexible consumption and therefore becomes a baseload. This will likely create an incentive for energy flexibility in buildings.
Distributed energy resources
PVs as a popular distributed energy resource is part of the energy flexible system. However, the current Danish legislation impedes the system. Under the current Danish legislation, PVs are allowed to be used in the distribution system, and PV owners do not need to pay for the electricity transport. The PV owners only need to pay for the net exchange power, independent from the wholesale spot prices or the capacity used in the distribution system. The purpose of this arrangement is to promote PV installations, but it has some unforeseen side effects. The capacity used by the PV owners must be paid by other electricity users, which makes it profitable for PV owners, but expensive for everyone else.
There is a potential for electric cars and battery storage in the grid because it can withhold a large amount of energy, e.g. storing surplus electricity production or charging electric vehicles. If energy storage becomes more efficient, it could be more feasible for buildings to be more energy flexible.
Stakeholders’ collaboration
Communication between energy suppliers and consumers is important. For instance, electricity suppliers communicate with their consumers by smart metering, and electricity suppliers believe that providing hourly electricity price and consumption information can create opportunities for consumers to provide energy flexibility to the grid.
Energy suppliers try to communication with buildings regarding incentives for energy efficiency. For instance, a district heating company and an energy consulting company collaborate to analyze energy information and provide the analytical reports to their partners and customers. By this way, all their members have the possibility to explore new opportunities created by incentives.
Collaboration between different actors on the market is important for the joint goals of the energy flexibility to become a reality. One interviewee states that there are several experiments conducted in Denmark already, e.g. Bornholm Sygehus, Modkraft, and Rosengårdscenter.