Why power2heat might not succeed

What makes or breaks the future of power2heat

With a higher share of renewables in the Dutch energy mix, the hourly electricity production becomes increasingly weather and season dependent. More and more often the production capacity will exceed the regular demand on an hourly basis, resulting in very low or even negative spot market prices. This could be a cost-effective opportunity for energy intensive industries that need to decarbonize their processes. 

One (obvious) option to utilize this excess electricity is to use it for industrial heating purposes, substituting natural gas. Installations like steam boilers can be adapted for dual-fuel use, automatically making a power-or-gas fuel choice based on actual market prices. However, opposite to residential heat, industry processes need higher temperatures that cannot be reached with electrical heat-pumps (that can have an effective efficiency of up to 500%) but require electrical resistors to turn electricity into heat. The efficiency of a resistor is “only” 100%, making the competitiveness with natural gas a much less easy win. 


We would like to introduce the “heat-spread”: the difference between the price of natural gas and the price of power in EUR/MWh on the spot market. When the heat-spread is positive, it will be cheaper to use electricity for heating the boilers. When the heat-spread is negative, it is cheaper to use gas. The Dutch market price for gas on the TTF was very low this summer, with prices around 10 EUR/MWh. The ’normal’ prices in recent years were typically in a range of 20 EUR/MWh. This means that the spot market price should currently be below 10 EUR/MWh (or historically below 20 EUR/MWh) for power to compete with natural gas in industrial heating processes.

Extreme low APX price (occurrences 2018-2019)


Extreme low APX price (scenario 2030)

In the last 18 months the power prices on the APX spot market have shown a few occurrences below 10 EUR/MWh. On average only one hour per month. With a typical installation cost of 10.000 – 50.000 EUR/MW, there is no business case yet for installing resistors. But it is expected there will be much more renewable power capacity connected in the next 10 years. Based on a projection with 20GW solar and 10GW wind power in the Netherlands we calculated a spot market price scenario for 2030.

This scenario shows up to 2,000 hours per year with very low power prices, on average over 160 hours per month. The main occurrence of these low prices is in the early summer months and December. Theoretically this could reduce the natural gas consumption with almost 25% in industrial heating processes. Assuming an average heat-spread of 10 EUR/MWh, this will save up to 20,000 EUR per MW installed electrical resistor capacity in energy costs. This is not only an attractive business case, since its net payback time will be two and a half years, but could also reduce the CO2 emissions with almost 25% annually.

But, the power consumption in most heat intensive industries is nowadays relatively small compared with their consumption of natural gas. The power consumption covers mainly fluid pumps and other baseload applications, so the introduction of large power-to-heat applications (utilized for only 2,000 hours per year) will seriously impact the maximum peak power demand of an industrial plant.

This is an issue, as industrial consumers in the Netherlands pay a monthly fee for their highest peak demand (or “kWmax”) to the grid operator. This monthly fee is based on the highest average peak of the month as measured in a 15 minutes interval. The price differs per grid operator and depends on the connection voltage level but has an average value of about 2 EUR/kW-max per month. Not taking into account, but most certainly having a re-enforcing effect on the conclusion, is the fact that the highest peak in any month triggers a backward effectuated price increase to the new peak level (on average about 16 EUR/kW per year).

Time to act 

So, what parameters can and/or should change to make power-to-heat for industry succeed?

  • Further growth of renewable energy in the Netherlands, at least tripling the current capacity. This is an autonomous trend, expected to happen in the next 10 years.
  • The costs of natural gas shall rise, increasing the heat-spread (specifically the costs of carbon emission, which at a carbon price of only 25 EUR/Ton already adds 5 EUR/MWh). This is an international or at least European defined parameter, which is difficult to influence.
  • Adapting the kWmax fee mechanism of the used peak grid connection capacity. This parameter has a high impact and requires ‘only’ a change of market agreements.

When the natural gas costs jump to 30 EUR/MWh, the heat-spread can double with a positive impact on the business case. But most important is a shift to a more dynamic fee structure of the grid connection capacity. Time to act for regulators and law makers. One might think of special tariffs for dual-fuel installations, or fee-free periods in times of abundant grid capacity. Such tariff changes can make or break the future of power-to-heat in the industry, which in itself is a tremendous opportunity in decarbonizing our energy system.

Interested to discuss this topic?

Please contact Michiel Dorresteijn (Principal Consultant) via +31 6 117 169 27 or mail: [/vc_column_text][/vc_column][/vc_row]


First local energy community is live! LEF in Hoog Dalem – Energy21

This is how local an energy community can be

LEF, based in Hoog Dalem, is all about making the power grid smarter. In this pilot project, an energy community – formed by a group of approximately 15 homeowners – generates its own electricity. The purpose is self-consumption or to mutually exchange this electricity within the community and settle the price immediately. When self-production falls short, energy can be bought from the grid through the use of flexibility or ancillary (grid) services. 

LEF not only stands for Local, Energy and Flexibility, but is also the Dutch word for courage: the act of taking a bold decision to participate in this project and to contribute to innovations in the energy market. 

The essence of the project 

A group of homeowners are generating their own electricity for self-consumption or to be mutually exchanged within the community, settling the price immediately through the application of blockchain technology. While stimulating smart usage of the self-generated energy, there’s also the option to buy or sell the energy on the market when this is more financially beneficial. Combining sensors in the local power grid with data exchanges and allowing them to interact with smart home systems means that smart devices (like thermostats, washing machines and dishwashers) can be intelligently managed. The energy generated is therefore immediately exchanged or stored in the battery storage system. The surplus of energy can be traded on the national energy market. A win-win: the community becomes predominantly self-sufficient and the power grid is greatly relieved. 

For now and for later 

In this project, the residents work together with technology pioneer ABB, energy expert Energy21, software company iLeco and distribution system operator Stedin. Together, they’ll find the answers to questions such as: 

  • What is the most efficient way for the local energy market to function while providing benefits for the residents as well as the grid administrator? 
  • How can we accomplish the mutual exchange of energy and data? 
  • How can we optimally align energy supply and demand? 
  • Can LEF be applied country-wide? 
  • Is the Layered Energy System, the core philosophy on which LEF is based, a good way to locally exchange energy? 

Based in Hoog Dalem, LEF offers insights and practical tools. In addition, major adjustments to the power grid can be prevented with LEF’s help. That way, we keep our power supply reliable as well as affordable – for this generation and the next.  Read the press release here (in Dutch):

Press Release

Would you like to know more about the Layered Energy System or LEF?

Please contact Michiel Dorresteijn (Principal Consultant)
via +31 6 117 169 27 or mail 

Layered Energy System


A tailored approach to data structuring

A tailored approach for data structuring

The growing need to differentiate in the dynamics of the energy market pushes energy service providers to become data driven organizations. As data-driven strategies take hold, in reality we see that big data, data lakes and data analytics not automatically deliver on their potential value. The common pitfall is starting with the data and simply ask what it can do for you. We share some insights and considerations that can help you find value in your (data analytical) investments.

One size does not fit all 

Have you ever tried to get into a suit that says “one size fits all”? Then you probably know that it never really fits. It is either too big and slumps down from your shoulders, or too narrow so you can hardly breathe. In both cases: probably best to wear something else. The same could be said for an operational data environment and an analytical one.

Combining both purposes in one environment enforces opposing needs and requirements into one system, resulting in excessive costs and/or concessions on functionality or prerequisites. The different characteristics ask for a tailored approach for each.

Read the full article here:

Read article

Would you like to know more about data structuring?

For more information, please contact Michiel Dorresteijn (Principal Consultant)
via +31 6 117 169 27 or mail 


Layered Energy System: exploring a new energy market model

Towards a sustainable energy ecosystem with the Layered Energy System

Our energy market model has been set up top-down and centralistic, from production (via transmission and distribution) to consumption. But our current model is no longer fit-for-purpose. For example the model is not suitable for end-users with solar panels that generate a surplus of energy and feed it back into the energy network (bottom-up). This leads to questions that urgently need to be answered. 

Local energy community
A very important question regarding a (new) sustainable energy ecosystem is: what should be the role of local energy communities in our energy system? Distributed generation and flexibility are part of the cause as well as the solution of the challenges the energy system faces. Demand-response by aggregators is currently not very attractive for the owners of flexibility (the end-user) nor is it a scalable solution in the long run. At the same time, local communities of end-users are founded and are experimenting with energy sharing, flexibility and with distributed network technologies (like blockchain). We believe that this system-averse social trend is an important factor in the energy transition.

Layered Energy System Concept
In close co-operation with the Dutch distribution grid operator Stedin, Energy21 developed the Layered Energy System (LES). In an earlier phase we explored the concept of local energy communities and local markets. Now, we have described more detailed the mechanics and roles of stakeholders in a Layered Energy System. We believe that the concept of LES provides a feasible elaboration of the “Citizens Energy Community” as mentioned in the EU Clean energy package.

LES offers insights and possible solutions to stakeholders’ issues moving towards a sustainable energy ecosystem. Energy21 is proud to present the LES Whitepaper and continues to discuss the topic with all stakeholders in the energy ecosystem.


Would you like to know more about the Layered Energy System?

For more information, please contact Michiel Dorresteijn (Projectlead Market Analysis & Blockchain Technology)
via +31 6 117 169 27 or mail


Energy transition: challenges and solutions

The energy market is in transition. More renewables, increasing demand for electricity and the rise of electric vehicles are putting incredible pressure on the grid. New players enter the market and current ones need to adapt. All these factors create a technically complex discussion on both a national and international level.

USEF (Universal Smart Energy Framework) Foundation launched a serious game to increase understanding of the new market dynamics and facilitate a broader dialogue. The interactive documentary covers three major dilemmas for setting up an effective energy market:

    1. Flexibility versus grid reinforcement
    2. The admission of one or more aggregators
    3. The degree of regulation of the market


What decisions would you make for a future proof energy market?



Finalist of The Challenge Engineering 2018

In The Challenge Engineering 2018, our colleague Alex Trijselaar, Product Manager, presented Energy21’s industrial solution as the best innovative solution to fight climate change.

After an exciting selection procedure, Alex was nominated as one of the final three to present the best solution for the climate case originated by KIVI. He presented Energy21’s industrial solution that focuses on digitalizing the energy processes of larger industrial sites.

Alex commented: “It was an honor to present our solution in the finals to a professional jury and an audience with Marjan van Loon representing Shell to create more awareness around this topic. This is an often overlooked solution, while some parties started implementation as early as 2015 and the results are very promising.”

Diederik Samsom, one of the jury members, said: “For sure the best contributor to CO2 reduction if you will work with the big twelve in Dutch industry.”

You can review his introduction here, or review the final pitch on Youtube (in Dutch).

Would you like to hear more?

Contact Thomas Crabtree via or +31 6 3085 2747 to discuss your planning challenges. Also, read more about how we can deliver, manage and optimise your energy processes using our software solution EBASE. Or take a deeper dive into other energy optimisation strategies for industrial energy users:

EBASE Solution Strategies

Utility planning for industrial energy users

The concept of industrial symbiosis is that various industrial processes benefit from each other’s presence. Key in being able to make waste streams useful is a clever utility planning. Or as we like to state: waste + plan = feedstock.

Industrial symbiosis saves raw materials and energy, minimizes emissions, cuts logistics costs and exploits synergies. The concept can be applied to multiple sites being connected, as well as having dependencies in internal processes.  An interesting example of this concept is the “Verbund” mindset of our client BASF.


Utility planning as a driver for industrial symbiosis

On complex industrial sites the primary production processes and energy & utilities processes are strongly interconnected. Most obviously, the demand for energy and utilities is dependent on the intensity of the production process.

An accurate translation of production planning to energy and utilities demand is therefore key to avoiding excess energy generation. Where excess electricity can be fed into the national grid, excess steam and utilities are often wasted (check this infographic on creating value of excess steam).

There are several ways of improving your energy and utility planning.

Assuming the translation of production plans to energy demand is accurate, the starting point is to create insight in the accuracy of the demand plans of individual plants.
Creating awareness of these numbers will often lead to a natural improvement in accuracy.
Next, ex-post analysis of plan data versus actual demand can indicate structural deviations, which can be accounted for in the planning process.
Finally and when applicable, you can use advanced algorithms to create demand forecasts based on weather data and other relevant parameters.


How your utility planning is affected by heat and waste streams

If your operation contains exothermic processes and/or useful waste streams, utility planning becomes more interesting and complex. You can feed waste heat of exothermic processes back into the steam network, while combusting waste streams in boilers to generate ‘free’ steam.

If production plans fluctuate heavily over time, so will waste streams and energy demand. Key in these situations is to smartly combine all relevant parameters to reach the most optimal planning. One example is to schedule maintenance activities in periods when less waste streams are expected, in an attempt to match a reduced flow of free steam with reduced demand.



We can help you to improve your utility planning!

Contact Thomas Crabtree via or +31 6 3085 2747 to discuss your planning challenges. Also, read more about how we can deliver, manage and optimise your energy processes using our software solution EBASE. Or take a deeper dive into other energy optimisation strategies for industrial energy users:

EBASE Solution Strategies

Towards Industry 4.0: calculating the value of your optimisation potential


Working on a more sustainable energy future is not only a noble effort in relation to future generations, but can be financially attractive for current business as well. The two infographics below back up this statement with numbers and offer a calculation method that can help you seize the value of your optimisation potential. Both are based on our experiences with our client group of (industrial) energy users.


Towards Industry 4.0

All the projects that we are working on within this group share a strong digitalisation aspect, in which raw sensor data are aggregated to higher-value context information. By making this information available at (near) real time, operators are capable of seizing opportunities that occur either on the market or within their own processes, without jeopardizing security of supply. These are typical first steps towards an Industry 4.0 operation.


Infographic #1: Calculating the value of reducing excess steam

For example, a medium sized plant with 30 ton / hr production could save €369,000 / year from literally disappearing into thin air while decreasing their CO2 footprint. How? Check this infographic!



Infographic #2: Calculating the value of monetizing flex on the imbalance market

For example, by capturing 5 minutes of every high imbalance price PTE in 2017 a medium sized industrial site with 10 MW of flexibility could have created power revenues of €430,000 while supporting stability of the grid. How? Check this infographic!



Interested to hear more?

Call Thomas Crabtree (+31 6 3085 2747) and find out how you are able to calculate the value of your optimisation potential. Or check our dedicated web page for industrial energy optimisation.



Energy analytics: optimise your operation on more than just thermodynamics

Traditionally, energy optimisation methods for industrial energy users have focused on thermodynamics of core processes. With the ever increasing possibilities of digital technologies and energy analytics, opportunities arise to subsequently optimise related processes such as consumption planning, procurement and asset dispatch. Combining internal with external optimisation creates synergies boosting business results. We call this System Optimisation.


Energy analytics: how to start

By adopting analytics in industrial energy operations, relevant data from multiple sources can be combined in the energy planning process. A key aspect while combining sources is to create uniformity in data received. This can e.g. include aggregating time series to fixed intervals, converting data into different units and aggregating measurements to the desired portfolio level.

When data has been uniformed, a data structure can be created to greatly ease the analysis process. Typically these data structures are constructed by creating different sectional views of your site. Once the uniformed data structures are in place, System Optimisation can be applied.


Using energy analytics to achieve system optimisation

Assuming the efficiency of your energy generating assets has long been optimised, it is time to look at how much energy is generated and at which costs. Starting point will generally be to have enough energy available for your primary production process at all times. Accurate energy demand planning is therefore essential to avoid excess generation.

Another route is to increase production during times overgeneration cannot be avoided. This can be the case when contracts (e.g. for ancillary services) prevent your energy assets from ramping down, or if steam production from waste streams exceed current demand. Preventing this requires an easy-to-access overview of contractual obligations, both on the production side as well as on the energy generation side.

While temporarily reducing production because of high energy prices is generally not considered feasible, increasing production during times of low energy prices is often a possibility. This requires at least an up-to-date overview of day-ahead and intraday prices, but might also require a real time imbalance price forecast. By combining the latter with a real time view on portfolio imbalance, opportunities on the imbalance markets can be seized.

Many other internal and external conditions can be taken into account, e.g. grid capacity contracts and emission reduction obligations.


We can help you to achieve system optimisation using energy analytics!

Contact Thomas Crabtree via or +31 6 3085 2747 to discuss your goals and challenges. Also, read more about how we can deliver, manage and optimise your energy processes using our software solution EBASE. Or take a deeper dive into other energy optimisation strategies for industrial energy users:

EBASE Solution



RFI Technology partner ‘Market Service App’ for local energy markets

RFI Development and integration ‘Market Service app’ for local energy markets

Stedin and Energy21 designed the Layered Energy System (LES) based on the USEF framework. LES is a community-based market model that offers solutions to a variety of existing and future problems resulting from the energy transition. The next step in development of the Layered Energy System is doing a proof of concept in a real life local market setting. The project is looking for technology partners. 

Proof of concept in real life local market setting

Together with technology partners ABB and Enervalis, Stedin has found a location (Hoogdalem) in its grid area where a group of households are willing to participate in the first pilot project. Advanced technology, such as Heat pumps, Batteries, PV, internet-connected appliances (e.g. Laundry machines), is present in these houses enabling a full test of all functions of the Layered Energy System.

The project is looking for a partner who is capable of developing, and integrating the necessary ‘Market Service app’ on the Energy Web Foundation Blockchain. The market-service app has 3 goals:

 It matches local demand and supply of energy (through bids) in a market program (load profile)
 It brings together national and local need of flexibility (through flex offers and orders)

 It is able to process the effect of ordered flex into the market program (load profile)

The application will be a proof of concept and must be compatible with the blockchain of the Energy Web Foundation Tobalaba test network.

Interested to become a technology partner?

For more information, check Stedin’s RFI documents or contact Michiel Dorresteijn in case of any questions. Check our dedicated expertise page The energy system – Market model design to read more about the Layered Energy System.