Energy management and balancing

Energy management is the combination of all measures that ensure minimum energy use for a required performance. It relates to structures, processes and systems, as well as human behavior and changes. We will also speak about the topic of balancing, which ties into that. 

For example, energy management is used as a means to control and reduce a building’s energy consumption, allowing owners and operators to:

Reduce costs – energy accounts for 25% of all operating costs in an office building.

Reduce carbon emissions to meet internal sustainability goals and regulatory requirements.

Reduce risk – the more energy you use, the greater the risk that energy price increases or supply shortages could seriously impact your profitability. Energy management solutions can help to reduce this risk by lowering your energy demand and managing it to be more predictable.

The German Federal Network Agency has adopted rules that make it easier for renewable energy producers to provide balancing energy. But what exactly is balancing energy and what do the rules mean?

Balancing energy: On the way to more energy efficiency

To keep a scale in balance, the left and right pan must contain exactly the same mass. If you add weight to one pan or take weight away from it, you have to do the same with the other pan, otherwise the balance will not be in equilibrium.

The same principle applies to the way our power grid works: power generation and consumption must be in balance at all times. To keep our grid stable, electricity generation must increase when electricity consumption increases. And when consumption decreases, electricity generation must be reduced.

When it comes to ensuring the stability of the grid, generation plants such as wind turbines and consumers such as large industrial companies play an important role. In Germany, power generation plants and consumers are organized in balancing groups. A balancing group is a virtual energy account managed by an “accountant” – the balancing group manager. This person predicts how much electricity will be generated and consumed in his balancing group. But there are times when the predictions don’t come true. For example, when a power plant is suddenly taken off the grid, when there is no wind for the turbines, or when there is an unexpected increase in electricity consumption. In these cases, there is either too much or too little electricity in the grid and the balance group has to restore the balance. This is where balancing energy comes into play.

Three types of balancing energy

To increase or decrease the amount of electricity in the grid, transmission system operators buy balancing power from generation plants that can supply electricity at short notice. To make this work well, transmission system operators hold auctions in which plant operators are asked to bid for the amount of electricity they can supply or take from the grid at short notice in an emergency. For example, power plant operators can reduce the amount of electricity they feed into the grid, while consumers can increase the amount of electricity they buy.

There are three types of balancing power:
  1. Primary balancing energy means that the system operator must provide the agreed quantity of electricity within 30 seconds of the request.
  2. Secondary balancing energy means that the agreed amount of electricity must be provided within 5 minutes.
  3. Minute reserve (tertiary balancing energy) means that the agreed quantity of electricity must be made available within 15 minutes.

The German Federal Network Agency has decided that the rules applied by transmission system operators in control energy auctions must be changed for the second and third types of control energy. Previously, system operators had to guarantee that they would be able to provide a certain amount of secondary control energy one week in advance. Auctions for minute reserve energy were held on weekdays, but not on weekends. Therefore, plant operators had to declare on Fridays that they could provide a certain amount of power for the weekend and the following Monday. For power plants that can easily adjust their power generation, such as coal-fired and other conventional plants, this process did not pose much of a problem. However, for wind and solar plant operators, it was very difficult to predict the amount of electricity they would be able to supply over such a long period of time because the amount of electricity they generate varies greatly and depends on weather conditions.

Now renewable energy producers can also provide balancing power

In order to strengthen the role of renewable energy producers in the provision of balancing energy and to support them in competition with fossil power plants on the balancing energy market, the auctions for secondary balancing energy and minute reserve now take place throughout the week, from Monday to Sunday. Bidders no longer have to keep secondary control energy on standby 12 hours a day – 7 days a week – but only 4 hours. And the minimum amount of power that must be provided has also been reduced: instead of five megawatts, plant operators must provide only one megawatt.

These changes mean that wind and solar plant operators can now forecast their power generation more accurately, taking into account current weather conditions, and participate in daily balancing power auctions. In addition, the change from five to one megawatt means that operators of smaller plants can now also contribute to the provision of balancing energy. 

Grid Control Cooperation (GCC)

In Germany, there are four transmission system operators responsible for balancing the generation and consumption of electricity. Since May 1, 2010, these four transmission system operators have been working together under the Grid Control Cooperation (GCC). Whereas in the past situations arose where a power surplus in one grid area and a power deficit in another were balanced independently, now imbalances are balanced within the grid areas themselves and only total deviations are balanced, provided the necessary transmission capacities are available. This balancing within the GCC saves control energy and thus overall costs.

International grid cooperation (IGCC)

In recent years, the GCC has been continuously expanded beyond the borders of Germany. Meanwhile, Denmark, the Netherlands, Switzerland, the Czech Republic, Belgium, Austria and France are also members of the IGCC. To exchange energy across borders, no small transmission capacities are kept at the borders. Instead, spare capacity that is still available after intraday trading is used and less control energy is used through the IGCC without reducing the provision of control reserves. Nevertheless, this additional netting saves tens of millions annually.

Value of netted imbalances

Balancing in the automotive industry

Balancing is also used in the automotive industry. By balancing the energy in a closed system, an attempt is made to make it more efficient and durable. It does not matter whether the balancing takes place within a battery, an e-vehicle or a power grid: 


The battery may have inaccuracies due to deviations of the individual components. Some cells therefore discharge faster than others. This can lead to deep discharge or overcharging of individual cells or the entire battery and thus to destruction of the storage device.


A vehicle has many consumers, some of which must be supplied simultaneously. In order to fulfill this task, the battery management system (BMS) must observe several areas in parallel, compare them and create forecasts in order to prevent potential damage to the vehicle or the battery.

Power grid

Our power grid is similar to an electric vehicle, the only difference being that it has more than one source feeding energy into it. To ensure grid stability, deviations between power generation and consumption must be balanced. The increasingly popular idea of a smart grid can be compared to a BMS. The BMS would be the control center and the storage our grid.

We at magility will continue to keep an eye on developments in energy management. 

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