Extra revenue for the greenhouse through demand response in the heating system

Sigg-Plant is the leading supplier of cucumbers, tomatoes and paprikas in Northern Europe. Seedlings are grown in modern production facilities under optimal growing conditions. High-quality seedlings are grown using highly automated systems. Heating is a significant part of the cost of running a greenhouse, so it is important to compare different heating options and to invest in energy efficiency.

Sigg-Plant’s greenhouses had previously been heated by gas and district heating, but fluctuating energy prices in both directions prompted Sigg-Plant’s CEO, Tommy Sigg, to look for alternatives for heat production.

We decided to invest in new electric boilers because they brought flexibility to our heating system and the opportunity to optimise the use of different energy sources, notes Sigg.

Additional revenue from the flexibility of electric boilers

Electricity production and consumption must be in balance at all times. Hydropower and fossil fuels have traditionally played an important role in balancing electricity production and demand. However, the phasing out of fossil electricity production and the growth of intermittent renewable energy sources, such as wind and solar power, will bring new challenges to the grid, and other methods in addition to hydropower will be needed to balance the grid.

The greenhouse can optimise the use of the electric boiler based on the price of electricity and thus save on its own electricity costs. Electric boilers offer rapid flexibility and are therefore also well suited to balancing the frequency of the electricity system. In the frequency reserve market, Fingrid pays the customer for the ability to support the frequency of the electricity grid when needed. In practice, this means a temporary increase or decrease in the use of electricity, depending on the situation in the grid at that time and the selected reserve market product.

Sigg Plant already had previous experience in demand response for greenhouse lighting control. “I thought that the electric boiler could also be used for demand response, and we started to investigate the matter. Fingrid’s frequency reserve requirements have recently become more stringent, so we needed a reliable supplier who understood these requirements and could meet them. We’re talking about big money, so delivery time was also important to ensure a quick return on the boiler investment,” Sigg explains.

Fortum supplied Sigg Plant with the necessary measurement and control equipment for the boilers and tested the system to Fingrid’s specifications. Fortum also has the capability to participate in different demand response markets at different hours, enabling the customer to achieve the best possible return. This is particularly useful with equipment such as electric boilers, which are either on or off depending on heat demand and electricity prices. 

The tools we offer allow for automatic selection of the appropriate market for different hours of the day, says Business Development Manager Antti Mäkinen from Fortum.

Working together for the common good

Through Fortum Spring, Fortum’s role is to provide access to the reserve market for flexible consumption assets. For the owner of the boiler, this enables revenue on investments that traditionally have not generated cash flow. At the same time, it contributes to the balance of the Nordic electricity system and thus to the use of renewable energy.

We operate between the customer and the reserve market. We select the most suitable market for each application and provide the market with the flexibility of the customer’s equipment. So, in simple terms, when the electricity price is low and the boiler is running, we choose the flexibility market that is suitable for that situation and another one for high electricity prices. Our expertise is in selecting the appropriate market based on the equipment and its use so that the customer’s primary need – in this case, heat production for plants – is not compromised. The customer does not need to understand the technical details of numerous markets such as FFR, FCR-D, FCR-N and m/aFRR, notes Mäkinen.

"Everyone was pulling together in this project; the Sigg Plant team has a sense of entrepreneurship, and they have pioneers who are willing to innovate. Sigg Plant’s partners – the boiler manufacturer and the automation system supplier – were both very excited to work together. Other greenhouse growers in the Nordic countries could benefit from a similar solution in the future," Mäkinen adds.