Dutch direction: integrating micro CHP into a smart electricity grid

Considerable investment in micro CHP is expected in the Netherlands in the near future, and there are indications that the market could move very fast. Both industry and government are interested in ensuring they are ready for the change. As a result, various research projects are underway to overcome technical challenges and ensure DE units can work together in a smart network. Martijn Bongaerts writes.

The Netherlands already uses a large amount (around 50%) of combined heat and power (CHP), mainly in industry and in greenhouses. Because of the use of cogeneration and natural gas, electricity production has been relatively clean in the Netherlands. In addition, the share of sustainable electricity is growing, with large-scale wind and the use of biomass and waste in power stations accounting for much of this growth.

The next step to a more sustainable energy supply is to use smaller-scale CHP, such as micro CHP in houses. The combined production of heat and electricity appeals to many people’s imaginations and the development of micro CHP is currently in full swing. Micro CHP will probably be the successor of the high-efficiency boiler, which was developed by Gasunie (a then integrated grid and gas supply company) and has been on the Dutch market for 25 years.

Micro CHP in the Netherlands

In 1995 Gasunie started to study the potential for micro CHP to succeed the high-efficiency boiler. Various types of micro CHP were tested and installed in houses, but only on a small scale. The experiences with these systems over the next decade or so were not positive enough to start a larger-scale field test.

However, by 2004 Gasunie were confident enough to organize a bigger field test. In this large field test, conducted with commercial energy companies and the Dutch environment foundation Stichting Natuur en Milieu, about 50 micro CHP units (Whispergen mk4) were installed in the houses of mainly employees of energy companies. The Whispergen mk4 has an electrical output of 1 kW and a thermal output of 7 kW and is based on a four-piston Stirling motor. The 50 units are combined with an indirect combustion boiler.

The test – to conclude in spring 2007 – aims to gain the first experiences with the production of electricity with micro CHP by ‘real people’, as well as to draw attention to and start a discussion about micro CHP. Discussion is necessary on, for instance, feeding self-generated electricity to the public grid: what should be the feed-in tariff and what changes are needed in the meter? The first results are positive and it appears that the integration of micro CHP in Dutch houses can be relatively simple and certainly acheiveable.

Meanwhile, GasTerra – the trade and supply division of the now split Gasunie – is running tests on a Microgen micro CHP unit. This unit, customized for the Dutch market and based on an earlier Microgen unit, integrates the production of hot tap water into its concept. A field test with 25 such units has now started, with plans for a total of 500 Microgen and the Whispergen mk5 (successor of mk4) units planned for 2007.

The next steps

The large manufacturers of central heating boilers have been working together under the Smart Power Foundation (SPF) to introduce micro CHP to the Netherlands. The box on the next page describes the SPF’s predictions for the micro CHP market.

The manufacturers have expected that micro CHP will be more expensive than the high-efficiency combi-boiler, but this higher price can be reduced in about five years. To achieve this, the government will need to support the technology by introducing subsidies.

Micro CHP opportunities

For the time being, micro CHP will operate where there is a demand for heat. In the (near) future, it is conceivable that micro CHP will operate according to the demand of electricity (but certainly in combination with an efficient storage of the simultaneously produced heat).

There will be a lot of opportunities when this becomes possible. For instance:

  • when there is an imbalance in the electricity grid, distributed generation such as micro CHP can partly compensate the imbalance
  • it can be profitable to operate micro CHP during peak electricity use, when electricity is expensive on the power exchange
  • a lot of micro CHP units can be controlled as a virtual power plant. Instead of using a large power station, an electricity producer can operate a lot of small power stations (CHP plants).

These are just three examples, but there are more benefits to micro CHP units in combined action. For most of these operations the remote control of machines or other intelligence units in the system will be needed. There are several ways to create a system with more control and intelligence, but in all the scenarios information and communications technologies (ICT) and communication will play an important role.

To research and develop all the possibilities and requirements, Energy Valley – a coalition of government, knowledge centres and companies – founded an organization called Smart Power System (SPS) (see box on p. 62). Among the 11 Dutch companies participating in the organization are grid companies, knowledge centres, ICT companies and a trader of natural gas. At the moment the SPS is running three trials on the control of micro CHP using ICT. Two of them are described on p. 64-65.

A condition to make a smart power system possible is the use of smart metering. Such a meter can communicate with the micro CHP unit and the meter reading can be done at any moment. In a decision by the Minister of Economic Affairs in the summer of 2006, every household in the Netherlands will get a smart meter within about the next six years. The meter will be owned by the grid company.

Micro CHP has been getting the most attention in the development of a smart power system, but the system has to be generic. Also, other distributed generators, such as on-site photovoltaic (PV) cells and wind turbines, as well as storage systems (electric and/or heat) must be allowed to be considered as part of such system.

The total energy system can only be optimized when these generators are admitted by a smart power system. The optimization of the system can be done on different areas, including economics, sustainability and security of supply.

Integration in the ‘smart’ electricity grid

The soon-expected introduction of micro CHP in the Netherlands and the fast growth of this market will be a big step to a sustainable energy supply. Also the other qualities of micro CHP will be positive for the society.

But all this have to be facilitated by the electricity and natural gas grid. The large-scale introduction of micro CHP and other types of distributed generation will lead to another vision of how to design, develop and manage these grids.

The electricity grid especially will be influenced substantially. This grid is developed for the transmission and distribution of electricity from ‘central’ power stations to households – a one-way ‘travel’ on the traditional electricity grid.

On the contrary, distributed generation will cause two-way ‘travel’ (transmission and electricity exchange) on the grid, so currents in the grid will be more unpredictable. The peaks and off-peaks will be uncertain and the absolute difference between maximum and minimum currents will increase. The grid has to deal with all the possible cases. This will become more complicated when micro CHP will operate on the market price of electricity on the power exchange.

Besides the issue of grid capacity the grid companies will have to deal with the following issues:

  • short-circuit power – when there is a short circuit in the grid the current will be high. The components in the electricity grid are designed to withstand these currents. The short circuit power will be a lot higher when there are many distributed generators in the grid as all the small generators will feed into the short circuit. It might be necessary to select the components to meet these heavier requirements. This will obviously lead to a more expensive grid compared with the traditional ones.
  • safety in the grid – when maintenance or repair work is required on the grid, service personnel must be assured that there is no voltage there. Without distributed generators in the low-voltage grid, this is easy – because the low-voltage grid is radial, the current can only flow one way. However, with distributed generation, generators will be randomly connected to the network. This can cause unexpected voltage on the grid while it is being serviced. This situation is unacceptable and must be prevented.
  • protection of the grid – when a fault occurs in the grid, protective devices will disconnect the interrupted section in the grid. The protection is selective so that just a small part of the grid is switched off and the reaction time is very short. However, this conventional protection concept is based on ‘current from power station to household’; a totally new concept is needed when there is a high penetration of distributed generators.

At the moment there are not many such problems in the energy grids because the number of distributed, small generators is still low. But it is very important for grid companies to do research on the possible effects in the (near) future.

The current grids – which are inherently inflexible – have a very large disadvantage compared with the above changes. Their lifetime and the depreciation time are about 40-50 years. So every cable or transformer we apply in our grid today will still be in use until about 2050. A grid company in the Netherlands will recover the costs in 40-50 years, so it is very important to have a long-term vision.

In order to develop this vision, the future must be considered. To make it possible to include micro CHP in an optimal way, the grid companies Continuon Netbeheer, Essent Netwerk and Eneco NetBeheer study, as participants of the Smart Power System programme, the effects of micro CHP and other distributed generation on the grids. One part of the study will be theoretical, such as developing a simulation tool that can analyse electricity grids, gas grids, distributed generators, and energy storage.

The other part will be practical where a series of tests will be carried out. The first test, started in November 2006, is the so-called ‘paddock trial’. In a testing hall, 48 micro CHP units are installed with a ‘real’ electricity grid, gas supply and heat transport, behind a MV-LV 75 kVA transformer connected to the public MV grid. (See box on p. 65.)

The paddock trial will last for about three months and will hopefully result in some of the first insights into the effects of micro CHP on the grid. But this test will not give the full answer to the questions. More research will be needed. That is why there are plans to establish a multi-utility laboratory where follow-up research can be done. It will be possible in this lab to test a total ‘smart power system’, inclusive smart control, billing and other ICT. The influence of other distributed generators will also be tested in this lab.

Further, there are plans in the Netherlands to conduct a test in a real area with real customers. In close co-operation with the grid companies, 250 micro CHP units will be installed in houses in one neighbourhood so they will be connected to one MV-LV transformer. In this real-life situation, the micro CHP units will be used by ‘real people’ and their effect on the grid will be the most realistic.

The issues described so far all concern the possible problems in the grids; however, micro CHP can also support the electricity network. A precondition for this is that generation and the grid will be tuned to each other. This is difficult with the present energy business in the Netherlands because the grid companies are just facilitators and have no influence on the market and the production of energy. Therefore, a new way of thinking is necessary to see all the possibilities.

Micro CHP, when introduced in a controlled and proper way, will give the following advantages:

  • avoid large grid investments or replacements (e.g. cables, transformers) when the grid components have reached the end of their lifetime of 40-50 years (the Dutch grids are on average about 40 years old)
  • increase the security of supply
  • prevent power quality and voltage problems
  • reduce energy losses in the grid.

In short, micro CHP will deliver a lot of opportunities to society. There are some challenges, but the possibilities seem endless.

Martijn Bongaerts is a consultant on smart grids with Continuon Netbeheer nv, Arnham, the Netherlands.
e-mail: martijn.bongaerts@continuon.nl

Smart Power Foundation

The Smart Power Foundation (SPF) was founded in the first half of 2006 by the producers of micro CHP units – Vaillant, Remeha, Nefit/Bosch, Enatech and Microgen – with support from GasTerra.

SPF will focus on the communication and technical issues that arise with the development of micro CHP for the Dutch market. These issues include the fee for feeding electricity into the grid and conditions for grid connection.

Figure 1. Market expectation for micro CHP
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In addition, SPF has set a time scale for the micro CHP market in the Netherlands. Micro CHP will be presented on the Dutch market in 2008. However during the first five years such units will be too expensive and there will be a need for subsidy support. By 2013, the price will have come down, so consumers will recover the extra price paid for their units by having lower electricity bills. The expected number of micro CHP units entering Dutch households is shown in Figure 1.

Smart Power System (SPS)

Smart Power System is organized into four working groups.

Business cases

This working group investigates the benefits for the stakeholders of such a ‘smart power system’. These stakeholders can be electricity producers, retailers/suppliers and energy traders (of electricity and natural gas), installers, grid companies, manufacturers/suppliers of micro CHP units, and consumers/the society.

Administrative processes

This working group focuses on the administrative procedures that are necessary in a smart power system, which will require changes to billing compared with the present-day energy system.


A smart power system requires an increasing need and desire for control, measurement and intelligence. The exact way to implement this is not known yet, but one thing is certain: in order to reach optimized operation for large clusters of micro CHP units, the components of the cluster will have to co-operate. As for the high voltages (50 kV or higher) in current grids, the use of ICT will increase in the energy system.

The ICT group will set up specifications required based on the roles of micro CHP units defined by the other groups and will develop an overall architecture for the communication and computing requirements to attain an ‘optimal’ energy system. Furthermore, the group will play an important role in a number of field tests with an ever larger number of micro CHP units installed.


The infrastructure group focuses on the technical energy aspect of an SPS. With a lot of distributed generators in the grids, there will be a lot of new challenges to solve:

  • with the coming of micro CHP, the natural gas grid and the electricity grid will influence each other based on the user profiles
  • distributed generators will lead to a two-way traffic on the electricity grid instead of the one-way as we are used to have.

The possible problems will be investigated. Where energy technical solutions are possible they will be studied also, or they have to be solved by the ICT group.

Distributed generators are also able to support the grids when they are tuned. So this working group is also studying the potential changes.

The 11 participants in SPS are: Continuon Netbeheer, ECN, Eneco Netbeheer, Essent Netwerk, Gasterra, Gasunie Engineering & Technology, ICT Automatisering, Kema, NOM, TietoEnator, and TNO.

ENOS-T: optimizing electricity production in the household

A number of experiments are taking place within Smart Power System to gain knowledge of distributed generation. One of these is the ENOS-T project. The project executes a field test in which five micro CHP units in households are centrally controlled. The project is a joint initiative of GasTerra, Gasunie, Nuon, Honeywell, Energie Convenant Groningen, Gaia Power and ICT.


This project aims to investigate the effect of economically optimizing electricity production using micro CHP. A stand-alone domestic micro CHP unit delivers electricity as a ‘waste product’ during heat production. Electricity is generated regardless of whether there is a domestic demand for electricity. If there is no demand, then electricity can be delivered back to the grid. The ENOS-T project assumes a service provider is willing to pay the market price for this electricity.

Figure 2. Schematic of the ENOS-T project
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In this project, electricity and heat production are decoupled to a certain extent by using heat storage. In this way electricity can be generated when there is no direct heat demand from the household. During electricity production, the heat is stored for later use. An optimizing algorithm by Gaia Power is used to optimize the heat and electricity production.


Five households are each supplied with a controller to operate the micro CHP unit and peripheral sub-systems. (see Figure 2) A central computer running the optimizing algorithm monitors the households and sends incentives for electricity and heat production to the controllers by means of a GPRS (general packet radio service) connection. The set-up is currently being tested in the laboratory. The field test will take place in 2007.

First trial

ECN and Gasunie are performing a virtual power plant field test. The experiment uses 10 micro CHP units at consumer premises (see Figure 3). The virtual power plant can provide value though electricity trading or local grid operation support. The field test will focus on grid-support services, although electricity trading will be investigated in additional to simulation studies. The power plant has been in operation since February 2006. The 10 micro CHP units are each equipped with a specialized controller, which includes a communications module for the exchange of data and control signals with a central server.

Figure 3. Schematic of the first SPS trial – virtual power plant (VPP) field test, an operation of 10 clustered micro CHP units for grid support and trading
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The ECN-developed PowerMatcher control method forms the core of the system being tested. The PowerMatcher method is an intelligent software concept for controlling clusters of distributed generators as one single system. Through so-called ‘supply-and-demand matching’, it provides optimal mutual tuning of supply and demand within the device cluster.

Figure 4. VPP and substation load profiles versus established market prices
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Figure 4 shows the behaviour of the virtual power plant during a summer day. The day starts with a typical peak in total demand due to residents waking up. Immediately the price rises to its ceiling value and the micro CHP units are triggered to switch on (based on tap water heating; no space heating will be required in summer). After a short period several boilers are filled and some of the micro CHP units are switched off again. The peak reduction in the example is in the order of 15%-20%. Note that in the case of the field test, shifting the period when micro CHP is used is different from the simulation case, in which the PowerMatcher controls consumer installations as well.

In the afternoon the increase in substation load is completely taken care of by an increase in micro CHP power supply. The market prices are near the maximum. During the day the market prices drop to a minimum level several times. This is because while tap water heating is needed, there is no need for electricity; as the heating will be supplied by micro CHP, there will be no market incentive from the substation, so market prices will drop.

Note that during the winter, when the micro CHP units are also producing heat for space heating, different patterns will arise.

Paddock trial

The ‘paddock trial’ aims to simulate a real Dutch low-voltage grid for 48 households. Here, a model electricity grid is built in a testing hall. This grid is fed by a 75 kVA transformer with two outgoing low-voltage (400 V) cables with a total length of 400 metres. This transformer is connected to the public medium-voltage (MV) grid.

Forty-eight micro CHP units are installed in the hall. Every connection to the grid is made with a 10-metre connection cable (as is usually done in real households). Each connection to a micro CHP unit has a distance of 7 metres, which is the distance between two houses in a regular residential area in the Netherlands. The capacity of the transformer (75 kVA) is chosen to have a substantial load when all the micro CHP units (1 kWe each) are turned on.

All the 48 micro CHP units run on natural gas and the heat is led away. The units will be switched on and off as specified in advance. The electricity generated and the gas used are measured by the micro CHP units themselves. In addition, four advanced power quality meters placed in the grid can record all power quality aspects. A short circuit test will also be done and the reactions of the micro CHP units will be recorded.

The paddock trial being installed
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This field test is running from the second half of November 2006 to March 2007. The results will be first presented at the Transmission & Distribution Europe conference in March 2007 in Prague.

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