Portuguese company Indie Energy develops and operates a virtual power plant (VPP) connecting producers and consumers with market participants such as balance responsible parties (BRPs), balancing service providers (BSPs), and collective self-consumption management entities. Its platform supports participation in energy communities, electricity markets, and system-balancing services.
pv magazine spoke with Indie Energy CEO Pedro Rodrigues about the company’s business model, battery storage economics, and plans for the Spanish market.
pv magazine: How many renewable energy projects does Indie Energy have in Portugal, and what is their total installed capacity?
Pedro Rodrigues: Our platform enables the management and optimization of energy buying and selling in energy communities, in the day-ahead and intraday electricity markets, as well as the provision of system services such as aFRR and mFRR. These assets represent more than 400 MW of installed capacity and 500 GWh of energy traded in the markets.
In energy communities, the platform is used by around 10 managing entities for the operational management of energy buying, selling and allocation across 50 collective self-consumption projects. These projects involve more than 250 consumers and 80 producers, representing more than 5 MW of installed capacity and more than 1 GWh of energy shared annually among members.
How is the war in the Strait of Hormuz affecting Indie Energy’s plans and projects, if at all?
We do not anticipate any impact on our operations or projects. On the contrary, Indie Energy’s value proposition is precisely to help producers and consumers find more stable and predictable solutions to deal with periods of greater uncertainty and volatility in electricity prices.
How are control algorithms for BESS being designed to account for capacity limits at connection points to Portugal’s national grid, particularly in regions with high solar penetration such as Alentejo?
Our algorithms incorporate the existing capacity limits at the connection point of the facility where the storage system is located. These limits are considered one of the main constraints in the optimization problem, along with factors such as the facility’s power balance, state of charge, number of cycles and battery degradation.
Decision variables, such as battery charging and discharging or the operating point of photovoltaic inverters, are determined while respecting the capacity limits. This makes it possible to reduce solar production or consumption curtailment by storing energy when there is excess production and shifting its delivery to more highly valued quarter-hour periods. This allows more efficient use of the grid capacity that has been allocated.
In Portugal’s capacity tenders, what are the ideal state-of-charge management strategies for meeting injection ramps without accelerating lithium-cell degradation?
The optimization algorithm incorporates constraints that take battery degradation into account based on information from the manufacturer. Our model manages the state of charge within operating bands and considers a maximum number of charge and discharge cycles, mitigating accelerated degradation. In addition, the degradation cost is estimated and incorporated into the model’s objective functions to determine the operating strategy, as well as any outages or limitations that need to be communicated to the Global System Manager.
Given Portugal’s substantial installed pumped-hydro capacity, including the Tâmega system, what technical frequency-stability challenges arise from coordinating hydropower dispatch with the ultrafast response of new BESS, particularly in terms of synthetic versus conventional inertia?
The technical challenges are being addressed through the dispatch project published by the Directorate-General for Energy and Geology (DGEG), which establishes the technical conditions and requirements for the connection and access to the Public Service Electricity Network (RESP) of standalone or co-located storage facilities. These requirements allow the Global System Manager and transmission system operators to require storage units to meet requirements such as secondary reserve (aFRR), tertiary reserve (mFRR), response to frequency variations, operation in Grid Forming (GFM) mode, provision of synthetic inertia, and observability and control capabilities.
In practice, storage systems must meet the applicable requirements according to the significance of each installation – types A, B, C or D – based on its power and connection characteristics. GFM requirements, including synthetic inertia, are intended to ensure that these systems behave similarly to a synchronous machine. The requirements are gradual and cumulative for higher-power or higher-voltage installations, ensuring that the growing integration of BESS complements the response of power generation facilities.
In the absence of a long-term capacity mechanism in the Iberian electricity market (MIBEL), what technical requirements must BESS meet to maximize profitability through revenue stacking in system services?
Batteries can provide different remunerated system services, such as upward and downward regulation reserves, contributing to the instantaneous balance between production and consumption. These services include aFRR, mFRR and participation in the resolution of technical constraints. They can also provide other services that are not yet remunerated in Portugal: frequency containment reserve (FCR), fast frequency response (FFR), synthetic inertia and voltage regulation.
Combining revenues from the electricity market and system services through revenue stacking enables projects to be economically sustainable. In aFRR, a very fast activation time is required: activation must begin in less than 30 seconds and be completed within a maximum of five minutes. For mFRR, activation must take place within 12.5 minutes.
Do you see a risk of arbitrage cannibalization due to the battery boom?
It is a real and expected risk. As more batteries enter the system, the spread between low-price hours, when there is excess solar generation, and high-price hours at the end of the day tends to narrow. The operation of the batteries themselves – charging during solar hours and discharging at the end of the day — reduces this differential.
This does not diminish the importance of storage. It means that profitability will increasingly depend on participating in multiple markets simultaneously. This includes system services, day-ahead and intraday markets, energy communities and self-consumption management. That is why optimization and software become more important as the sector matures.
Are you concerned about the risk of BESS technology becoming obsolete and its impact on capital expenditure, given that cells may need to be replaced after 10 to 12 years?
It is a risk that needs to be explicitly incorporated into business plans. Cell replacement after 10 to 12 years should be treated as scheduled capex. This means modeling the degradation curve and replacement cost against the expected evolution of cell prices, which have been falling.
New chemistries or higher energy density could make early replacement attractive if the retrofit generates benefits that offset the additional capex.
Does Indie Energy plan to enter or expand into the Spanish market?
In 2027, we intend to consolidate our presence in Portugal in electricity markets, system services and energy communities. There is also the possibility of offering our platform to electricity retailers, connecting producers, consumers and market participants on a single platform.
At the end of the first half of 2027, we will evaluate entering the Spanish market, given that we already participate in the Iberian market through OMIE.
Finally, is there any particular project planned for 2027 that you would like to highlight for pv magazine?
In 2027, we should have utility-scale and commercial and industrial (C&I) hybrid projects in operation that combine solar PV with battery storage. We are supporting customers in developing these projects so they can participate simultaneously in multiple markets: system services, the day-ahead and intraday markets, energy communities and electricity trading.
The development of this platform is being supported by the P2P Energy Trading project, funded by COMPETE 2030, which will conclude at the end of this year.
From pv magazine España
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