Lappeenranta to become one of the first cities in the world to operate a virtual power plant

Lappeenranta to become one of the first cities in the world to operate a virtual power plant – Siemens enables properties to join the electricity balancing market

Siemens Oy is supplying a virtual power plant service for properties to the City of Lappeenranta.  Lappeenranta is one of the first cities in the world to utilise the potential of flexible consumption on this scale.  The service will initially be offered at nine properties.  In addition, the agreement includes 50 properties as an option. 

The virtual power plant service will reduce the city’s environmental impact and increase revenues, says Development Manager Markku Mäki-Hokkonen from the City of Lappeenranta.

− From the city’s point of view, it is a good development that, in addition to facility rental, revenues can also be generated by offering flexible capacity in the electricity market.  This allows a whole new kind of benefit to be gained from energy efficiency investments. 

With the virtual power plant service supplied by Siemens, electricity consumption will automatically be increased or decreased at the properties of the City of Lappeenranta to balance the grid. The transmission system operator Fingrid pays compensation for providing flexibility. 

Virtual power plants increase the flexibility of the electricity market and reduce the impact on the environment, says Ville Stenius, Head of Business Line at Siemens Oy.

− As renewable energy increases, balancing the grid requires either sufficient balancing power or flexibility in consumption.  Flexible consumption is a more environmentally friendly option as balancing power is usually produced by fossil fuels. In addition, maintaining balancing power is costly for society.  Siemens is responsible for technical solutions and controlling the consumption of the Lappeenranta properties participating in the balancing market.

From the point of view of the property owner, profitability is excellent at the current reserve market prices, Mäki-Hokkonen emphasises.

− Lappeenranta pays Siemens a fixed service fee and Siemens credits the actual earnings as income to Lappeenranta. In connection with the introduction of the service, investments will be made at the properties in, for example, equipment, IT and sensor technology.

Lappeenranta’s building stock suitable for virtual power plant

For the provision of the virtual power plant service, the participating properties of the City of Lappeenranta will be connected to the same Siemens energy management platform.  In the first phase, the virtual power plant service will be supplied to nine properties of the City of Lappeenranta.  The aim is to also add 50 other properties to the service later. 

− We are not aware of any other city in Finland or elsewhere that would have started utilising the potential of the electricity market on this scale.  Lappeenranta’s building stock is well-suited for a virtual power plant as the properties are far along in terms of their degree of readiness thanks to systematic development.  This provides good opportunities to also develop other digital services for the city in the future. This is one step in the development of a smart society and a green energy system, says Stenius.

− In addition to the virtual power plant service, the city is interested in other benefits enabled by the service. These include peak power management and the use of electricity storage, such as electric car batteries and the electricity-to-heat accumulator under construction.  We also want to be an active partner for the companies in the area in the energy transition, says Mäki-Hokkonen.

Further details:

City of Lappeenranta

Markku Mäki-Hokkonen, Development Manager
tel. +358 40 569 5515, markku.maki-hokkonen(at)lappeenranta.fi

Siemens Oy

Ville Stenius, Head of Business Line
tel. +358 50 469 5258, ville.stenius​(at)siemens.com