What is an aggregator?

THE AGGREGATOR'S FUNCTION
Since trades in electricity markets most often involve greater capacities than, for example, a single household can offer, there is a need to pool capacity from flexible units. For example, owners of electric cars or a local community could pool their capacity using a so-called aggregator.

The aggregator's function is to pool electricity supply and/or demand and sell this capacity in the electricity markets. An aggregator's capacity could be, for example, 1000 electric vehicles or 200 household heat pumps. The aggregator works by spotting when the price of electricity is high and then disconnecting the unnecessary demand of the consumers in his portfolio or similarly increasing their demand when electricity prices are low. We call this downward or upward regulation of demand.



THE CONSUMER'S PERSPECTIVE
Aggregating demand makes sense to consumers, since it allows them to save money on their electricity bills by being flexible. At the same time, consumers are helping the system to stay green - this also benefits consumers because it allows us to maintain the security of supply that characterises the Danish electricity system.

Demand-side response is not reserved for private households or electric vehicle owners - on the contrary. It may be a municipality that moves the water treatment programme at swimming pools to a time with generation surplus in the system - or a cold store where products are frozen at such low levels that it is possible to reduce the demand for cooling, when the demand for electricity exceeds the supply. In that way, demand-side response also helps to balance electricity market forces and keep prices low.