| Case study |
VPK Unlocks New Revenue Through Demand Response Services
It takes an expert duet of a heavy industry leader and its loyal energy aggregator to find which flexible process to monetize on the energy markets. This is how Veolia, through its Flexcity offer and VPK Paper did it!
Reduce the energy bill for heavy industry processes.
Valorized asset Services provided by Flexcity offer Start of the partnership |
Customer Challenge
VPK Group is a major Western European packaging company. Since 1935, it has been producing protective cardboard packaging for logistics. The paper division of VPK Group produces over 1 million tons of paper annually... exclusively made from 100% recycled paper. 530 000 tons are produced in Dendermonde, Belgium by VPK Paper.
Since 2015, Veolia through its Flexcity offer and VPK Paper have partnered to add flexibility services to the energy management strategy of VPK. Paper production is an energy-intensive industry. Indeed, producing paper involves heavy electrical machinery and large amounts of steam and heat which result in substantial electricity bills! As a heavy industrial in Europe, VPK Paper has to comply with stringent energy management constraints on Demand Response services. In-depth process optimization, state-of-the-art technologies and cogeneration of power and heat are key elements of this strategy.
To maximize the value of its CHP unit, VPK wanted to transform it from a static generator into a flexible, market-responsive asset. The goal: optimize operations for maximum economic return while maintaining reliable energy supply for continuous paper production. Using Veolia's advanced Demand Response (DR) services, VPK Paper has been valorizing its power on reserve markets and is now leveraging cross-market optimization strategies to unlock additional revenue streams.
Solution
From Static Support to Smart Optimization
Initially, the CHP unit participated exclusively in aFRR-down (automatic Frequency Restoration Reserve downward), providing grid balancing services to the Belgian transmission grid operator, Elia. Today, thanks to a new advanced operational algorithm implemented by Veolia's Flexcity offer, the CHP is optimized across multiple electricity markets, combining Day-Ahead (DA) with ancillary markets. This cross-market optimization approach enables asset-backed intraday trading, which will be implemented in a future stage.
The solution works by analyzing real-time market signals and grid conditions. When solar overproduction leads to low prices, VPK reduces CHP generation to offer upward reserve. During price peaks, it increases generation, optimizing returns. This cross-market strategy combines ancillary services with day-ahead arbitrage, helping VPK unlock value beyond what either approach could offer alone.
Veolia worked closely with VPK Paper as well as the supplier of the gas turbine CHP to securely connect the unit to the Flexcity Box, an advanced smart control device. Based on changing setpoints and market signals, this device modulates the gas turbine CHP's power output in real-time, respecting the operational limits of the gas turbine CHP as well as the paper production. The Flexcity Box runs a local algorithm to deliver both aFRR and Day-Ahead optimization services in a continuous, automatic, and decentralized way in line with the grid operator's specifications.
Implementing Cross-Market Optimization in the Cogeneration Process
Leveraging its expertise in industrial processes, Veolia, through its Flexcity offer, studied VPK Paper’s machinery as well as the constraints to secure the paper production.
It became clear that the gas turbine cogeneration of power and heat (CHP) was an ideal process to monetize.The gas turbine CHP on-site acts as the beating heart of the site, running mainly at full load, while providing both electricity and heat for the various processes.
In addition to producing electricity, the gas turbine CHP can be used to support the electrical grid by reacting to grid imbalances within a few minutes. Furthermore, some paper machines can be stopped to reduce the stress on the electricity grid when planned in advance.
Arnout Aertgeerts |
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The benefits of implementing this advanced DR service with Veolia's Flexcity offer are:
- Easy, secure, and seamless setup...
- Generate revenue in multiple markets by combining Day-Ahead and ancillary service markets from day 1
- Lower heat production costs by adapting CHP output to market signals — estimated reduction of more than 30%
- Increase revenue through cross-market optimization that unlocks value beyond single-market approaches
- Secure reliable paper production backed by automated controls that respect operational constraints
- Contribute to electricity grid balancing, security of electricity supply, and reduction in CO2 emissions while supporting grid stability in Belgium with flexible capacity
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Benefits
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Working with Veolia
Our Flexcity offer helps energy-intensive companies turn existing infrastructure into new value - optimizing flexible capacity across ancillary services, imbalance markets, and more. Whether you're in industry, agriculture, or logistics, we make flexibility work without complexity.
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