VPK Group is a major packaging company based in Western Europe, producing over 1 million tons of paper annually using 100% recycled materials. At its Dendermonde site in Belgium, VPK Paper operates a Combined Heat and Power (CHP) unit that supplies its energy-intensive process.
To maximise 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.
What is the scope of your flexibility project in terms of assets or processes?
The flexibility strategy centers on VPK’s on-site CHP unit, which supplies both electricity and heat for paper production. Initially, the 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 Flexcity, their chosen flexibility solution provider,
the CHP is optimised 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. Additionally, selected paper machines were also considered for capacity-based demand response.
Cogeneration
How did you go about implementing the project and delivering the expected flexibility?
The solution provider analysed the technical constraints of the CHP along with VPK's production requirements. Working closely with VPK and the CHP supplier, they installed a secure local controller enabling automated, real-time modulation of the CHP’s output based on market and grid signals.
Originally optimized for aFRR-down, the CHP now also adjusts output in response to Day-Ahead price fluctuations. 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 to unlock value beyond what either approach could offer alone — all while maintaining process reliability and CO2 impact control.
Looking back, how did the implementation go? Did you reach the expected results?
The implementation delivered strong results from the start. The setup was seamless and required no operational intervention. Over time, VPK’s strategy evolved from static grid support to smart, data-driven CHP optimization across multiple markets.
Today, this allows VPK to:
- Lower the cost of heat production by adapting to market signals
- Increase revenue by combining Day-Ahead and ancillary service markets
- Secure reliable paper production, backed by automated controls
- Support grid stability in Belgium with flexible capacity
Thanks to our partnership with Flexcity and our CHP supplier, we deliver the aFRR service fully automated without any need for intervention from our site operators, declares Johan Dhaese, Group energy & Environment Manager, VPK Group
More than 30%
Estimated reduction in heat production costs enabled by cross-market optimization of CHP flexibility.
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