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Energy in transition series: Battery storage

In this article our intention is to briefly consider the role that battery storage can play as an enabler in the wider energy mix and indeed help us…

Many countries have already signed up to achieving net-zero carbon emissions, some binding, some simply targets. It will be interesting to see how the coronavirus impacts the move to net-zero. It may and probably should speed up the transition, but there is a risk that budgets for doing so will have disappeared in the short to medium term at least. Notwithstanding the impact of the coronavirus, how are we going to achieve net-zero carbon emissions? What are the key technologies needed to get us there?

The energy mix varies vastly by region and depends on a number of factors including the density of the population, the nature of the environment and whether it is heavy industrial, rural, heavy on infrastructure and transport and the availability of finite and infinite energy sources. However, aside from the technology being implemented, one key consideration is the ability to actually utilise that power as and when it is produced. This may sound obvious and rather simplistic, but for renewable power production there is limited flexibility as to when the power is available. For a solar project, it’s when the PV cells are able to utilise the sun’s rays. For wind turbines, they produce power when the wind blows. The timing of power production does not necessarily coincide with the demand side requirements and therefore some power is potentially wasted or not available when actually needed.

A technology that can more generally complement power production and the infrastructure surrounding power production and transmission is energy storage. There are many different types of energy storage. In this article our intention is to briefly consider the role that battery storage can play as an enabler in the wider energy mix and indeed help us work towards net-zero carbon emissions.

What is battery storage?

In really simple terms, it is as it sounds – electricity stored in a battery. That electricity can then be consumed at a time when it is required. There are numerous circumstances in which this can be useful at almost any scale of implementation including:

  • In some circumstances power stored in batteries can be put back onto the National Grid to assist with the management of wider demand for electricity, essentially being used as peak power plants.
  • It can be used in the Fast Frequency Response market. This essentially helps to maintain the grid and prevent damage to equipment by taking pressure off the grid where frequency is too high and discharging onto the grid where the frequency is too low.
  • Overall electricity cost of consumption can be reduced as batteries can potentially be charged up when electricity is cheaper and then utilised when power from the grid is expensive.

Recent trends

The coronavirus has created some problems when it comes to the management of the National Grid. Under normal circumstances the grid is constantly being monitored and managed to deal with rising and falling demand, maintenance and frequency requirements and updated to take account of new power sources and projects. One concern that perhaps was not previously near the top of the list of issues was the lack of use of the grid. We have had assurances from the electricity system operator, National Grid, that power supply will not be a concern throughout the coronavirus pandemic – we have enough power. That’s not the problem though, the problem is lack of demand. Factories, businesses and offices have largely closed down or significantly reduced output and usage of power. As a consequence, only limited power is required by those factories, businesses and offices, with a disproportionately smaller increase in use of domestic power as people work from home. Why do we care? The problem is that high supply and low demand can have a detrimental impact on the grid and increase frequency events. A good way of keeping power off the grid? Battery storage is certainly one.

We do not have to look far to find projects that underscore this. Across the Irish Sea, the Irish Single Electricity Market has been grappling with high supply for variable renewables as a percentage of demand for years – and currently leads Europe in the amount of wind it can sustain on the grid in real time – as high as 65% at times. With falling demand across Europe due to COVID-19 lockdowns, it follows that there will be an uptick in the amount of demand met by zero-marginal cost renewables.

Earlier this year, the Republic of Ireland brought online its first grid-scale battery to help ramp up efforts to tackle the ever increasing amounts of renewable energy on the grid – which will need to accommodate up to 95% renewables in order to meet legally binding 2030 targets. The 11MW project, supplied by energy storage technology company Fluence, forms part of a 34MW wind-storage hybrid at Kilathmoy, and owned by Statkraft. It lays claim to being the fastest responding battery project in the world, specifically engineered to respond in 150 milliseconds to a drop in frequency resulting in operating in a high wind – low demand environment that the grid operator, EirGrid, has calculated it needs to incentivise in order to keep the grid stable.

Putting this in context, this Fluence system is nearly 70 times faster than an equivalent battery delivering frequency response in Great Britain, and 2000 times faster than even the fastest acting of open cycle gas turbines starting up. Responding this fast can begin to correct a fall in frequency before it has finished its downward trajectory, potentially preventing load shedding or more severe measures a grid operator has at their disposal to avoid a system black-out caused by a supply and demand imbalance.

Another point worth speculating on is the potential economic impact of the coronavirus. It would be prudent to assume some level of slow-down in large-scale clean energy projects, at least during 2020, as organisations and individuals get to grips with the consequences of what is happening. Notwithstanding predictions for 2020 as impacted by a global pandemic, the European Association for Storage of Energy (Ease) had already reported a slow-down in large-scale schemes designed to store clean electricity. The Guardian reported recently that a study by consultants Delta-EE for Ease found that the European market grew by a total of 1GWh in 2019, a slowdown compared with 2018, when the energy market exceeded expectations to grow by 1.47GWh.

Barriers to success

  • Ironically the fast advancement of technology can lead to reluctance to roll out a 10 to 15 year project on technology that may be redundant or at least substantially underperforming within 6 to 10 years.
  • Grid infrastructure needs to be delivered and updated to allow for the commercial arrangements of widespread battery storage projects.
  • A relatively immature regulatory market for battery storage and concerns that attention may be diverted away from renewables towards addressing the global pandemic.
  • Supply chain concerns, primarily as a result of the global impact of the coronavirus.

However, there are some solid business opportunities arising from battery storage projects, both on a domestic level and in respect of large-scale projects. The EU’s clean energy package promotes the use of clean energy technologies and the general enthusiasm to get to net-zero is compelling.

Views from a global player

We have recently had the pleasure of talking to Marek Kubik from Fluence, a Siemens and AES company and a leading player in the energy storage market with nearly 2000 megawatts of projects operational or awarded globally. Fluence brings together the proven energy storage solutions and services that overcome the commercial and regulatory barriers that stand in the way of modernising energy networks.

“The global outlook for energy storage is very promising, with over 1000 gigawatts projected to be installed by 2040 by Bloomberg New Energy Finance,” said Kubik. “That’s an absolutely incredible growth rate over 20 years for an energy industry that hasn’t changed a great deal in the past 100.”

“Energy storage can solve a great deal of different challenges associated with secure, affordable and clean operation of power grids – whether that’s replacing dirty fossil fuel peaking capacity, making solar energy dispatchable on demand or solving transmission and distribution bottlenecks. In the UK, we are only just starting to scratch the surface of some of these capabilities, but what is clear is that energy storage has a critical role in all these areas in reaching net-zero.”

Conclusion

It is without doubt that these are exciting times for the global energy markets. There seems to be a genuine push to solve or at least address the energy crisis and move to net-zero carbon emissions. There is no simple answer and a balanced view needs to be taken. Energy storage and in particular battery storage has a major part to play in the energy mix. It offers true flexibility which can work alongside and complement existing and proposed new technologies.

Our third podcast of the 'energy in transition series', is out now. Watch the podcast.

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Jim Jordan is a partner at Weightmans with extensive experience working on domestic and international power transactions, primarily in the renewables sector.

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Jim Jordan
Partner, Weightmans
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jim.jordan@weightmans.com

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