grid scale battery storage

Nowadays Indian Energy is working very hard on grid-scale battery storage as this is going to be the next biggest challenge in the Indian energy industry.
From big power plants in MW power generation to small solar solutions, everyone is looking for grid-scale battery storage.
We at Inverted Energy have decided to answer some of the basic questions about Grid-Scale Battery Storage via our blogs. So lets start learning.

What is grid-scale battery storage? 

A Grid Scale Battery storage is a technology that allows utilities and power system operators to store energy for later use. A battery energy storage system (BESS) is an electrochemical device that charges (or gathers) energy from the grid or a power plant and then discharges it when electricity or other grid services are required. Lithium-ion, lead-acid, redox flow and molten salt are among the battery chemistries available or under development for grid-scale applications (including sodium-based chemistries). Key technical properties of battery chemistries differ, and each battery has its own set of advantages and disadvantages.

Lithium-ion chemistries are now dominating the grid-scale battery storage market. Lithium-ion chemistries have seen a price drop of over 80% between 2010 and 2020, with technological advancements and increased manufacturing capacity, and prices are expected to continue to fall.

BESS has played an increasingly important role in the power system in recent years, thanks to rising demands for system flexibility and dramatic reductions in battery technology costs. More policymakers, regulators, and utilities are looking to adopt policies to jump-start BESS implementation as BESS prices continue to fall and the need for system flexibility grows with the deployment of wind and solar.

Is grid-scale battery storage needed for renewable energy integration? 

Battery storage can help the energy industry become more flexible. Interconnected power networks can safely and reliably integrate high quantities of renewable energy from variable renewable energy (VRE) sources without new energy storage resources, according to studies and real-world experience. To incorporate significant volumes of renewable energy, there is no rule of thumb for how much battery storage is required.

Instead, the amount of grid-scale battery storage required is determined by system-specific factors such as:

  • Analysis of all power generating sources
  • Flexibility in existing generation sources 
  • Interconnections with adjacent power systems 
  • The hourly, daily, and seasonal data of electricity demand 

What are the key characteristics of battery storage systems? 

Rated Capacity:
The total possible instantaneous discharge capability (in kilowatts [kW] or megawatts [MW]) of the BESS, or the greatest rate of discharge that the BESS can accomplish, beginning from a fully charged condition, is known as the rated power capacity.

Energy capacity:
The maximum quantity of stored energy (in kilowatt-hours [kWh] or megawatt-hours [MWh]) is referred to as energy capacity.

Storage Duration:
The amount of time storage may discharge at its full power capability before depleting its energy capacity is referred to as storage duration. A battery with 1 MW of power capacity and 4 MWh of useful energy capacity, for example, will have a four-hour storage duration.

Cycle Life:
The amount of time or cycles a battery storage system can provide regular charging and discharge before failure or severe degradation is measured in cycle life/lifetime.

Self Discharge:
Self-discharge happens when the battery’s stored charge (or energy) is decreased by internal chemical reactions, rather than being discharged to perform grid or customer work.

Self-discharge, measured as a percentage of charge lost over time, limits the amount of energy available for discharge and is a critical characteristic to consider in batteries designed for long-term use.

State of Charge:
The battery’s current level of charge is represented by the state of charge, which varies from entirely depleted to fully charged and is stated as a percentage. The ability of a battery to offer electricity or auxiliary services to the grid at any one time is influenced by its level of charge.

Round trip efficiency:
The ratio of the energy-charged to the battery to the energy released from the battery is known as round-trip efficiency, and it is expressed as a percentage. It might indicate the battery system’s entire DC-DC or AC-AC efficiency, including self-discharge and other electrical losses. Although battery manufacturers frequently mention DC-DC efficiency, utilities are more concerned with AC-AC efficiency because they only see the battery charging and discharging from the point of connecting to the AC power supply.

What services can batteries provide? 

Arbitrage entails charging the battery during low-cost peak hours and draining during higher-cost peak hours. This approach can be a source of money for the BESS operator by taking advantage of fluctuating electricity rates throughout the day. Reduced renewable energy curtailment is one application of the energy arbitrage service.

System operators and project developers want to use as much low-cost, emissions-free renewable energy generation as possible; however, limited flexibility of conventional generators and temporal mismatches between renewable energy supply and electricity demand may force renewable generators to reduce their output in systems with a growing share of VRE.

BESS can reduce renewable energy curtailment while also increasing the value of the energy developers can sell to the market by charging the battery with low-cost energy during periods of excess renewable generation and discharging during periods of high demand.

Load-leveling is an extension of arbitrage in power networks without electricity markets. To more efficiently coordinate the dispatch of generating resources, load-leveling allows system operators to charge batteries during periods of excess generation and discharge batteries during periods of excess demand.

Firm Capacity or Peaking Capacity:
System operators must guarantee that they have enough generation capacity to meet demand reliably during the highest demand periods of the year, known as peak demand. Typically, higher-cost generators, like gas plants, are utilized to meet this peak demand; however, depending on the form of the load curve, BESS can also be employed to assure appropriate peaking generation capacity.

While VRE resources can be employed to achieve this criterion, they are not recommended.

As a rule, resources do not entirely count toward a firm’s capacity.

generation is dependent on the availability of variable resources, which may or may not be available.

However, by combining VRE with BESS, system operators can improve VRE’s ability to contribute to firm capacity requirements. When VRE resources are combined with BESS, they can move their generation to coincide with peak demand, increasing capacity value and system reliability.

Firm capacity, capacity credit, and capacity value are key concepts to grasp when considering the utility-scale energy storage’s potential contribution to satisfying peak demand.

Firm Capacity (kW, MW): The amount of installed capacity that can be counted on to meet demand during peak or high-risk periods. The capacity credit of a generator is the proportion of firm capacity to total installed capacity ( percent ).

Capacity Value: The monetary value of a generator’s contribution to balancing supply and demand when generation is scarce (conventional, renewable, or storage).

Operating Reserves and Ancillary Services:
To keep the power system running smoothly, generation must always equal electrical demand. Operating reserves and auxiliary services come in a variety of forms and operate on varied timelines, ranging from sub-seconds to several hours, all of which are required to assure grid resilience.

BESS can charge or discharge in a fraction of a second, which makes them a good resource for short-term dependability services like Primary Frequency Response (PFR) and Regulation.

Longer-duration services, like load-following and ramping, can also be provided by appropriately sized BESS to guarantee supply matches demand.

Where should batteries be located in grid-scale battery storage?

Utility-scale BESS can be installed in a variety of places, including: 

1) Transmission network; 

2) Distribution network near load centers; and 

3) Alongside VRE generators.

The position of the BESS has a significant impact on the services that the system can deliver, and the ideal location for the BESS will be determined by its intended use case.

In the Transmission Network:
BESS can provide a wide range of auxiliary and transmission-related services when connected to the transmission system. These systems can be used to replace or defer peaking capacity investments, provide operating reserves to help adapt to changes in generation and demand, or defer transmission system upgrades in areas where load or generation growth is causing congestion. The design of a utility-scale storage system coupled at the transmission substation level.

In the Distribution Network Near Load Centers:
All of the services provided by transmission-sited storage can be provided by storage systems situated in the distribution network, as well as some services relating to congestion and power quality issues. Due to concerns about emissions or land use, it may be difficult to locate a conventional generator near load to offer peaking capacity in many places. BESS systems can be co-located near load with fewer siting issues than conventional generating due to their absence of local emissions and scalable nature. Storage near load can assist postpone transmission and distribution upgrades by reducing transmission and distribution losses and alleviating congestion.

Local power quality services and better resilience during extreme weather events can also be provided by distribution-level BESS systems.

Co-Located with VRE Generators:
Renewable energy sources located distant from load centers may necessitate transmission investments in order to get power to where it is required. The transmission capacity used to transport the power may be unused for large periods of the year due to the fluctuating nature of VRE resources.

By using storage to charge excess generation during periods of high resource availability and discharge excess generation during periods of low resource availability, a BESS can reduce the transmission capacity required to integrate these resources while increasing the utilization of the remaining capacity.

The same BESS can be utilized to reduce VRE generation curtailment caused by transmission congestion or a lack of sufficient demand, as well as provide a wide range of auxiliary services.

What is value-stacking? What are some examples of value-stacking opportunities and challenges?

By delivering numerous system services, BESS can optimize its value to the grid and project developers. Because some services are rarely used in a given hour or are rarely requested for, building a BESS to provide numerous services allows for higher overall battery utilization. Value-stacking is the term for this multi-purpose approach to BESS.

A BESS project, for example, can assist delay the need for new transmission by meeting a fraction of peak demand with stored energy during a few hours each year. When peak demand is not met, the BESS can generate revenue by offering transmission system operator operational reserve services.

Depending on the BESS design, some system services may be mutually exclusive. Even though a BESS is technically capable of providing numerous services, additional battery cycling may deteriorate the battery, reducing its lifetime and economic viability. Finally, because a BESS can only deliver a limited number of services before running out of power, batteries must prioritize which services they supply. 

How are BESS operators compensated?

BESS operators can be rewarded in a variety of methods, including through the wholesale energy market, bilateral contracts, or a cost-of-service mechanism directly from the utility. The BESS operator submits a bid for a specific service, such as operating reserves, to the market operator, who then arranges the valid offers in a least-cost manner and picks as many bids as necessary to meet the system’s demands in a wholesale energy market.

If the BESS operator’s bid is chosen and the service is provided by the BESS, the operator will be compensated at the market rate.

This procedure assures open pricing and technology-neutral evaluation; nonetheless, certain services, such as black start or transmission and distribution upgrade deferrals, are currently unavailable on the market. BESS operators can also enter into bilateral service contracts directly with energy users or businesses that procure energy for end-consumers. This method does not guarantee transparency, and contracts can differ significantly in terms of pricing and terms.

Finally, some BESS are directly owned by the utilities that they provide services to, such as upgrade deferrals. The utility pays the BESS operator at a preset price and recovers the payments through retail electricity rates in these cost-of-service scenarios. However, in some jurisdictions, BESS may be unable to collect money from both wholesale markets and cost-of-service agreements.

What are the key barriers to BESS deployment?

  • Regulatory Barriers

Lack of rules and regulations to clarify the role of BESS.

Although storage may be technically capable of providing important grid services, utilities and market operators may be hesitant to acquire services from BESS if no legislation or guidelines explicitly declare that storage may do so. Furthermore, without assurances that BESS project services would be reimbursed, storage developers and financial institutions may be hesitant to undertake the necessary capital investments.

The guidelines must, among other things, ensure that storage systems have open and equitable access to the market, taking into account their particular operating and technical characteristics.

Restrictions or lack of clarity around if and how storage can be used across generation, transmission, and distribution roles.

The wide range of services that storage may provide crosses numerous markets and compensation sources. Frequency regulation, for example, maybe reimbursed in a wholesale market, while transmission or distribution investment deferrals may be compensated by the utility or system operator as a cost of service. Providing services across several compensation sources is prohibited in some areas. Limiting the services that batteries can provide depending on where the service is provided or how it is compensated can have an impact on how frequently they are used and whether they remain a profitable investment.

  • Market Barriers:

Lack of markets for system services.

A lack of markets for services that batteries are ideally suited to supply can make it difficult for developers to consider them as prospective sources of revenue when putting together a business case, which can dissuade investment.

Furthermore, conventional generators’ price formation may have developed, implying that the existence of batteries in the market could distort prices, affecting both storage systems and conventional generators.

Data Analysis Capabilities

Battery storage systems are a new technology that carries a higher level of risk for investors than traditional generator investments. These dangers include technological elements of battery storage systems, which may be less well understood by stakeholders and change more quickly than other technologies, as well as prospective governmental changes that could affect battery deployment incentives. 

Many stakeholders may be ignorant of the full capabilities of storage, particularly the possibility of a BESS to provide numerous services at both the distribution and transmission levels, due to the relatively recent and restricted deployment of BESS.

Traditional utility analysis methodologies, on the other hand, may be insufficient to adequately capture the benefit of BESS. Production cost models, for example, are often based on an hourly resolution, which ignores the value of BESS’ fast-ramping capabilities. The lack of suitable tools and gaps in data and analytical skills can inhibit investment and prevent battery storage from being considered for services that can be delivered by more well-understood conventional generators.

Grid Scale Battery Storage is going to play a very important role in the Indian Energy Industry. 

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