Ingenieur Vol. 75 ingenieur July 2018-FA | Page 52

INGENIEUR
periods). It is estimated that by 2025, grid-storage
BESS could have a moderate economic impact of
US$45 billion to US$70 billion annually, principally
from frequency regulation and peak load shifting
applications.
Frequency Regulation
When generation and demand are out of balance,
the system frequency deviates from its 50Hz set
point. Significant demand increases cause system
frequency to drop and voltage to sag. Similarly,
frequency increases are caused by loss of demand.
Conventional power plants such as gas or coal-fired
provide their own frequency regulation – a constant
flow - by setting aside a portion of generating
capacity (typically 1 to 4%) that can be ramped up
to regulate frequency. By committing to reserve a
portion of capacity in this way, utilities limit their
output, losing some production efficiency.
Today, BESS are already competitive in the
frequency regulation market where they are
permitted by regulations which require reserve
generating capacity to fulfil this role. BESS will
become more competitive as prices decline. In
this context, the potential economic impact of
energy storage on frequency regulation for utilities
worldwide can run into billions of dollars annually,
assuming that BESS could replace all of the 4%
of generation capacity set aside for frequency
regulation by conventional plants.
Peak Load Shifting
To meet peak demand (when generation prices
are highest), utilities can either build excess
generation capacity or purchase electricity from
other utilities or from specialised peak plant
suppliers. Energy storage could save costs by
enabling utilities to avoid purchasing electricity at
peak prices, instead buying (or generating) it when
it is least expensive, regardless of when it will be
used. The ability to store energy for use at a later
time is also useful for integrating energy from solar
photovoltaic generation into the electricity supply
grid, due to the variable nature of this resource.
Implications
BESS solution providers need to gain the support
of utility company leaders to plan and commit
BESS for grid utility applications as utilities tend to
invest in 10-year development plan programmes.
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They also need to demonstrate that BESS work
seamlessly with existing grid infrastructure and
renewable solar photovoltaic systems, potentially
requiring partnerships with companies with
core competencies in software, process control
systems, and grid integration. To get utilities to
be comfortable with newer BESS technology,
companies may also want to consider co-investing
in initial pilot projects.
Utilities face both risks and opportunities due
to advanced battery energy storage. While energy
storage may help improve the quality, reliability
and efficiency of their electricity supply, other
uses could affect overall demand as in the case
of accelerated adoption of electric and hybrid
vehicles. Peak load demand could grow quite
substantially if charging is unconstrained (that is,
if most drivers come home after work and charge
their vehicles when demand is highest). This could
place new strain on peaking generation capacity,
requiring new investment.
Future policies or regulations on energy and
electricity supply should include impact studies
on energy storage technologies to determine
whether there are incentives or disincentives for
investment in grid storage and other relevant
applications. The overall goal should be to ensure
that energy storage is permitted to compete
on an equal footing with other solutions. For
example, grid-storage BESS should be allowed to
compete with generation for frequency regulation
and with peaking plants for peak load electricity
supply. Introduction of renewable variable energy
generation quotas (solar photovoltaics) could also
promote investment in energy storage.
It is envisaged that by 2025, the potential of
energy storage for grid applications could become
much more clearly defined in terms of advances
in battery storage technology and cost. And,
this market development will have longer-term
potential (beyond 2025) to disrupt electricity
generation and distribution.
It is possible to envision a post-2025 scenario
in which renewable solar photovoltaic generation,
combined with cheap battery energy storage,
and higher energy prices of conventional fossil-
fuels for electricity production, could eventually
lead to significantly increased adoption of locally-
distributed solar photovoltaic power generation.
Eventually, this could vastly alter the utility industry