Smarter Grid Solutions
Follow Smarter Grid Solutions

Energy storage – making the most of the opportunity.

Blog post   •   May 09, 2018 14:19 BST

This article is written by Dr. Rachael Taljaard, Technical Consultant with Smarter Grid Solutions. 


The energy landscape is changing fast.

The energy landscape, never mind the introduction of energy storage, has changed drastically over the past decade and it is continuing to change at an alarming rate. The move from centralised to distributed generation has led to saturation in parts of the electricity network, which in turn has led to innovation. Innovation in the way networks are planned and operated, and in the way Distributed Energy Resources (DER) are connected. Energy storage is just the next step in this evolutionary process.

The advent of grid-scale energy storage is helping to revolutionise the network – this time by way of market innovation. For energy storage to be bankable for developers, and for the network to feel the full benefit, it has to be monetised. There must be services for it to participate in and a market for it to operate in. There must be the opportunity for multiple revenue streams to be stacked in order for the development to be economically feasible and, although prices have been dropping, a grid-scale battery is still expensive and there must have some way of making a return on investment.

What is it that makes energy storage an attractive option in the network?

Is it the local, on-site, behind the meter opportunities? Is it the wider distribution and system operator opportunities? Energy storage is a flexible asset that can assist in various ways. For a developer facing grid constraints, it can help to reduce curtailment. For a generator, it can help to optimise site export. For a network operator, it can help with constraint relief, local balancing, and reactive power support. For the system operator (SO) it can help with frequency response and reserve services.

In New York GI Energy and ConEdison are working together to revolutionise the opportunities available to energy storage and enable the stacking of revenue streams. Four grid-scale batteries (4 MW/4 MWh) are being deployed in order to provide ConEdison, with priority access to energy storage services during peak load periods. In order to enable the battery developments to be bankable, at times when the utility does not require services, the batteries will participate in the NYISO wholesale market. The stacking of revenue streams in this project is achieved via the SGS Active Network Management (ANM) platform which provides optimisation for the batteries, and links in to the utility and market to ensure all service requirements are met. This is just one example showing how energy storage can interact with other network stakeholders, and a significant benefit from this project is the $1 billion saved by avoiding the construction of an additional substation. This is a model that other utilities can learn from in a bid to encourage more efficiency network development and spending.

Assisting the SO.

The services that energy storage can tap into don’t stop at distribution level. The SO procures ancillary services to ensure they can keep the grid balanced and operating safely and efficiently. One system that has been experiencing operational difficulties in recent times is in Australia. Australia has four times more rooftop PV than any other country, has a low inertia system, and is lacking in reserve. This means it is a network that is vulnerable to sudden changes in demand or generation – for example, cloud cover can significantly reduce the output from PV so quickly that even if reserve is available it cannot respond fast enough. Likewise, a sudden drop in output from one of the conventional generators can have the same impact. Energy storage has been helping to combat this problem. Tesla has installed a 100 MW/129 MWh lithium-ion battery in South Australia, and it has already been responding within seconds to power outages and avoiding blackouts. This capacity of the battery is split with 70 MW contracted by the South Australian government for grid stability services, and it provides energy storage for 10 minutes. The remaining 30 MW can provide 3-4 hours of energy storage and participates in the competitive market. It is also capable of participating in the Frequency Control ancillary service market.

This is an excellent example of large capacity energy storage participating in different services and stacking revenue streams, however, a battery of this size is not without significant cost. In the case of Australia, the benefits (avoiding blackouts for thousands of customers) are worth the cost involved investing in large energy storage. What remains to be seen is the impact that aggregated residential storage can have on system stability and resiliency.

What enables the connection and participation of energy storage?

The benefits of energy storage can clearly be seen from the examples discussed, but in order to fully realise the benefits the right sort of control system is required. Storage must be able to respond in near real-time to system outages and events, and if multiple storage devices are being used, coordination and monitoring is essential.

The development of the storage market is creating new opportunities for developers to participate in different services which can only help to improve the overall operation of the grid. Making the most of these opportunities create a requirement for more sophisticated storage management capabilities, and most importantly, coordination. Coordination between energy storage devices, between system stakeholders, and with the available markets. To achieve this a flexible and extendable real-time control platform is required.

Ultimately the energy storage market is still developing and yet to mature, but innovative projects and opportunities are helping to outline what is needed to make energy storage successful. The kind of monitoring and control required for successful coordination lends itself to the developments required to facilitate market interaction. These developments will result in the successful integration and operation of energy storage in networks, participating in multiple services for multiple stakeholders. 

Find out more at Utility Week Live & edie Live

Our Executive Director, Graham Ault, will be joining a panel of experts on 22 May at edie Live to talk about Unlocking the Power of Energy Storage. Find out more and book your ticket to gain access to Graham's talk and hear more about our experience in the UK and North American markets. 

We will also be in the exhibition hall at stand J40 with demonstrations of products and their latest enhancements to help you maximise your revenue and optimise your energy assets.

Find out more about our presence at the conference here »