Trends and Comparisons in Utility-Scale Energy Storage

Germany aims to achieve significant greenhouse gas neutrality by 2045 as part of its long-term goal. Central to this ambition is the expansion of renewable energy (RE), an integral component of the country’s energy transition (Energiewende) strategy. By 2030, Germany plans for 80% of its electricity to be sourced from renewable sources (Source: ESG, 2022).

Energy storage will be essential in any electric grid heavily reliant on intermittent renewable sources, providing stability, adaptability, and reducing excess renewable energy. Currently, we are using synchronous generation in the short area, and this will change due to the face-out of conventional powerplants. Secondly, we are currently seeing a big boom in the short- to mid-term (seconds to daily flexibility) provided by short-term storage in the ancillary market. The next move will be to transition from long-term to seasonal storage, addressing energy and capacity and highlighting the worldwide relevance of these applications. If the share of RES is higher than 80%, seasonal storage becomes a must, as keeping thermal generators for backup is not economical anymore.

Nevertheless, such measures alone wouldn’t suffice to guarantee a reliable energy supply in this system. A year-long forecast, as opposed to a weekly one, reveals a different scenario due to the demand’s seasonal variations (refer to Figure 3). The high energy demand in winter due to heating and high solar energy production in summer and spring indicate the need for inter-seasonal (days to weeks) and seasonal (several months) energy storage movement. The wind energy production in spring is also in excess, which leads to a consistent energy shortfall in winter and a surplus in spring. Of course, these figures could be influenced by other developments, such as the addition of new nuclear or offshore wind capacities, which could offer additional, more reliable power in certain areas. Regardless, it’s clear that the obstacles associated with seasonal energy storage far exceed those of daily energy management.

Among the range of storage solutions, the need for storing energy over extended periods, particularly to meet seasonal and inter-seasonal demands, becomes more demanding. Currently, pumped hydropower storage stands as the sole technology with the capacity to store substantial amounts of energy over the span of several months. Nonetheless, its potential is not without limitations. Addressing the seasonal equilibrium of energy supply and demand through demand-response strategies is not feasible, as this approach typically involves altering demand over shorter durations, such as hours or days, rather than months. While the conversion of electricity to hydrogen or other gases is seen as a promising alternative, it remains uncertain if or when these technologies will become economically viable.

The utility-scale energy storage system plays a crucial role in ensuring grid stability due to its ability to respond rapidly caused by electricity network. To understand and distinguish different market trends, we first need to look into the fundamental flexibility needs of a power grid. In the following, the key use cases separated by time to delivery are illustrated and briefly explained: These services, regardless of the country and the regulation, are needed in any power grid.

Energy Storage Systems (ESS), operating within the domain of bulk energy services, presents two notable advantages. Firstly, it enhances flexibility by strategically storing surplus energy and subsequently releasing it during peak demand hours to take advantage of price discrepancies. Generally, the system is oversized due to the anticipated high peak demand, which leads to higher costs. Consequently, ESS serves as a valuable solution to address this issue, allowing for the provision of additional energy capacity during peak demand, thereby reducing the need for deploying high-capacity production systems.

Electric Supply Capacity: This is a service that is provided on the generation side of the grid with a power capacity ranging from one MW to hundred MW and a discharge duration of up to several hours, depending on the application and the market. Energy Storage Systems (ESS) for enhancing electric supply capacity are utilized by charging them during low-demand periods and discharging them when demand peaks, effectively reducing the highest demand levels across the system. This approach diminishes the reliance on costly conventional peak-time power plants and mitigates the inefficient operation at partial loads of these traditional power facilities. Utilities stand to gain through a reduced need to buy additional generation capacity in the wholesale market and through postponing or eliminating the necessity for investments in new peak-time power plants. Independent Power Producers (IPP) may also find financial benefits by offering their ESS capacities in the capacity market, provided such mechanisms are available in their countries.

Ancillary services refer to the support services essential for transmitting electricity from production sites to consumers or for maintaining its usability within the system. These services are primarily provided by generators or other service providers that are interconnected and capable of rapidly increasing output in three main categories: potential reserves, regulation, and flexibility.

Frequency Regulation: This function is designed to balance grid frequency. Traditional power plants may not be well-suited for this task due to the rapid fluctuations in power output that can cause significant wear and tear.

Voltage Support: Traditional voltage regulators such as on-load tap changers, step voltage regulators, and shunt capacitors may not effectively address voltage regulation requirements under fast and nonlinear dynamics. BESS can play a crucial role in mitigating major voltage fluctuations through its charge and discharge capabilities. Voltage support is particularly vital during peak hours, when power lines and transformers are heavily utilized. High energy and power density are essential attributes for effective voltage support applications.

Black Start: Large generators need an external power source to start up before supplying electricity to the grid. During system disruptions, a “black start” procedure is necessary, often using on-site power sources like diesel generators. On-site Battery Energy Storage Systems (BESS) can serve this function, removing the need for traditional black start generators and the associated costs of fuel consumption and greenhouse gas emissions. Additionally, on-site BESS can provide essential services during blackout failures, offering added benefits due to the rare occurrence of system outages.

Spinning and, Non-Spinning Reserves: These reserves guarantee system performance and availability in the event of unexpected production capacity disruptions. They consist of spinning storage, non-spinning storage, and supplementary storage. Spinning storage is directly linked and synchronized with the network, swiftly compensating for interruptions. Non-spinning storage operates independently and can be activated within 10 minutes, providing uninterrupted power for critical loads. Supplementary storage is available within an hour, serving as a backup for both spinning and non-rotating storage.

Battery Energy Storage Systems (BESS) have become essential for supporting grid operations and power transmission and distribution (T&D). These systems offer a flexible and efficient solution to tackle the challenges of modern electrical infrastructure. Their ability to store surplus energy and discharge it when needed is crucial for energy supply and demand management, significantly contributing to the stability and efficiency of modern power grids.

Transmission and Distribution Congestion Relief: During peak electricity demand, transmission lines often struggle to efficiently supply energy to all loads, causing congestion and higher costs. Strategically located Battery Energy Storage Systems (BESSs) help reduce congestion expenses by being placed downstream of densely populated transmission segments.

Transmission and Distribution Upgrade Deferrals: The electricity transmission and distribution infrastructure must accommodate peak demand, occurring only a few hours annually. With projected demand growth exceeding grid capacity, substantial investments are required for upgrades. Deploying Battery Energy Storage Systems (BESSs) offers a solution to defer or avoid new grid investments. BESSs store energy during low-demand periods and discharge it during peak hours, reducing congestion and optimising asset utilisation.

The power output of most renewable energy resources, especially wind and solar power, is inherently fluctuating. Battery Energy Storage Systems (BESS) have emerged as a groundbreaking technology, providing a flexible and efficient solution to tackle these challenges and facilitate the smooth integration of renewable energy resources. Energy storage systems are highly effective for firming renewable energy (RE) capacity due to their rapid response to fluctuations in generation. They can mitigate peaks by charging during high production periods and alleviate lows in generation by discharging. RE capacity firming can help to avoid the need for curtailing by buffering unexpected peaks in production.

Figure 8 categorises various applications and services related to energy storage systems into three main sectors: Generation, Network, and Consumption. ESS can be segmented into three categories: front-of-the-meter (FTM) utility-scale installations, typically exceeding ten megawatt-hours (MWh); behind-the-meter (BTM) commercial and industrial installations, typically ranging from 30 kilowatt-hours (kWh) to ten MWh; and BTM residential installations, typically below 30 kWh. The utility-scale energy storage system has applications on the generation and network sides, and the behind-the-meter energy storage system has use cases on the consumption side.

In conclusion, it is evident how the current landscape of energy storage is subjected to a lot of changes and exciting new possibilities are on the horizon.

The information presented is invaluable for stakeholders across the energy sector, including policymakers, industry experts, and researchers, as it provides a clear depiction of the current state and the anticipated trajectory of energy storage systems.