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28 Feb 2023
Wendel Hortop

Energy Storage Summit 2023: five insights you might have missed

The UK’s Energy Storage Summit happened last week, bringing much of the battery energy storage industry to London. We chatted, we danced, and we handed out an insane amount of socks!

Team Modo enjoying the Energy Storage Summit.

We also attended loads of super insightful presentations and panel discussions. So, what were some key insights from the Summit?

Neil talks you through the main talking points.

(If you missed Quentin’s presentation at the Energy Storage Summit, don’t worry! We’ll share the headlines and charts very soon.)

1. European markets: picking up steam

Great Britain’s battery energy storage landscape is mature compared to European markets. However, Europe is catching up.

What’s the context?

The Ukraine war and gas crisis have created significant global concerns about energy security - particularly in Europe. The EU has significantly accelerated its deployment of renewable capacity. Some of that new funding can incentivize new battery projects.

Three factors make a country attractive to investment in standalone battery storage:

  • Market fundamentals (e.g., the renewable capacity mix and size of the market).
  • Ease of connecting to the grid.
  • A regulatory framework that allows battery storage to participate in the country’s markets.

What’s happening?

How each country uses its recovery funds differs, leading to different responses and incentives. A few markets are becoming incredibly popular:

  • Italy was on the tip of everyone’s tongue.
  • Others mentioned a lot were Greece, Romania and Poland.

Even in countries that don’t necessarily tick the boxes above, storage deployment is progressing in other ways. Germany has seen increased installations of smaller, behind-the-meter battery systems - in people’s homes or businesses.

Source: pv-magazine.com

2. Longer-duration energy storage: pressure to do something is increasing

Many see longer-duration storage as a vital part of any future energy security toolkit - but there are still barriers to buildout.

What’s the context?

The past year has rocked confidence in the reliability of energy imports. There are fears over future imports of both fuel (such as gas) and electricity (across our increasing number of interconnectors). Some countries might even intervene to curtail interconnector exports to protect their security of supply.

GB was a net exporter of electricity for over half of 2022 - sparking fears over energy security.

So, could longer-duration energy storage be a means for the UK to achieve energy independence (alongside its increasing renewable capacity)?

What’s happening?

On the technology side, plenty. On the policy side, not enough.

Strategic targets are in place for both hydrogen and carbon capture and storage - two relatively unproven technologies with very real concerns over both commercial viability and efficiency.

Could longer-duration storage have a similar strategy? One suggestion is a market similar to the Capacity Market for long-duration storage, where assets would be paid to be available to the grid.

3. Battery storage-as-transmission

An interesting new use case for batteries.

What’s the context?

Battery energy storage can reduce the need for contingency in a transmission network. Batteries can also be built more cheaply (and more quickly) than adding new transmission capacity. Even an hour’s duration can give a system operator time to take alternative actions to reduce constraints.

What’s happening?

TransnetBW - the system operator in southwest Germany - will build, own and operate a 250 MW battery as dedicated transmission infrastructure. This is part of the Netzbooster (or “grid booster”) pilot scheme.

Fluence and TransnetBW are developing the 250 MW Netzbooster project. Credit: Fluence.

The requirements of this scheme do impact the necessary technical specs of the battery - which is being developed with Fluence:

  • The battery is targeted to achieve 99.99% availability - way above industry standards.
  • This requires contingencies in both the battery technology itself and the communications hardware.

If successful, this pilot could lead to larger projects in Germany or elsewhere.

Having regulated system operators who own battery storage assets does raise concerns about competition. In the UK, National Grid ESO aims to achieve similar results - but with privately-owned assets.

4. ESO and DNOs: a need to align on flexibility

Some Distributed Network Operators (DNOs) have markets for local flex - but takeup by battery energy storage has been slow.

What’s the context?

The need for flexibility in distributed energy networks managed by DNOs is growing. More renewables are seeking to connect - and the electrification of heating and transport is driving demand up. We’ve seen a rise in local flexibility services - run by DNOs.

But why has takeup been slow?

  • Most batteries already participate in national markets (such as frequency response).
  • Even batteries that could enter local services may not want to disrupt their current business cases.
  • Local requirements are generally on a smaller scale. If an area requires just 10 MW of flex, how do you convince a 50 MW battery to take part?

What’s happening?

The answer probably lies in the stacking of local and national services. But how to make this happen?

  1. DNOs must align their procurement timelines and auction timings with national services.
  2. DNOs and National Grid ESO must ensure that assets aren’t penalized for providing multiple services.
  3. Participation in local services needs to be made more accessible. The costs can be prohibitive for some of the smaller local flex contracts.

UK Power Networks and National Grid ESO have identified these problems, and are working together to find solutions.

5. Co-location: DC-coupling is still in the conversation

There were lots of discussions around DC-coupling.

An example of an AC-couple co-located solar and storage site vs. a DC-coupled site.

What’s the context?

DC-coupling is where there’s a single inverter for both generation and battery energy storage. This allows the battery to charge directly from the generator - and share a grid connection. (Read more about DC-coupling here.)

However, there’s still doubt over the feasibility of DC-coupled batteries being able to take part in frequency response services.

What’s happening?

In Hawaii, DC-coupled sites form a key part of the power system.

Tesla’s Kauai site - with 17 MW of peak solar capacity and 52 MWh of battery output. Credit: Tesla.

These have an oversized solar PV array (greater than the capacity of the grid connection), coupled with a multi-hour system (up to 8 hours) - to continue providing power when the sun sets.

The question is: can other countries prove the viability of DC-coupled battery energy storage for providing grid services?