The Electricity Storage Network’s (ESN) ‘Multi-vector, multi-market: where are the opportunities for energy storage?’ Spring Symposium, had a challenging task on its hands, to give a platform to stakeholders and market players involved in decarbonising heat and transport as well as electricity.
With such a broad agenda to cover in a day, an opener on the history of the industry and technology guide, while interesting, seemed a little at odds in a programme where most of those gathered were up to speed on energy storage. If you were new enough to the sector to need energy storage explaining, you may have struggled to grasp a potential new balancing services product based on sub-second inertial response, discussed in one presentation.
Patrick Clerens, secretary general of the European Association for Storage of Energy, gave an overview of power-to-gas (P2G) in the European context, which amounted to a high level review of regulations and policy. Europe’s biggest P2G market isn’t the UK, it is Germany. Like Germany, we use a lot of gas and we ought to support this sector more, and have some great companies working on fuel cell electrolyser technology.
From the outset ESN has worked closely with government, such as the Department for Business, Energy & Industrial Strategy (BEIS), and should be credited with bringing industry, government, regulators, the grid operator and regional utilities round the same table. One does wonder how much appetite there is for making our gas grid infrastructure greener, within a government that has shown considerable enthusiasm for fracking the dirty natural variety.
Clerens ended his presentation with findings from a project exploring the business case for P2G for short-term power trading in Switzerland, by the University of Saint Gallen, where the Swiss Parliament has recently decided that renewable methane qualifies as a CO2-free fuel.
Production of synthetic natural gas (SNG) is only profitable when power prices are low enough. So, if SNG is sold at the price of biogas, the modelling found that to realise an average electricity price of €23/MWh, prices up to €30MWh would be accepted on the day-ahead market with the P2G electrolyser running at 2100 hours a year. The study found that the electricity price on the day ahead market is still too high to provide a profitable model.
By referring to the Swiss project, Clerens’ presentation seemed to conclude P2G is not commercially viable. Worth considering is how technologies like P2G can address the problem of too much renewable generation, which costs rate payers in Germany nearly €1 billion annually, mainly in curtailment costs. In windy periods, without corresponding demand, electricity prices in Germany are pushed downwards into negative territory. Rather than curtail wind output, cheap electricity could be turned into clean SNG.
So it was good later on to hear about joined up approaches, in the context of a big project in north-east England that is looking into interdependencies between gas, heating, electricity and transport.
David Gill, director of stakeholder relations at Northern Gas Networks, presented on the Integrated Transport Electricity and Gas Research Laboratory (INTEGREL) project, which will culminate in a whole energy systems development and demonstration facility.
Northern Gas Networks’ partners include Northern Powergrid and Newcastle University.
The project site, near Gateshead, is a working gas site that was originally built in the 1960s for testing natural gas within systems ahead of replacing town gas.
The site is being repurposed over the next 15 months for the INTEGREL project. The key element in all of this is hydrogen, which can be produced as a clean fuel, converted into gas or liquid, or added to fuel cells to produce energy such as in a fuel cell powered electric car.
The site will host multiple generation, conversion and storage systems, which will be combined to test how they all work together.
A joint control room with sit over the electricity and the gas system and will allow trading between the two in real time, enabling development of new software and techniques needed to manage this interoperability between gas and electricity markets and networks, which has not been required in the past.
If the project is able to demonstrate how gas and electricity can be decarbonised in ways that complement each other, by converting surplus renewable generation, instead of curtailing it, into clean gas for example, then the findings could be widely applicable. Gateshead is an ideal test site as has capacity within the gas network, but it is also connected to a high voltage power supply. All it needs now is industry partners and businesses that could set up at the site and participate.
Thermal storage for excess renewables and nuclear generation
A future where nuclear energy and renewables happily co-exist is the dream of one academic. It all rests on high temperature thermal storage, which overcomes the problem of renewables generating too much electricity when there isn’t the demand, like the early hours of the morning and the middle of the day, as well as nuclear generation, which provides baseload, but cannot be turned up or down quickly.
Professor Philip Eames, from Loughborough University, has led the research and discussed some of it in his presentation.
At times of peak electricity demand, or lulls in renewables generation, a high temperature thermal store acts to provide additional electricity generation using turbines to produce power. The other benefit of large-scale centralised high temperature storage for electricity generation is that it allows thermal/nuclear plants to work more efficiently, at a continuous set optimum level, with excess high temperature heat being skimmed off and stored for conversion later.
According to Eames, efficiencies are high as electricity generated from the thermal store, fed by surplus renewables or nuclear generation, will be produced with similar efficiency to a thermal/nuclear plant. Just don’t let it hang around too long, to start cooling off.
Follow the money
During the day presentations from an energy lawyer and an energy consultant gave some insightful and contrasting, albeit subjective, perspectives about where interest in battery storage and more general forms of onsite generation is occurring.
Maria Connelly, a partner at TLT Solicitors, has advised on battery storage projects, including three of the eight projects that were successful in the enhanced frequency response (EFR) services tender in 2016. She’s been advising developers, investors and lenders across other projects since then, many with an energy storage flavour.
The projects coming across Connelly’s desk include renewables and storage co-location, usually sites where existing solar, wind or hydro power assets have a big enough grid connection for battery storage, so that these assets can be developed at lower cost.
The challenge is having a structure that doesn’t interfere with existing renewable energy asset’s subsidy payments, but it is a challenge that is entirely workable, according to Connelly.
Other types of projects registering high levels of interest are mixed technology proposals, especially solar PV-battery-electric vehicle (EV) charging. With ongoing reductions in costs of solar PV hardware and competition among installers, she also thinks an uptick in commercial solar rooftop projects, sometimes with batteries added, is on the cards.
Gavin McCormick, consulting director at Beond Group, has been tasked with recruiting larger C&I customers, including businesses with national operations, typically with an energy expenditure of £2-6 million (€2.2-8 million).
From his perspective, these days developing a business model for a behind the meter battery investment is tricky. Payback is often outside of six years and that’s just to long for an investment meant to achieve energy savings.
If a customer has not developed a battery project so far, according to McCormick his advice would be not to bother now.
Instead, among certain types of businesses McCormick’s seeing a swing towards standalone behind the meter solar PV installations, where the customer can self-consume the energy output for operations. He says gas or biomass combined heat and power (CHP) investments are also advisable, which can work particularly for operations where the heat by-product can be used.
Alex Gilbert from Amber Infrastructure discussed funding opportunities. His firm was appointed to manage the £112 million London Energy Efficiency Fund (LEEF), which was established by the Mayor of London as the first dedicated energy efficiency fund in the UK.
LEEF, which has now invested all its original capital, will be superseded by the new Mayor of London’s Energy Efficiency Fund (MEEF), where Amber is the preferred bidder. The £400 million fund, which will launch in the coming weeks, is procured by the Greater London Authority, like LEEF was, with potential support from the European Investment Bank.
MEEF will provide funding for energy storage and decentralised energy, as well as small scale renewables and energy efficiency projects in the capital. Amber’s own £50 million balance sheet fund can also provide equity funding for storage, EV charging infrastructure, solar and district heating.
A new power-intensive service evolves
Marek Kubik, market director at Fluence Energy, gave a presentation on another way batteries can keep grids in balance, especially when high levels of renewables are integrated. The company’s 10MW battery array at Kilroot power station in Northern Ireland has been injecting power at sub-second intervals into the grid to counter frequency deviations.
This battery activity has been studied by Queen’s University Belfast, which has found that a fractional amount of batteries can provide an equivalent inertial response to several gigawatts of combined cycle gas turbines, saving grids a lot of money. For those interested a 15-page report explains it all, which also includes a call for the UK’s balancing markets, currently undergoing revision and simplification, to value inertia in other products.
Other presentations on the day were given by representatives from the National Grid, BEIS and Western Power Distribution.
To learn more about the ESN and its activities and other events, go to www.electricitystoragenetwork.com