Moving the electricity sector into a low-carbon future presents many challenges. As supply becomes increasingly intermittent, so the need for fast-responding, flexible demand and generation sources grows. Energy storage is a key source of flexibility to meet this need and has been identified by the UK Smart Grid Forum as a crucial intervention likely to be required for the future smart grid. Market players including electricity generators, suppliers, distribution network operators (DNOs), and the transmission system operator (TSO: National Grid in the UK) can all reap benefits.
However - in the European market at least - an optimal model of ownership and operation is yet to be determined or demonstrated at scale.
To tackle this issue and enable more adoption of storage, UK Power Networks - a DNO serving eight million customers in London, the South East and East of England - is constructing Europe's largest battery. Known as Smarter Network Storage (SNS) and sited forty miles north of London in Leighton Buzzard, the six megawatt, ten megawatt-hour project has been awarded 13m from the Low Carbon Network Fund (LCNF), administered by the UK energy regulator Ofgem. A further 6m is being put in by UK Power Networks and project partners AMTSybex, Kiwi Power, National Grid, Poyry Management Consulting, S&C Electric, Smartest Energy, Swanbarton, Imperial College London and Newcastle University.
From the perspective of a DNO the primary function of storage must be to support the local network. This essentially means that, as customer demand grows and a local substation begins to exceed its rated capacity, storage options must be set against conventional network reinforcement - running more cables from the grid supply point, with the associated transformers and switchgear. At our Leighton Buzzard site, demand is reaching the point where action must be taken: but with costs at their current level, battery storage cannot compete purely as support to the distribution network.
However what storage can offer that cables cannot is the ability to provide commercial services and generate income, for the hours of the day and months of the year that power demand is within local substation capacity. These services extend beyond the boundaries of the distribution network into the wider electricity system and it is this holistic approach to maximising revenue which distinguishes Smarter Network Storage from other LCNF battery projects.
Many of the commercial services are to the TSO. Early tests suggest SNS should be able to switch from idle to full power in under a second and with this uniquely fast response, battery systems are particularly useful as short-term operating reserve or dynamic frequency support - acting as load or generator depending which way the frequency errs. Other services include tolling (giving control of the system to a third party for several days at a time), arbitrage (buying electricity at low prices and selling high) and reactive power support.
Selling these services has the potential to make storage genuinely competitive on cost grounds, but performance hinges on there being an effective, smart method of prioritising behaviour. Currently the project is expected to offer ten or more distinct services, each with its own particular requirements for state-of-charge and power delivery. Prioritisation becomes more complicated because services are not all available all of the time and their respective values are not fixed.
To make sense of all these variables a novel software platform is being developed - the forecasting and optimisation system - and represents a major innovative element of the project. Taking inputs from Met Office weather forecasts, real-time and historical network loading, energy prices and contracted service details, the optimisation system runs through all available services and compares potential revenues, likely network demand and life-cycle impact on the batteries. At the end of the process a daily running schedule is produced specifying what the battery will be doing for the following 24 hours.
Predicting how much income can be expected is clearly fraught with uncertainty. What we consider to be conservative projections suggest 2m to 3m over ten years, against an installed cost close to 12m. While this revenue may sound modest, when taken with likely reduction in equipment prices and other system cost savings, it is enough to pull the total cost below that of conventional network reinforcement - the cables, transformers and switchgear mentioned above - for the site in question.
As well as answering technical and economic questions, SNS is examining challenges in the regulatory environment around storage. New technologies - or new applications of old technology - can expose gaps and idiosyncrasies in commercial and regulatory frameworks that act as barriers to large-scale uptake or have implications for income streams. In the electricity industry, economic viability is tied very heavily to regulations; getting the detail right will play a large part in how the system performs from the business perspective.
The future role of energy storage, its ownership and operational models, are yet to be precisely determined. SNS will give the UK electricity industry fundamental new information about the economic, technological and regulatory realities of large-scale storage. Whatever the financial return proves to be, the value of that information to us, other DNOs and the wider electricity industry will surely be vast.
Source: Energy Central
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