The UK needs to invest 110 billion in modernising its electricity infrastructure over the next decade. In order to make the necessary replacements and upgrades, Ofgem is assessing a range of new technology investments that will decarbonise the system; whist ensuring security of supply and a future smart grid.
Electricity storage and Demand-Side Response (DSR) are two of the key technologies that are undergoing trials and early adoption. Both will play a major role in balancing the grid; storage for capturing and storing wrong time renewable energy generation, and DSR for its ability to dynamically manage demand utilisation and divert unused capacity back to where its needed. Currently, the majority of grid balancing is supplied by switching on expensive coal-fired peaking power stations to increase supply. National Grids reliance on peaking power providers costs between 15-20/MWh or 0.7m-5m/MW. Energy storage and Demand Side Response can both increase the amount of renewable power brought onto the grid and its utilisation within it, but how do they match up in terms of cost and reliability?
The government has recognised that both demand-side response and energy storage, have different characteristics from generation and have designed the capacity market to ensure that demand reduction and storage can participate effectively by running capacity auctions ahead of when capacity is expected to be required. In setting the Capacity Market Auction Guidelines, National Grid has prescribed the reliability for each balancing technology class available. With a rating of 89.7 percent Demand Response is ranked as more reliable than Combined Cycle Gas Turbines (CCGT), coal, hydro, oil or nuclear power. However, energy storage comes out even higher as the most reliable technology class, with 97.38 percent reliability. That means that if a Demand Side Response aggregator formed a 10MW virtual power station formed of the capacity of heavy energy users, National Grid could rely on 8.9MW being available, whereas they would expect a 10MW energy storage installation to make 9.7MW available.
The difference may sound marginal, but with National Grid facing new levels of urgency to protect the grid from brown or blackouts, every MWh may end up counting. For example, the capacity margin is predicted to fall to around 2% by 2015/16, i.e. 2,133 MW. The additional capacity possible from storage comes at a cost, of course. Battery systems are estimated to cost between 0.5m-1.8m/MW, whereas a no build balancing solution, like firm frequency response costs between 0.05-0.15m/MW.
From a low carbon perspective, energy storage is vital to solving the problem of renewable intermittency by absorbing surplus power and releasing it when needed. This function simultaneously helps the grid to securely balance capacity and supply and protects the grid from stress events (e.g. power outages) on the grid. Furthermore, the introduction of energy storage in substations can decrease the need and cost of traditional reinforcement, such as transformers and cabling. For example, at Europes largest battery storage trial, a 6MW/10MWh battery storage project, currently being installed by S&C Electric Europe Ltd., is expected to save UK Power Networks approximately 6m over 15 years over traditional reinforcement methods. Once proven, the replication of the method across all UK network operators could conservatively provide savings of more than 700 million by 2040 compared to business-as-usual approaches.
Conversely, one of the most interesting aspects of the Demand-Side Response is its ability to use the power of the internet to engage heavy energy users in aggregating their equipment, from fridges to furnaces, in order to free up unused capacity, which can be redirected to balance the grid. By tweaking the flow of power to machinery, DSR is able to alleviate grid stresses, saving money for National Grid and generating revenues for businesses that provide that service. Indeed, in the UK, the grid is only used 60% of the time, so increasing utilisation is a cost effective balancing method. However, DSR depends on companies having surplus capacity. In some areas where capacity is not available, energy storage could be added to alleviate the pressure. If you compare the constant flow of energy on the grid to traffic on a motorway, Demand Response can adjust the flow of traffic at peak times. But in the longer term, as demand increases, new lanes (or new storage capacity) will need to be added to manage the overspill.
Whilst DSR is effective at balancing the grid from renewable energy, it remains to be seen how effective it is at regulating supply from renewable energy on so-called Goldilocks days, i.e. when the wind and solar power are at their strongest. To make green energy work for us, we need at times, to deliberately increase demand (to absorb the large surges of energy that renewables produce) and then to reduce that demand when supply drops. Arguably until DSR uptake increases significantly, storage currently provides the most predictable means to raise demand.
Advanced Distribution Automation (ADA) is a less known Smart Grid technology that plays a key role in increasing resilience; by detecting power outages (e.g. caused by storms) and using smart switches to cordon off affected areas to minimise disruption to the rest of the network. In the US for example, Tennessee Electric Power Board (EPB), which serves 170,000 customers, was losing around $100 million annually due to power outage costs. Using S&C self-healing ADA technology, as of June 2013, EPB achieved a 60 percent reduction (45 million minutes) in outage duration since 2011. The following year, when a major storm caused severe damages to grid infrastructure, EPB had a 55 percent reduction in duration of outages, saving EPB $1.4 million in operational cost savings in a single event.
Ultimately, whilst its useful to compare them side- by-side, it doesnt necessarily follow that energy storage and Demand Side Response (DSR) are opposing grid balancing technologies. Technology classes perform differently according to their situation and the scale that they are used at. Neither storage nor DSR is a panacea for solving the energy trilemma, i.e. of decarbonising energy, whilst maintaining security of supply and keeping costs down. As the entire grid gets smarter, we can expect there to be more cases of these technologies working together to harmonise power flow, voltage, system stability and system balancing. Whats vital is at each stage of its modernisation, the grid is mapped in a detailed way to allow for the integration of current technology, as well as for future developments.
Source: Click Green
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