Updated: May 18
Written by Nicolaas Brouwer, edited by Johan Stelwagen & Joris Miedema
In recent years, battery energy storage systems (BESS) have received more and more attention. This is caused by a significant decrease in price together with increasing revenues. Storage systems have the benefit of being used for a wide variety of applications, where stacking multiple services provides a strong business case. This has led to the fact that Greenfish has now concluded multiple BESS related projects and has addressed a specific expert group to the subject.
From residential to utility size, mobile and stationary, Greenfish helps to provide insight on how battery energy storage can be a solution within our client’s energy system. Through independent advice, we guide clients from ideation to implementation. Despite declining costs, developing a BESS remains capital intensive, which is why a well thought-out business model is vital. To do that, Greenfish creates insight in:
- Various applications and markets
- Operating and ownership structures
- Energy storage technologies
One application could be to store electricity production at times when demand is lacking, or if the electricity grid is congested. However, a developer might not have the ambition to operate the system or commit to the large investment that is required. With in-depth knowledge of the market and experience, the right decision can be made.
Various applications and markets of BESS
The diagram below depicts a complete image of the entire range of applications for a BESS. Multiple services are often stacked to reduce the market risk the BESS might be exposed to.
At the top left are customer services, which encompass behind-the-meter functionality. This implies that these services can only be provided within a closed network, behind the connection of the Transmission System Operator (TSO) or Distribution System Operator (DSO).
For instance, increased self-consumption of energy production applies to residential buildings that have placed PV panels on their roof and prefer using that production on demand rather than feeding it into the electricity grid.
Co-location services apply when batteries are placed in co-location with electricity production and can be applied at all levels in the grid. Curtailment mitigation, for instance, utilises the BESS when electricity production would normally be curtailed. The BESS then stores production to output it at a later moment in time.
Ancillary services are services provided to the network operators. These include frequency response, where the BESS contributes to a stable frequency in the electricity grid. In return, the grid operator renumerates the BESS for making its capacity available.
Network services focus strictly on the physical network. Placing a storage system can be a way of deferring network upgrades or relieving congestion in the electricity network, by consuming or discharging energy on demand.
Depending on the preferred applications, electricity can be stored using several differing technologies. Currently, lithium-ion is a technology experiencing substantial growth in production as well as a decrease in price. These battery cells specialise at charging and discharging at a very high rate, with a short response time. Although this is extremely useful for storing electricity on an hourly basis, different technologies are favourable for slower response times or for bridging longer time periods.
Ownership and Operation
A third consideration that is relevant to developing a BESS are different ownership and operating structures. When a BESS is going to provide ancillary services, several agreements with the TSO/DSO are required. Additionally, when a BESS is going to trade electricity or strategically store renewable electricity generation, there should be an entity operating the storage system. Deciding on the right partner for these responsibilities is strongly dependent on the ambitions of the developer of the storage system. When owning and operating a BESS is not part of the core business of the developer, these investments and operations can be outsourced. Finding a balance within the investment and operational decision is key, as this strongly influences the return on investment, especially regarding operation.
Greenfish is convinced BESSs will become an integral part of future energy systems. We can solve some of the challenges that arise during the energy transition and can enhance the effectiveness and efficiency of other renewable energy system components. Choosing the right combination of services to be provided by your BESS, which specific technology to use, and how to structure ownership and operation for your BESS can be challenging. The abundance in choices may seem overwhelming, and the feasibility might not be distinct.
Greenfish consultants have first-hand experience on all aspects regarding battery energy storage, and always aim to find the solution which is most suitable to our client’s situation. We analyse the energy system of our client, optimise a concept BESS within the energy system boundaries and create an overview on different options for all BESS aspects.
Are you looking for advise regarding your energy use? Or are you ready to take action and implement energy solutions?
Reach out to our Business Manager Hugo Schoenmaker via [email protected] or Energy Strategy Manager Mick Richards via [email protected].