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PÖYRY POINT OF VIEW REPORT / 22 May 2019

How to manage the increased need for grid flexibility?

The global energy system is under transformation. The energy transition from a centralized, fossil fuel based energy system to a more decentralized, renewable energy based system will challenge the balancing of electricity supply and demand. This stresses the importance of grid flexibility. In this challenge, energy storage will play a valuable role as it can provide flexibility and support the renewable energy integration.

BESS today

The promises of using stationary and grid connected battery energy storage systems (BESS) have grown due to their attractive technological characteristics. Even though the cost of batteries is still relatively high, large scale BESS assets has been in use for years. A great example is the Hornsdale power reserve in the south of Australia who has been in use since December 2017, with an output of 100 MW and an energy capacity of 129 MWh.

In Sweden, and many other countries as well, uncertainties about what a future regulatory framework could look like has held a potential BESS business back, but this is starting to change now. Grid tariffs and taxes are changing in a beneficial way for BESS. Dynamic tariffs (i.e. power based tariffs) that reflect the congestion in the grid are a way to provide price signals for flexibility markets. Such tariffs are favorable for BESS, and are currently considered by several Swedish grid owners.

An EV battery is typically replaced when the capacity is below 70-80% of the initial capacity. These batteries are still sufficiently good for applications provided by a stationary BESS, leading to significantly lower CAPEX.

What is needed to make it work?

“In order to have a successful BESS business, clear long term regulatory frameworks needs to be in place. I believe that we will see a new type of independently driven companies, suppling a variety of services towards different clients. Additional services provided by a BESS could be market participation and electricity trading. It could also partly act as a cheap connection point for an EV charging station. The main purpose would obviously be grid stabilization, suppling frequency regulation services towards a grid owner. These type of services combined with infrastructure upgrades will be a major part of the solution in getting a 100% fossil free energy system” says Johan Jalvemo, Head of Transmission and Distribution, Pöyry Sweden.

Read more on Batteries in the electricity grid in this report.

Additional information:
Johan Jalvemo, Head of Transmission & Distribution, Pöyry Sweden
Tel +46 76 769 64 15

Did you know? Pöyry is participating in EU-SysFlex, the EU project creating a long-term roadmap for the large-scale integration of at least 50% renewable energy to the European electricity grids.

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