The expansion of renewable energy in Germany is to be significantly accelerated. By 2030, the Federal Government has set itself the target of 80% renewable energy in Germany's electricity supply. Ensuring more sustainable energy generation is only one side of the coin, however. On the other hand, the power grid, which transports renewable electricity to consumers, must be adapted to this new, highly volatile electricity production. However, grid expansion is already lagging far behind the expansion of renewables and is therefore forcing significant amounts of renewable energy to be regulated. Our article “Why around 3% of renewables are shut down annually” discusses the regulation and its reasons in detail. In addition, the expansion of renewables is increasing volatility on the generation side, which urgently needs to be addressed with increased flexibility at the transport and consumption level.
“The increased volatility on the generation side due to the expansion of renewable energies must be countered by increased flexibility at the transport and consumption level. ”
Creating flexibilities is just as important as creating generation capacities for achieving climate protection goals. Pumped storage power plants are already being used as flexible power plants to store some of the solar power generated during the day and to shift its use into the evening hours. However, their use is only possible to a limited extent on a regional basis. In the future, storage power plants, in particular large battery storage systems, will be used to compensate for increasing fluctuations in the electricity market. If a large battery storage system is built as a grid-connected (“stand-alone”) storage system, it can be used to benefit the entire energy system — i.e. the generation, transport and consumption levels.
Large-scale battery storage systems can be used to improve system and supply security and to support energy markets. Specifically, a large battery storage system can have the following purposes:
1. Control energy: serves as a reserve to compensate for short-term fluctuations in the power grid frequency and to maintain the constant frequency of 50 Hz. With the help of control energy, electricity can be withdrawn as well as fed into the grid. Large-scale battery storage systems are some of the few systems that can provide both positive and negative control energy within milliseconds.
2nd Intraday trading: Volatility on the spot market is increasing with the expansion of renewable energy sources. Battery storage systems use intraday market trading to keep shortages or surpluses as low as possible. In this way, energy is bought at a convenient time and fed back in profitably at any later date. This so-called arbitrage trading counteracts price fluctuations on the electricity market.
3. Peak Shaving: If a load peak occurs above a defined limit value, it is capped by the large battery storage device. The memory accordingly provides the necessary power. The network connection is thus kept below the defined value.
4. Congestion management: Congestion management (redispatch) refers to the intervention of the grid operator in the planned schedule of conventional power generation plants to shift the supply in order to prevent or remedy power overloads in the power grid. Large-scale battery storage systems can go beyond normal redispatch and not only be throttled to zero like generation plants, but also serve as consumers in order to also avoid shutting down other generation systems.
5. Reactive power: Reactive power is the part of the power provided by the grid that is produced as a result of interactions in an alternating current system and cannot be actively used by consumers. During rest periods, large-scale battery storage systems can provide the grid operator with reactive power through bilateral agreements. This allows storage to be converted even during the rest phase.
6. Black start: Black start capability is the ability of a power plant — regardless of the power grid — to start up when switched off. This is particularly important in the event of a nationwide power failure in order to restart the energy network. In addition to hydroelectric power plants or the gas power plants that will not be desired in the future, battery storage systems are almost the only systems capable of black starting.
The special feature of battery storage systems therefore lies in their ability to be used multi-functionally. To enable battery storage systems to develop their full potential for the energy system of the future, Kyon Energy has introduced the multi-use strategy. From a functional point of view, a multi-use strategy means that the battery storage system is used for various purposes in terms of its diverse operational capabilities. From an energy system perspective, a multi-use strategy means that the various storage (system) services are used profitably to transform the German energy system and its increasing need for flexibility. From an economic perspective, a multi-use strategy means that the battery storage system can combine a wide variety of revenue streams and offset market risks by orchestrating its flexibilities.
When designing business models for large-scale battery storage, the multi-use strategy is an important principle of Kyon Energy. As a result, large battery storage systems can develop their full potential and contribute to the transformation of the energy system. By tapping into various revenue streams in combination with a coordinated technical system design, a robust and economically attractive business model is created.
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