KIT – The Research University in the Helmholtz Association INSTITUTE FOR INDUSTRIAL PRODUCTION (IIP) Chair of Energy Economics (Prof. Dr. W. Fichtner) www.kit.edu Energy flexibility in German industry An economic model-based analysis of parallel revenue streams from batteries Fritz Braeuer, Russell McKenna, Wolf Fichtner
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Energy flexibility in German industry · Fritz Braeuer – Energy flexibility in German Industry. Reserve power. Primary balancing control Secondary balancing control Back-up power.
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KIT – The Research University in the Helmholtz Association
INSTITUTE FOR INDUSTRIAL PRODUCTION (IIP)Chair of Energy Economics (Prof. Dr. W. Fichtner)
www.kit.edu
Energy flexibility in German industryAn economic model-based analysis of parallel revenue streams from batteries
Fritz Braeuer, Russell McKenna, Wolf Fichtner
Chair of Energy Economics 2 06.09.2017 Fritz Braeuer – Energy flexibility in German Industry
Agenda
Why energy flexibility?
Battery revenue streams
Research question
The flex-model
Results
Conclusion/Outlook
Chair of Energy Economics 3 06.09.2017
Why energy flexibility?
Fritz Braeuer – Energy flexibility in German Industry
Integration of growing amount of renewable energy (International ElectrotechnicalCommission (2011))Avoid grid extension (Reid und Julve (2016); Bolay et al. (2016))Prices for battery storage systems (BSS) have dropped (Kairies et al. (2016))
0500
100015002000250030003500400045005000
2009 2010 2011 2012 2013 2014 2015
Cur
taile
d en
ergy
thro
ugh
feed
-in
-man
agem
ent i
n G
Wh
year
total wind solar bio-mass
Curtailed energy through feed-in-management in Germany(Bundesnetzagentur (2016))
Chair of Energy Economics 4 06.09.2017
Why energy flexibility?
Fritz Braeuer – Energy flexibility in German Industry
Integration of growing amount of renewable energy (International ElectrotechnicalCommission (2011))Avoid grid extension (Reid und Julve (2016); Bolay et al. (2016))Prices for battery storage systems (BSS) have dropped (Kairies et al. (2016))
0500
100015002000250030003500400045005000
2009 2010 2011 2012 2013 2014 2015
Cur
taile
d en
ergy
thro
ugh
feed
-in
-man
agem
ent i
n G
Wh
year
total wind solar bio-mass
Curtailed energy through feed-in-management in Germany(Bundesnetzagentur (2016))
Pseudo-flexibility through a battery storage system
(BSS)Incentive for demand side
management in industry
Increasing need for energy flexibility
Chair of Energy Economics 5 06.09.2017
Battery revenue streams
Fritz Braeuer – Energy flexibility in German Industry
Balancing control power
Primary Balancing ControlSecondary Balancing Control
Arbitrage trading
Day-ahead marketIntraday market
Peak shaving
Capacity prices for grid connectionIndividual grid prices
Increasing self-consumption
Utilizing own energy productionPV, Wind or CHP
Chair of Energy Economics 6 06.09.2017
Battery revenue streams
Fritz Braeuer – Energy flexibility in German Industry
Reserve power
Primary balancing controlSecondary balancing controlBack-up power
Arbitrage Ttading
Day-ahead marketIntraday market
Peak shaving
Capacity prices for grid connectionIndividual grid prices
Increasing self-consumption
Utilizing own energy productionPV, Wind or CHP
Chair of Energy Economics 7 06.09.2017
Battery revenue streams
Fritz Braeuer – Energy flexibility in German Industry
Reserve power
Primary balancing controlSecondary balancing controlBack-up power
Arbitrage Ttading
Day-ahead marketIntraday market
Peak shaving
Capacity prices for grid connectionIndividual grid prices
Increasing self-consumption
Utilizing own energy productionPV, Wind or CHP
Arghandeh, R. et al. 2014
Cho, J. andKleit, A. 2015;
Moreno, R. et al. 2015
Stephan, A. et al. 2016
Dowling, A. et al. 2017
Chair of Energy Economics 8 06.09.2017
Research question
By following different revenue streams in parallel, can we increase the profitability of a battery storage system (BSS)?
Fritz Braeuer – Energy flexibility in German Industry
Chair of Energy Economics 9 06.09.2017
The flex-model
Fritz Braeuer – Energy flexibility in German Industry
PProd, PV, power from PV to productionPProd, BS, power form BS to productionPProd, Grid, power form grid to productionPPV, BS, power from PV to BSPPV, Grid, power from PV to gridPBS, Grid, power between BS and gridPGrid, total power from or to the grid
Chair of Energy Economics 10 06.09.2017
Model explanation
Fritz Braeuer – Energy flexibility in German Industry
Energy demand and supply profiles
Battery dispatch schedule
Chair of Energy Economics 11 06.09.2017
Model explanation
Fritz Braeuer Current status: Decentralized multi energy model
Arbitrage
min 𝑐𝑐𝑐𝑐𝑐𝑐𝑡𝑡𝑣𝑣𝑣𝑣𝑣𝑣 = �𝑞𝑞=1
4
𝑥𝑥𝑞𝑞,ℎ,𝑤𝑤𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 ⋅ 𝑐𝑐𝑞𝑞,ℎ,𝑤𝑤
𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣
min 𝑐𝑐𝑐𝑐𝑐𝑐𝑡𝑡𝑣𝑣𝑣𝑣𝑣𝑣 = �ℎ=1
168
�𝑞𝑞=1
4
𝑥𝑥𝑞𝑞,ℎ,𝑤𝑤𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 ⋅ 𝑐𝑐𝑞𝑞,ℎ,𝑤𝑤
𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 + 𝑥𝑥ℎ,𝑤𝑤ℎ𝑜𝑜𝑜𝑜𝑣𝑣 ⋅ 𝑐𝑐ℎ,𝑤𝑤
ℎ𝑜𝑜𝑜𝑜𝑣𝑣
Chair of Energy Economics 12 06.09.2017
Model explanation
Fritz Braeuer Current status: Decentralized multi energy model
Arbitrage
Primary balancing power (PBP)
min 𝑐𝑐𝑐𝑐𝑐𝑐𝑡𝑡𝑣𝑣𝑣𝑣𝑣𝑣 = �𝑞𝑞=1
4
𝑥𝑥𝑞𝑞,ℎ,𝑤𝑤𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 ⋅ 𝑐𝑐𝑞𝑞,ℎ,𝑤𝑤
𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣
min 𝑐𝑐𝑐𝑐𝑐𝑐𝑡𝑡𝑣𝑣𝑣𝑣𝑣𝑣 = �ℎ=1
168
�𝑞𝑞=1
4
𝑥𝑥𝑞𝑞,ℎ,𝑤𝑤𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 ⋅ 𝑐𝑐𝑞𝑞,ℎ,𝑤𝑤
𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 + 𝑥𝑥ℎ,𝑤𝑤ℎ𝑜𝑜𝑜𝑜𝑣𝑣 ⋅ 𝑐𝑐ℎ,𝑤𝑤
ℎ𝑜𝑜𝑜𝑜𝑣𝑣
min 𝑐𝑐𝑐𝑐𝑐𝑐𝑡𝑡𝑣𝑣𝑣𝑣𝑣𝑣 = �𝑤𝑤=1
50
�ℎ=1
168
�𝑞𝑞=1
4
𝑥𝑥𝑞𝑞,ℎ,𝑤𝑤𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 ⋅ 𝑐𝑐𝑞𝑞,ℎ,𝑤𝑤
𝑖𝑖𝑖𝑖𝑖𝑖𝑣𝑣𝑣𝑣 + 𝑥𝑥ℎ,𝑤𝑤ℎ𝑜𝑜𝑜𝑜𝑣𝑣 ⋅ 𝑐𝑐ℎ,𝑤𝑤
ℎ𝑜𝑜𝑜𝑜𝑣𝑣 + 𝑃𝑃𝑤𝑤𝑃𝑃𝑃𝑃𝑃𝑃 ⋅ 𝑐𝑐𝑤𝑤𝑃𝑃𝑃𝑃𝑃𝑃
Chair of Energy Economics 13 06.09.2017
Model explanation
Fritz Braeuer Current status: Decentralized multi energy model
International Electrotechnical Commission (2011): Electrical Energy Storage. Hg. v. International Electrotechnical Commission.Reid, Gerard; Julve, Javier (2016): Second Life-Batteries as Felxible Sotrage for Renewables Energies. Hg. v. Bundesverband Eneuerbare Energien e.V. (BEE).Bolay, Sebastian; Bullmann, Till; Hegner, Miriam (2016): Faktenpapier Energiespeicher. Rechtsrahmen, Geschäftsmodelle, Forderungen. Hg. v. BVES - BundesverbandEnergiespeicher e.V. Berlin und DIHK - Deutscher Industrie- und Handelskammertag.Kairies, K.-P.; Haberschusz, D.; van Ouwerkerk, J.; Strebel, J.; Wessels, O.; Magnor, D.; Badeda, J.; Sauer, D. U. (2016): Wissenschaftliches Mess- und Evaluierungsprogramm Solarstromspeicher - Jahresbericht 2016 .Shoreh, Maryam H.; Siano, Pierluigi; Shafie-khah, Miadreza; Loia, Vincenzo; Catalão, João P.S. (2016): A survey of industrial applications of Demand Response. In: Electric Power Systems Research 141, S. 31–49.
Fritz Braeuer – Energy flexibility in German Industry
Arghandeh, Reza; Woyak, Jeremy; Onen, Ahmet; Jung, Jaesung; Broadwater, Robert P. (2014): Economic optimal operation of Community Energy Storage systems in competitive energy markets. In: APPLIED ENERGY 135 (SI), S. 71–80. DOI: 10.1016/j.apenergy.2014.08.066.Cho, Joohyun; Kleit, Andrew N. (2015): Energy storage systems in energy and ancillary markets: A backwards induction approach. In: APPLIED ENERGY 147, S. 176–183. DOI: 10.1016/j.apenergy.2015.01.114.Dowling, Alexander W.; Kumar, Ranjeet; Zavala, Victor M. (2017): A multi-scale optimization framework for electricity market participation. In: APPLIED ENERGY 190, S. 147–164. DOI: 10.1016/j.apenergy.2016.12.081.Rodrigo Moreno; Roberto Moreira; Goran Strbac: A MILP model for optimising multi-service portfolios of distributed energy storage.Stephan, A.; Battke, B.; Beuse, M. D.; Clausdeinken, J. H.; Schmidt, T. S. (2016): Limiting the public cost of stationary battery deployment by combing applications. In: Nature Energy 2016 (Vol. 1). In: Applied Energy.
Fritz Braeuer – Energy flexibility in German Industry
Chair of Energy Economics 26 06.09.2017
Appendix
Fritz Braeuer – Energy flexibility in German Industry