Energy Storage Takes the Global Stage: What’s the Value Proposition for Your Region? - A European Perspective

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June 24, 2015

Energy Storage Takes the Global StageWhat’s the Value Proposition for Your Region?

A European Perspective – Presented by Dr. Martijn Huibers

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General Trends in European Power Sector

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Decentralization: large amounts of distributed generation (DG), new entrants in the energy market (often SMEs); new ways of cooperation; participating end-users

Europeanization: mergers and acquisitions; power plants at remote distance from load centers; cross-border power flows

Requirement to have an affordable, reliable and sustainable grid Affordable

Reliable Sustainable

Reliable

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Differences in European Power Sector

Diversity; for example:

– Denmark: Wind, district heating, high taxes

– Germany: PV, phase-out of nuclear

– Alps region: Hydropower, pumped storage plants (PSP)

Wide range of regulations and taxation (incentive for home-based storage)

Electricity prices for household consumers, second half 2014 (EUR per kWh) [Eurostat]

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Potential Storage Services Overview (Selected Examples)

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Storage services

Germany

UKSpain

Italy

France

Denmark

Greece

Ireland

Netherlands

FCR (frequency containment reserve)

FRR (frequency restoration reserve)

Residential storage + PV  

Islands / off-grid

Overall rating based on DNV GL proprietary analysis, including various factors like financial benefits, market size, barriers, …

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Home-based Storage Market

Heimspeicher (home storage) market in Germany

– Large installed capacity PV

– Feed-in tariff, decreasing (new systems 2015: €0.09 - 0.12 / kWh)

Business cases may be difficult; emotional arguments play a role

Storage system not fully utilized, possibility for ancillary services (benefit stacking)

Norway

– Remote locations, lines (no cables)

– Storage for resilience

The Netherlands

– Net metering so no business case

– Multitude of demonstration projects

German ‘solar storage’ system SENEC.HOME

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The Netherlands: Storage Policy in Development (Roadmap)

Market can absorb the fluctuations due to the growth of solar and wind

Commercially-available technologies provide necessary services, but returns remain low

Regulatory changes required:

– Ancillary services main driver, but insufficiently valued

– Time- and location-based tariffs required

To stimulate:

– Newly-developed technologies with low cost per kW or kWh

– Software for 'benefit stacking' storage

– Business concepts that exploit energy storage

Opportunities for the Netherlands lie in:

– "Systems" (Software Management, roles in market model)

– The strong sectors (manufacturing, gas, chemicals) and

– Encouraging of start-ups

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The Netherlands: Demonstration Projects

Pampus - Avoided Grid cost: € 2 000 000 for a cable

Aim: Autarky rate of 70%, local RE production and local use with a 24 kWh battery (without the diesel generator / grid)

Example: Pampus Power island

2nd life batter

y

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Pumped Storage in Europe

Ageing assets

By 2020: >30 year old installations

Replacement market opening up

– Fixed-speed variable speed (VS-PSP)

1930 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2006Year of commissioning

Installed power

10,000 MW

20,000 MW

30,000 MW

40,000 MW

Preliminary results eStorage project

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Regulations in Europe / Worldwide

~100 standards applicable to EES found

Issues: gaps, quality, extent, overview, …

No comprehensive standard

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Shaping Regulations: Recommended Practice

Joint Industry Project (JIP) GRIDSTOR

– Accelerating safe & sound implementation of EES

JIP consortium of ~10 participants

– End-users (DSO, TSO, utilities etc)

– Energy Storage system integrators, suppliers

– Regulators and government bodies

Deliverable: publicly available Recommended Practice on grid-connected energy storage

– guidelines and methods to evaluate, assess and test safety, operation and performance of grid-connected ES

– taking into account worldwide accepted regulations and best practices like ISO, IEC and IEEE standards (e.g. IEC TC-120)

Global approach: US, EU, APAC and ME

SAFETY

FMECA/HAZOP

Designconsequences

Grid implementation

(technical)

Legalaspects

OPERATION

Lifetimedetermination

State of Healthdetermination

Controlsystems

State of Charge determination

PERFORMANCE

Requirements Specifications

Validation Data acquisition

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What Do We Think? Opportunities in Europe (1)

Which markets?

– Home storage i.e. behind the meter, especially in high-tax countries. Already business case in Germany (given 30% subsidy)

– FCR. Competition: stranded assets at marginal costs (overcapacity flexibility)

Flexibility requirements versus increasing renewables share

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What Do We Think? Opportunities in Europe (2)

Which technologies / products?

– Lithium ion dominant in certain markets

– e.g. home storage, where footprint and noise etc. are important

– In general: tech not locked in; options depend on application-dependent specs:

– Power, capacity, response time, cost, …

Take-home messages for users, manufacturers, investors?

– Significant developments, interest and investment possibilities

– No commercial market yet*, but within 2-3 years for some applications

– Diversity within Europe; look into local markets and regulations

– Key issue: standardisation of specifications; from project to product market

– Multi-actor business models emerging (non-traditional, multi-market)

* Some exceptions such as home storage market

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Contact Our Energy Storage Experts Today!

Dr. Martijn Huibers Richard Fioravanti Dr. Matthew Rowe

Contact us:[email protected]

Learn more about our Energy Storage expertise:

www.dnvgl.com/energystorage

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