Germany is making great progress in the energy transition: 142 gigawatts of renewable energy plants are already connected to the grid and several hundred gigawatts are planned. As good as this news is for achieving the climate targets: The expansion of renewables is putting the electricity grid to the test. As their generation fluctuates depending on the weather, time of day and season, there will be over- or underproduction of electricity. The grid is becoming more volatile; load currents, frequency and voltage need to be regulated more closely. With every additional gigawatt of renewable energy, integration into the grid becomes more complex.
To ensure that the electricity system continues to function in the future, the market and grid must become significantly more flexible. Cost-effective short-term storage solutions such as grid-connected large-scale battery storage systems are essential for this. They already make a major contribution to the stability of the electricity grids and make it possible to integrate more renewable energies. However, the current regulatory framework still makes it difficult to use them in a grid-friendly manner and some of the technical potential remains untapped.
Grid connection in particular is a decisive criterion for storage systems to be able to fully exploit this potential. However, there are currently fundamental regulatory gaps for the integration of storage projects that need to be closed:
1. Grid connections for storage facilities are only processed with a delay or even have to be refused, as grid capacities are a scarce commodity. This means that storage locations that make sense for the energy transition cannot be developed further.
2. A lack of clear regulations on the integration of storage facilities into the processes of grid operators can exacerbate operational problems for grid operators.
In principle, storage systems could play a supporting role in the integration of renewable energies at regional level. Decentralized storage systems in particular have the potential to make a valuable contribution to the cost-effective and safe implementation of the energy transition. However, grid capacities are becoming increasingly scarce. The German distribution grids are currently very busy due to the immediate and priority connection requests in accordance with the Renewable Energy Sources Act (EEG), especially in the area of photovoltaic systems.
From this point of view, it is therefore urgently necessary to either increase the capacities for the grid connection of storage facilities by expanding the grid or to position and operate storage facilities in such a way that they can act in a more grid-friendly manner. This would help to use the existing grids more efficiently and thus create additional capacity for the integration of renewable energies.
Although grid expansion is already being driven forward intensively in many places, the resulting capacities are often already reserved for specific generation projects. At the same time, storage systems are also competing for grid capacity on the consumer side due to the increasing electrical demand in households, commerce and industry.
Many grid operators already see the added value of storage today, but there are still many regulatory and operational hurdles that need to be overcome before it can be used.
1. storage facilities could provide for additional redispatch measures subject to compensation if they were to exacerbate existing congestion in accordance with the market-based schedules.
2 In the current regulatory environment, remuneration for grid-serving use is only possible for the grid operator with negative economic consequences. These costs are allocated to the grid operator's operating costs and are not subject to adjustment within a regulatory period due to regulatory requirements.
3. forecasting the grid load from storage facilities is difficult, as their use can hardly be predicted by grid operators due to combined balancing power and spot marketing. As a result, storage facilities are assumed to have both full positive and negative feed-in at all times for grid planning purposes. Corresponding reserves must be kept in the grid.
4. even pragmatic IT solutions must be considered critical due to the challenges involved in implementing Redispatch 2.0 processes and require considerable effort.
According to §8 EEG, renewable generation systems are subject to the grid connection obligation. However, this obligation does not apply to storage systems. The grid connection for storage systems is therefore currently only granted if it is operationally possible and reasonable. In addition, many grid operators lack experience in dealing with storage systems, particularly in light of the increasing bottleneck situations in the distribution grids. There is uncertainty as to whether and under what conditions the connection of storage facilities is operationally possible and reasonable.
The emphasis on risks in the grid operators' decision-making process means that grid connection inquiries currently tend to receive a negative response. The time availability of the grid connection and excessively high grid connection costs are the main reasons for the failure of battery storage projects.
There is an urgent need for action so that the regional benefits of storage can be utilized in grids with a strong focus on renewables.
In order to make advantageous use of storage systems in the distribution grid, the basic framework conditions must be adapted. Some measures are presented below that should help to facilitate the connection of storage systems and thus maximize their positive effect.
Just like renewable energy systems, storage systems that serve the system should receive an accelerated and preferential grid connection (similar to Section 8 EEG 2023) in order to be able to exploit their potential as quickly as possible and maximize their contribution to the energy transition. This requires clear criteria and procedures to be defined. These could include storage capacity, the speed of response to requests from the grid operator, the specification of power change gradients when marketing on the spot market, the stability of the grid connection and other technical features.
In order to quickly implement transparent and clear regulations for grid connection and the market- and grid-friendly use of storage systems, Kyon Energy is proposing an Energy Storage Systems Grid Connection Ordinance (SpeicherNAV). Just as the Power Plant Grid Connection Ordinance (KraftNAV) regulates the minimum technical requirements for the connection of power plants to the extra-high voltage grid and their operation on the grid, a Storage Ordinance could regulate the special features of storage systems when connecting to the grid and remove the hurdles mentioned above.In addition to speeding up grid connection and defining grid-friendly operating concepts, economic aspects such as fair cost allocation should also be included.
Storage systems can make a positive contribution to avoiding congestion. On the one hand, by helping to defuse bottleneck situations preventively and thus reduce the amount of redispatch, and on the other hand, by also being used to eliminate a bottleneck at comparatively lower costs than renewable energy plants (prerequisite: selection of plants based on the grid operator's common merit order).
The integration of storage into the redispatch process can therefore lead to a reduction in the costs of congestion management and, in the long term, also have a positive impact on the balance sheet of distribution system operators due to a change in the regulatory framework.
Redispatch approaches currently under discussion (e.g. complementary market-based redispatch), which include storage facilities, are based on a joint merit order of consumers, storage facilities and generation plants (including renewable energy plants). Storage facilities are only included in redispatch if their activation in redispatch is more cost-effective than the use of other options, such as the - unfortunately - frequently practiced curtailment of renewable energy plants.
As with renewable energy systems, market-led large-scale storage systems do not place any increased demands on security of supply. This opens up the possibility of operationally dissolving the n-1 criterion on the supply side and thus streamlining and simplifying existing structures.
The n-1 criterion refers to the principle that in the event of a component failure in the power grid, the supply is still guaranteed. Normally, this requires redundant systems and equipment to ensure uninterrupted operation. However, this criterion is not necessarily required for market-led large-scale storage systems. Due to their flexible response and adaptability to energy demand, these storage systems are not considered a potential source of supply interruptions. Even today, switchgear or lines are often not designed redundantly when connecting storage facilities in order to make more efficient use of the existing operating resources. However, grid operators plan and operate their grids on the basis of outage calculations (n-1), which often take into account the entire injection and withdrawal of storage systems.
It is technically possible to resolve the n-1 criterion in the operation of market-led large-scale storage facilities. This applies not only to the generation side, but also to the demand side of the storage system. The operational resolution of the n-1 criterion for market-led large-scale storage systems facilitates their integration into the electricity grid and promotes the use of this storage technology to support the energy transition. However, it is important that safety aspects continue to be taken into account in order to ensure a reliable power supply. Additional applied studies, for example in the form of pilot projects, are useful for this purpose.
A few weeks ago, the legislator cleared the way for the continuation of the grid fee exemption for storage facilities for a further three years. Storage facilities that are connected to the grid by 2029 can then expect to be exempt from grid fees for 20 years, allowing them to be operated economically. Without the adjustment, storage facilities connected to the grid after 2026 would have been subject to full grid fees, which would have already brought the development of new projects to a standstill.
The year 2029 still seems a long way off, but in fact "only" three years have been gained in the discussion, which are urgently needed for a sustainable solution. It is also clear that the Federal Network Agency will play a key role in finding a permanent solution. However, it is precisely the advantages described here, not only for the economy as a whole, but also for the grids in particular, that justify a permanent exemption from grid fees. This will have to be discussed with the Federal Network Agency in the coming years.
The currently prevailing scarcity of grid connection options for grid-connected battery storage systems and the lack of regulations for their procedural integration represent a significant obstacle to the macroeconomically effective and efficient use of these storage systems. In order to make the best possible use of the regional advantages of storage systems, urgent measures must therefore be taken. In addition to accelerating grid expansion in the distribution grid, clear regulations and stable framework conditions are required for the grid-friendly use of storage systems in order to make investments more attractive and ensure efficient integration into the grid. This is the only way to successfully overcome the challenges of the energy transition.
The information on which the blog entry is based was prepared in a collaboration between E-Bridge Consulting GmbH, WEMAG Netz GmbH and Kyon Energy:
Deuchert, B.; Kertscher, P.; Kraemer, C.: Challenges and solutions for the grid connection of storage facilities in distribution grids, Energiewirtschaftliche Tagesfragen vol. 73, no. 11, 2023, pp. 23-26
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