The expansion of renewable energies in Germany is to be greatly accelerated. By 2030, the German government has set itself the goal of 80% renewable energies in the German power supply. However, ensuring more sustainable energy generation is only one side of the coin. On the other side, the power grid, which transports renewable electricity to consumers, must be adapted to this new highly volatile power production. However, grid expansion is already lagging far behind the expansion of renewables, resulting in the curtailment of significant amounts of renewable energy. In our article "Why about 3% of renewables are shut down annually", we go into detail about the shutdown and its reasons. In addition, the expansion of renewables is increasing volatility on the generation side, which urgently needs to be countered with increased flexibility on the transport and consumption level.
"Increased volatility on the generation side due to the expansion of renewables must be addressed by increased flexibility at the transmission and consumption levels."
The creation of flexibilities is of equal importance to the creation of generation capacities in order to achieve the 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 shift its use to the evening hours. However, their use is only possible to a limited extent on a regional basis. In the future, storage power plants, especially large-scale battery storage, will be used to balance the increasing fluctuations in the electricity market. If large-scale battery storage is built as grid-connected ("stand-alone") storage, it can be used to benefit the entire energy system - i.e. the generation, transport and consumption levels.
Large-scale battery storage can be used to improve system and supply security and to support energy markets. Specifically, large-scale battery storage can be used for the following purposes:
- Control energy:
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. Control energy can be used to draw power as well as to feed additional power 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.
- Intraday Trading:
Volatility on the spot market increases with the addition of renewable energy. Battery storage systems use trading on the intraday market to keep shortfalls or surpluses as low as possible. In this way, energy is purchased at a favorable time and profitably fed back into the grid at any later time. This so-called arbitrage trading counteracts price fluctuations on the electricity market.
- Peak shaving:
If a load peak occurs above a defined limit, it is capped by the large-scale battery storage. The storage system provides the necessary power accordingly. This keeps grid consumption below the defined value.
- Congestion management:
Congestion management (redispatch) refers to the intervention of the grid operator in the planned schedule of conventional power generation plants to shift feed-in in order to prevent or relieve power overloads in the power grid. Large-scale battery storage can go beyond normal redispatch and not only be throttled to zero like generation plants, but also serve as a load to additionally avoid the shutdown of other generation plants.
- Reactive power:
Reactive power is the portion of the power provided by the grid that results from the interactions in an AC system and cannot be actively used by consumers. During the rest period, large-scale battery storage can provide reactive power to the grid operator through bilateral contracts. Thus, even in the resting phase, turnover of the storage is possible.
- Black start:
Black start capability is the ability of a power plant - independent of the power grid - to start up from a shutdown state. This is particularly important in the event of a widespread power blackout in order to bring the power grid back into operation. Apart from hydroelectric power plants or gas-fired power plants, which will be undesirable in the future, large-scale battery storage facilities are virtually the only plants capable of black start.
The special feature of battery storage systems therefore lies in their ability to be used in a multifunctional way. 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, multi-use strategy means that the battery storage system is used for different purposes in terms of its multiple application capabilities. From an energy system perspective, multi-use strategy means that the various (system) services provided by the storage device are used profitably for the transformation of the German energy system and its increasing need for flexibilities. From an economic perspective, 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.
In the design of business models for large-scale battery storage, the multi-use strategy is an important principle of Kyon Energy. This allows large-scale battery storage to develop its full potential and contribute to the transformation of the energy system. By tapping into different revenue streams in combination with a technical system design tailored to them, a robust and economically attractive business model is created.