Guest article by Hans Urban: Large Next-Generation Battery Storage for the Energy Transition

Guest article by Hans Urban: Large Next-Generation Battery Storage for the Energy Transition
The energy turnaround in Germany is in full swing!

Such a statement may sound somewhat provocative in view of the many current problems. Nevertheless, it is factually correct. Of course, the system transformation will ultimately still be a long and rocky road, and work must be done in many places to ensure that it continues quickly and consistently.But on the other hand, let's imagine the current situation if we didn't already have more than 50 percent renewable energies in the power grid.What disproportionately greater problems we would be facing at the moment.

On the other hand, one could certainly imagine how much better our situation would be at the moment if politics had not completely slowed down the expansion of renewables in 2012, but had continued at the pace of that time. In this case, too, a war in Ukraine with all its consequences would of course be tragic. But with regard to our dependence on fossil energy imports and especially with regard to current electricity prices, the situation would be much different.

How did this success of renewables in Germany come about, which is certainly the envy of many countries in Europe and beyond? The EEG, which in its original form consisted of five pages of legal text, set the political framework. However, the investments in renewable energies were not made from state funds; instead, almost 100 percent of the investments were made from private capital. Of course, the German electricity customer was definitely burdened with levies, an effect that is now completely reversed in the current price situation. Today, we can see more clearly than ever how successful the EEG was at the time. The enormous price reductions for the generation of renewable energies have in the meantime led to the fact that one even thinks these days about a cap of the excess profits of the operators of renewable energy plants. Another possibility would be to change the electricity market design (keyword: merit order) and to let consumers benefit directly from the comparatively low electricity prices from renewable energies.

In any case, the fact is that consumers now benefit greatly from inexpensive renewable energies, solely a success of the EEG, which is now a good 20 years old.

With all this success of renewable energies, however, it must not be concealed that with the increasing expansion of these volatile forms of energy, large storage capacities will be required. In order to arrive at an ultimately optimized overall system, there will be various storage technologies in the long term. These include hydrogen technology or methanization for long-term storage, but also home battery storage or storage in electric vehicle fleets, which could be networked in the future, and much more.

In addition to these technologies, however, relevant capacities of large-scale battery storage will be needed in any case.This is because these storage facilities are best suited to stabilize and relieve the load on grids and to distribute energy both locally and over time in a sensible manner. Various studies on future energy and electricity market design have come to the unanimous conclusion that a three-digit order of magnitude of gigawatt hours in the form of large battery storage systems must be installed at important network nodes.

The storage turnaround in Germany - it is also already in full swing!

Interestingly, the current momentum of this storage expansion is much greater than policymakers and the public currently perceive.

In the general perception and reporting, many projects do not appear at all at the moment. There are reports about storage systems in the context of funded projects, there are press reports about storage systems in the EEG innovation tenders and, of course, about the increasing number of storage systems at residential and commercial customers.

However, there is very little reporting on "next generation large-scale battery storage".In Germany, for example, several large-scale battery storage facilities in the order of 100 megawatt hours and more are currently being planned, under construction or already being completed.

While public projects such as the planned network boosters must be made generally transparent, these are proprietary and market-driven projects. In these projects, suitable grid connection nodes are identified first and foremost, land and permits are acquired, and the operator models are agreed with investors. This is the special feature of this new generation of large-scale battery storage systems: they are generally self-financing, purely from market revenues!

The high fluctuation that has increasingly emerged in the electricity grids in recent years offers the storage facilities business models that lead to sufficient profitability for themselves and, in addition, thereby counteract this fluctuation in turn. This market mechanism thus solves two problems:The financing of storage facilities for the energy turnaround does not burden grid operators, taxpayers, electricity customers.Time-consuming regulated tenders are also not necessary, since there are only private investors.

In Germany, there are currently a relevant number of such fully planned projects, including the associated grid connection nodes and suitable plots of land; to put it bluntly, they can be built tomorrow. Because the advantage of storage projects is the short realization time! As a rule, it is about two years from the groundbreaking ceremony to commissioning, which is orders of magnitude shorter than the usual project durations of other infrastructure projects.

Large-scale battery storage facilities are compact, practically invisible and almost indistinguishable from a normal commercial building. They are always located in the backdrop of a commercial and industrial area, so there are no restrictions on residential areas, infrastructure, agriculture or tourism. The special feature, however, is the high storage density.Thus, a storage facility in the order of 200 - 250 megawatt hours can be accommodated on one hectare.

 Political obstacles must be removed now

This is where the circle closes. The expansion of these new-generation and new-scale storage capacities is currently developing a great deal of momentum, analogous to the expansion of renewable energies that began a good 20 years ago, and is thus taking the energy transition to the next level. The main reason for this is that the storage facilities can refinance themselves on the market and that a great deal of private investment capital is thus available for these projects.

So the state and politicians do not have to finance these projects from budgets and tax revenues, and that would not even be possible on this scale.

But: Similar to the EEG 20 years ago, the political framework conditions must be set appropriately!

In general, it is necessary to recognize and define storage as the fourth pillar of energy supply.To this end, many guidelines need to be revised in detail. Since storage systems always have a grid-relieving and grid-stabilizing effect in practically all cases, they must not be treated in the same way as grid-loading consumers. This is the only way to create a suitable investment climate for these projects.

A first important step in this context is the abolition of the so-called construction cost subsidies for storage projects. Real demands for this subsidy amount to up to 20 percent of the total investment costs for the storage facilities and thus call many currently planned large-scale projects into question.

The construction cost subsidy is intended as a cost sharing for the withdrawal of large guaranteed consumer services from the grids; for grid-serving storage facilities, which are to be built at central grid nodes to boot, it can be justified neither technically nor legally.

In view of the necessary dynamic expansion of storage facilities, a rapid political decision is therefore required here, or more precisely a general abolition of the construction cost subsidy for storage facilities.

-Author: Dipl. Ing. Hans Urban is an expert in photovoltaics, e-mobility and storage technology. He built up the solar division at Schletter as part of the management team. In the meantime, he works as a consultant and gives lectures throughout Germany on topics related to renewable energies and electromobility.

The commentary is a guest article by Hans Urban. The article was also published in pv magazine:

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