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How battery storage can bring flexibility to the power grid

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Flexibility in the power grid is indispensable for successfully mastering the energy transition. In the context of the German energy system, this means that both the power grid and the electricity market have the ability to balance fluctuations in the demand or supply of electricity, thus guaranteeing the stability of the power supply and hence security of supply. Both temporal and spatial capabilities for balancing imbalances between generation and demand are considered.
Battery storage plays an essential role in providing flexibility. Despite the high demand, storage technologies in Germany are not yet ideally integrated into the grid, which means that their potential cannot be fully exploited.

Status quo: How and where is battery storage currently being integrated into the power grid to provide flexibility?

Battery storage is an essential element for maintaining system stability. Due to their high dynamic controllability, battery storage systems can already be used in various application scenarios. They are an essential component for taking over voltage and frequency control of conventional, fossil must-run power plants and are used in particular for very fast balancing of the power grids (primary control power). From a network engineering point of view, the exact location of the grid connection is not decisive for the provision of balancing power, as long as the amount of power determined by the transmission system operator for the grid area is adhered to. In Germany, the demand is just under 593 MW, with a core share of 178 MW (as of 13.04.2023) always having to be provided within Germany itself. The rest can theoretically be imported. The location itself is not important, but an even distribution for the supply is desirable.

The same applies to the second major area of application for battery storage, electricity trading. Since the liberalization of the European electricity market over 20 years ago, all trading has been decoupled from the grids. This means that battery storage systems pay the fixed unit price within the German-Luxembourg bidding zone at all times, regardless of their location, and can only react to price signals that vary over time. Trading in electricity is not just a business area for speculators, but fulfils an important task, as it leads to price stabilization and thus to lower electricity costs for society as a whole (see our article on "Why battery storage systems reduce electricity prices"). However, it should be noted that regional shortages or surpluses in the zonal electricity system within bidding zones are not taken into account. According to European legislation, structural bottlenecks must not actually occur for the assumption to be justified. However, this is no longer the case in Germany with its sluggish grid expansion.  

The existing flexibility of battery storage systems can also play a key role in avoiding grid bottlenecks in order to reduce or even completely avoid them in the bidding zones. Just like generation plants, storage systems such as large battery storage systems must also be available for the redispatch measures of the transmission system operators. If these are strategically placed at grid nodes where grid congestion frequently occurs, they can even make a particularly effective contribution to avoiding congestion. In addition to normal redispatch measures, the storage systems can also function as consumers. In this way, large-scale battery storage systems can not only be throttled back to zero before bottlenecks like generation plants, but can also absorb surplus electricity. Once the bottleneck has been eliminated, the storage systems can feed this electricity back into the grid with a time delay.
Particularly in view of the urgency with which flexibility options are currently needed in the electricity grid, storage systems therefore offer an enormously important addition to grid expansion, which above all can be implemented much more quickly. This alternative is also extremely relevant from an ecological and social perspective, as the German electricity grid is characterized by bottlenecks on the generation side. This means that in the event of excessive electricity production, more renewables must be curtailed in order to ensure secure grid operation. At the same time, plannable (and therefore almost always conventional fossil fuel) plants elsewhere have to be ramped up to compensate for the deficit. This process increases theCO2 emissions of electricity production and also causes costs due to the necessary redispatch of the plants, which in turn are borne by society through the grid fees.

Why is the flexibility of battery storage in congestion avoidance considered often not yet properly used?

In order for battery storage to make the best possible contribution to the integration of renewables and avoid grid bottlenecks, it is necessary to explicitly build these storage facilities in the areas that are already under load today. From a technical point of view, they can have the greatest possible positive impact here and also accelerate the expansion of renewable plants through better integration. From a regulatory perspective, however, there are still a number of hurdles to overcome that are currently hindering the most holistic and sensible use of storage.
While German grid operators recognize the technical potential of battery storage for grid support and for improved integration of renewables, they fail to access storage flexibility. The reason for this can be partly derived from the purely cost-based German redispatch regime. The cost-based approach dictates that plants affected by redispatch must be neither better nor worse off economically as a result of the intervention. This logic worked well in the past when electricity costs could be evaluated by fuel costs and labor hours. For storage, however, the economic analysis is much more complex, since fluctuating opportunity costs must be used as the basis for decision-making. Since redispatch costs for storage are difficult to determine, grid operators currently refrain from using these resources at all due to uncertainties in cost measurement. Similarly, the procedural integration of storage into the existing congestion management of network operators is an enormous challenge. Due to the lack of 100% certainty on the part of the grid operators that storage facilities will actually behave in a grid-serving manner at times of highest grid load, they tend to grant grid access very restrictively. Viewing storage as an additional load on the power grid results in one of the biggest hurdles for storage projects - grid access. Grid operators must ensure that grid operation is possible at all times, which means that battery storage systems with their high outputs at locations at risk of congestion do not receive grid access. This is because these grid nodes are logically already under particular load as things stand today. And although storage could contribute to an important relief of the grids exactly here, they are often simply not placed at the right location from the point of view of congestion avoidance in order to enable the most sensible additional, regional flexibility.

Politicians are now also making clear demands for the provision of flexibility for the electricity grid, including through storage. As recently as March 15, 2023, the EU Commission made this demand very urgently to all member states in the new proposal for the reform of the electricity market design (see also our article "EU Commission publishes proposal for reform of the electricity market design - the changes and implications for storage"). They attribute a decisive role to storage technologies for the success of the energy transition. However, existing regulatory hurdles urgently need to be removed so that their potential can now also be applied.

What impact does storage actually have on avoiding congestion by providing flexibility?

In order to quantify the actual potential of using storage for congestion management in a scenario where regulatory hurdles have already been overcome, we analyzed publicly available data on congestion management in grid areas from northern to southern Germany. We found that storage at the affected grid nodes can lead to a significant reduction in local congestion management.
The analysis examined the feed-in management of four large distribution grid operators for the year 2022 and the reasons for this. The extent to which a storage facility would have helped to reduce or prevent these bottlenecks through a corresponding dispatch plan was then examined. In order to analyze the feed-in management, it was necessary to obtain more detailed information about the respective system. The market master data register was used for this data analysis, but it is still incomplete despite the obligation to register. As a result, all transformer substations in whose feed-in management entries less than 97% of the affected installations could be assigned were excluded. In reality, therefore, significantly more substations are affected by curtailment than can be seen in the graph; the figure only shows the part for which a meaningful statement is possible on the basis of public data.  

The area of the circles is a measure of the amount of electricity regulated. For better readability, an exponential representation was chosen instead of a linear increase, because in Schleswig-Holstein the feed-in management volume at a substation is on average higher by a factor of 20 than in Bavaria. Accordingly, a doubling of the area in the figure corresponds to a multiplication of the feed-in management, by a factor of 32. The color of the circles indicates the proportion of congestion that could have been prevented by battery storage with a fixed, currently typical plant size of 20 MW / 40 MWh. This is done by dividing the energy throughput of the storage based on dispatch by the amount of energy actually dispatched. Accordingly, a relative share of α=0.5 means that half of the congestion volume at the grid node in the simulation could have been prevented by the use of a battery storage system. Only the influence of the measure on the locally affected substation is considered.  

It has been found that providing storage is a very effective method, especially for supporting periods of short but significant power peaks. Here, battery storage can consistently prevent generation units from being curtailed. This effect already occurs in many regions in Germany where renewable energy sources are used, and is taken into account in grid planning through peak load disconnection. As a result, power grids with comparatively low generation bottlenecks are no longer expanded to the last kilowatt hour. This is because if the feed-in management is less than 3% of the annual energy volume, it is classified as so low that grid expansion is not an economically viable alternative here. In these regions, flexibility requirements can therefore also be expected in the long term as an alternative to peak capping. Due to the currently sluggish progress of grid expansion, a significantly higher demand can be expected in the medium term. Especially in the south, where congestion is mainly driven by photovoltaics, the relative effectiveness is thus particularly high, as visible in the graph. The green circles illustrate that the use of storage at this point could have contributed to a significant reduction or even avoidance of congestion.

In the wind-dominated north, on the other hand, the relative effectiveness is significantly lower in some regions. On the one hand, this is due to the fact that electricity generation from wind power significantly exceeds generation from PV, meaning that a 40 MWh storage system assumed for the simulation reaches its limits more quickly here (an absolute storage size was assumed for all grid areas). On the other hand, generation from wind power is also more continuous and less characterized by peaks.
Despite the lower percentage effect, the absolute benefit of battery storage in the north is very high when used to avoid bottlenecks and is also currently very useful here.
The analysis makes it clear once again that additional grid expansion is essential in regions with continuous generation and, in particular, chronic grid expansion delays. The sole use of storage systems would make less sense here, as other factors must be taken into account that have a significant influence on the economic efficiency of the system. A battery storage system that is used exclusively to avoid energy bottlenecks is currently not economical and would therefore not be built. Battery storage systems should therefore be installed here as a supplement, as the need for flexibility becomes particularly clear once the grid has been expanded.

The shutdown of renewable energy plants due to a lack of flexibility in the power grid can be clearly titled by the analysis. The most affected wind power plant was shut down on a total of 75 days per year, cumulated over the shutdown periods. The most affected PV plant was even affected on 84 days, and the top biomass plant was affected by feed-in management on a total of 238 days. Feed-in management for PV and wind plants is particularly annoying because, unlike biomass, no fuel is saved. Instead, the electricity is simply not generated, even though the opportunity existed in the situation.
The sensible placement of storage could have made a significant difference, both environmentally and macroeconomically, for the generation plants affected.


Due to the lack of flexibility in the distribution grid and the slow progress in grid expansion, curtailments of generation plants are currently often the only option to keep the power system in balance. Creating flexibility in the power grid is therefore becoming increasingly important as the share of renewables advances. Storage facilities offer an opportunity to help ease the load on the power grid in the short term and thus enable the accelerated expansion of renewables. They can be seen as a supplement to grid expansion, because they can be built much faster in comparison. Due to their high capacity, battery storage systems offer a good opportunity to absorb short-term peaks. Due to their flexibility, they can also focus on other business models after grid expansion. In order for storage facilities to offer this flexibility in the best possible way, it is necessary to develop sensible concepts for implementation. From a technical point of view, there is already nothing to be said against their use today; however, as shown, storage facilities are not yet being used in the right place for this purpose. Kyon Energy is working towards creating a suitable regulatory framework so that storage systems can also be used to reduce the curtailment of renewables in practice and maximize the economic benefits.  

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