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September, 2012
Smart Grids

Energy storage connected to wind power

The aim has been to produce a good basis for local electricity grid companies that are considering installing energy storage in their electricity grids. This is done by studying examples of business models, describe dimensioning criteria, economically compare the battery storage with alternatives solutions and provide suggestions for calculation and simulation tools for dimensioning.

Participant: STRI AB, Sweco Energuide AB, Falbygdens Energi AB, Göteborg Energi AB. Project manager: Pia Borg, Sciotech AB. 



Energy storage has features and applications that can enable further expansion of wind power in the local distribution grid. This report looks primarily at energy storage from a grid operator perspective and is meant to be used as an instruction for a possible purchase of an energy storage connected to intermittent production. The project studies a grid owned and operated by Falbygdens Energi (Feab) by measurements and simulations. 

The hosting capacity method is a way to quantify the impact of new consumption or production on a power grid. The hosting-capacity indicates the maximum amount of new consumption or production that can be connected without resulting in unacceptable reliability of power quality for other network users. It is possible to increase the hosting capacity by making changes in the network. Examples of such measures are to build new or replace existing lines or transformers, improve voltage control, connection of filters or energy storage. Which method can be used depends on the power system phenomena that limit the amount of wind power and on the structure of the grid. By studying the hosting capacity of a few different network areas and investigating the associated performance indexes, the amount of wind power that is possible to connect in an example grid is calculated and suggestions are given on how to design and dimension energy storage. Examples of performance indices are slow voltage variations, overloading, harmonics, flicker, rapid voltage changes, losses or the number of events in the network. 

Five different applications for energy storage are described in the feasibility study: increased hosting capacity, reduced costs, peak reduction, reduced losses and preventing power interruptions. Different applications put different requirements on the energy storage. Depending on the application, different storage technologies will be more or less suitable. The report therefore provides an overview of a number of energy storage solutions such as hydrogen storage in a fuel cell, pumped storage, compressed air, flywheels, super capacitors and battery storage. 

The project studied mainly lithium-ion battery storage in detail, because a smaller such installation is under evaluation in the same network as was used for the studies. To get a complete picture of the opportunities the storage provided for the grid operator, the report also describes alternatives to energy storage. The purpose is to give a perspective on what other options are available to a grid operator instead of an investment in energy storage. Six different options in order to increase the amount of renewable energy in the network are discussed: traditional network planning; reactive power control; curtailment of wind generation; demand response; dynamic line rating; and extension of permitted overload or overvoltage. 

Three locations for energy storage have been studied in detail. 1 – a distribution substation in a rural grid 2 – in close proximity to a wind farm and 3 – a weaker point further out in the network. For locations 1 and 3, calculations for the design of battery storage have been performed. The results from mapping of the network showed that overload is the main barrier in the network against the connection of more distributed generation in relatively strong points in the network. Therefore, the connections points have been studied mainly with respect to overload. For locations 1 and 3 also the influence of slow voltage variations have been studied, and the possibility of using the energy storage to reduce grid losses.

Dimensioning of battery storage was done for increasing the hosting capacity when overload was setting the limit. For connection 2 no dimensioning of the
storage was made as the storage size would have to be unrealistically big to make a difference. For locations 1 and 3 the battery storage was dimensioned
after the connection of 6 MW and 3 MW of additional wind. A storage installation to cover all the overloads would require unrealistically large batteries that often would be unused. Therefore a storage size was selected at a breaking point where further increase of the battery capacity only would have given smaller increase of captured energy from wind power. This result in the use of storage combined with spilling wind during long periods of high wind.

The benefits of installing the battery storage depend on the properties in the local grid. The results in this report suggest however that it is in general better to install the battery storage far into the electricity grid. In conjunction with a wind turbine, battery storage can prevent grid overload. This report has also shown that battery storage could partly compensate for its conversion losses by reducing the losses in the grid. It has also been shown that an increase in the hosting capacity using battery storage can defer other investments in the network.

The regulatory framework for energy storage is not entirely clear, but there are two possibilities for a network operator to use storage to streamline grid operations. Either can the network grid operator own the storage or the network operator can buy network services from the storage owner. In the second case, there are several business opportunities for energy storages owners. If the storage is owned neither by a network operator nor by a balance responsible party, the balance responsibility needs to be solved. There is, however, insufficient experience in this area, in order to make a proper judgment of the problems involved in storage. The need for balance responsibility can be an obstacle to cost effective operations. 

Two business models are used in the report to illustrate the economic aspects of the use of battery storage.; the owner is a network operator or the owner is a supplier with balance responsibility. The business model “Balance power” includes the purchase and sale at the Nord Pool Spot market, where the cost of the storage losses are included in the model. The battery is charged and discharged on hourly basis and the storage is cycled once per day. The business model “Grid owners” uses the storage primarily to increase the hosting capacity limit and therefore is cycled in association with the occurrence of overload. The simulations do not include any financial estimates or assumptions on the benefits for the network from the energy storage. 

For both business models simulations true historical spot prices from 2011 have been used. The result would also most likely be very different if one
simulated the storage for other applications or other business models. When energy storage is still in the research and development phase, it is natural to get high investment costs Low intra-day variations in spot prices at Nord Pool Spot further contribute to that energy storage is currently not a profitable investment. The report indicates, however, that there is a slightly greater opportunity for profitability with the business model Balance power than with the business model Network owners.

The estimated investment cost of business models form the basis for a general comparison of battery storage, other energy storage solutions and alternatives to energy storage. Various calculations are presented to show the economic difference between investing in battery storage, hydrogen storage with fuel cell or traditional grid planning. Investing in battery storage or hydrogen storage is a more expensive solution than traditional grid planning. However, one should take into account that energy storage has some advantages that are beyond traditional grid planning, for example, the ability to smooth and balance the wind power’s intermittent electricity or serve as backup to the local system. You cannot only look at the investment cost of what each solution entails, but also at the desired functions in the grid.

From a network operator’s perspective the easiest solution today is probably curtailment agreements with wind power producers. It is rare for maximum wind production to occur in combination with low loads. During the few times it does occur in a year, one should be able to steer back production, which provides the lowest cost of investment out of these options. However, the power electronics in the charger for electric vehicles or inverters for motors in the future lead to problems in the network. If resonance problems occur in the network due to dynamic loads, reactive power compensation alone does not solve the problem. It might even exacerbate the problem. Battery storage coupled to a damping controller of the type STATCOM, called E-STATCOM, may then be necessary to stabilize the network.

Upon further expansion of wind power and facing an impending investment in the grid, there are some questions that should be asked. What problem in the
network has to be solved? Is it to provide good continuity of supply to the customers? Or store wind power in storage to avoid spilling it? Is it perhaps to
deliver electricity of sufficient quality? Or is there some other reason? One question that is not investigated here is who should take the costs of grid
improvements needed in integrate wind power. Is it the network operators, wind power owners or the community in general that have to pay for necessary future investments?

Comment by Lars-Eric Andersson, CEO Falbygdens Energi Nät AB (Fenab) ”For the pilot study, I note that it is not the grid owner who benefits from energy storage but possibly the producers, the balance responsible or electricity service provider that can buffer and sell at better price at a later hour. A benefit of energy storage to a grid is to improve power quality, the cause of such harmonics normally originate from the different customers equipment and is the customers responsibility to not pollute the grid.” The problem in the studied locations 1 and 3 will Fenab resolve by agreements with the wind power owners: the use of curtailment of production during the hours when overproduction occurs.