By Andrew Crossland, Research Analyst, Dufresne Research
In June 2012 delegates gathered in Rome for the 5th Energy Storage Forum and saw more than 40 presentations by high profile speakers from Europe, the US, China, and India. In attendance were utilities, network operators, manufacturers, consultancies, universities and government departments – all wanting to learn about the value of energy storage in the future electrical systems.
Day 1 opened with speakers from EDF and ENEL. Both speakers highlighted that network operators are actively evaluating the value of energy storage. As EDF reported, flexibility is needed in the electrical system to match generation to demand. Storage is “one of the solutions to provide this flexibility”. The storage agenda is particularly important at the moment given the low carbon agenda and the challenges to the electrical grid in accommodating more and more intermittent renewable energy. Indeed, the increasing amount of solar energy has been the catalyst for the installation a number of pilot storage projects by ENEL, an Italian utility. These battery systems are being used for power and voltage control on the primary substations on the Italian mainland- allowing assessment of real benefits.
This approach is not just limited to Italy and two presentations in the afternoon discussed other pilot projects – E.ON is involved with battery and power to gas projects in Germany and there are large scale battery systems in China. As discussed by the speaker from EGL Italia (who is also a representative of AIGET), these pilot projects are vital in understanding the potential (and therefore business case) of energy storage in the electricity industry. However, two factors are inhibiting development of storage. Firstly, conflicts in the current regulatory system mean that a network operator can only obtain benefits from the ancillary services, and cannot gain revenue from electricity market participation. Although as discussed below, arbitrage revenue may fall in coming years. Secondly, the speaker was critical of the approach taken by TERNA (the Italian grid operator) for evaluating storage benefits because unfair assumptions are being made with thermal plant alternatives in the cost benefit analyses.
Day 2 of the Energy Storage Forum began with a presentation about regulation by a Green Technology Policy Advisor with the French Ministry of Environment and Energy. This echoed concerns about managing intermittency of renewable energy, in particular given that “in Europe we are used to having a very high availability of electricity” and people are not able to “accept that they [could] have less reliable access to energy”. Accordingly, France is currently operating a number of storage pilot projects. But the key challenge is seen in support a business model for wide scale adoption of storage in a way which doesn’t increase the consumer bill.
Within the context of managing renewable energy, TERNA, one of the largest transmission companies in the world, introduced some stark realities about the growth of solar in Italy. In recent years, over 12 MW of solar panels have been installed in Italy which is causing reverse power flow across substations and congestion in the network. To mitigate these issues TERNA plans to invest more than €2.5 billion over the next five years to develop transmission infrastructure and to install distributed storage.
This striking presentation was followed a look at different energy storage technologies. Established systems were discussed including batteries, compressed air and pumped hydro. For example, the presenter from Statkraft discussed the potential of Norway to act as a “European Battery” with the conclusion that although there is an inherent capacity in Norway, this would require large investments in interconnector cables.
Time was also taken to study innovative technologies such as the “energy bags” presented by a senior professor from the University of Nottingham. The “Tech Soap Box” feature in particular allowed an introduction to some of the innovative ideas for solar energy, compressed air and hydraulic hydro storage. Sergio Koren from Arothron, who introduced a new sub-sea compressed air storage technology, was voted the winner of this session and Koren will present his idea with an expanded presentation at the 2013 Energy Storage Forum in Germany.
With such a range of technology options for energy storage, there is a key challenge in choosing the correct technology mix, as discussed by a leading storage blogger from Fefer Petersen. This was particularly eye-catching he described the amount of minerals we will need to build sufficient battery energy storage capacity. Although Sandia estimates that the US will need 1.4 TWh of storage there is only sufficient global lead reserves to build 2.95 TWh at a market value of $450 billion!
Day 3 opened with a keynote address by the CEO of UK Power Networks. This highlighted that storage is an important future technology as UK distribution companies move from a “fit and forget” to a “fit and flex” smart grid. Distribution operators in the UK cannot directly benefit from electricity price arbitrage under current regulation and so other benefits need to be evaluated. Understanding these other benefits may be particularly important (according to a discussion by the Brattle Group in the pre-forum workshop) because revenue from electricity price arbitrage is likely to fall as more renewable generation and storage is installed- indeed negative price signals have already been seen in Germany.
The final presentation of the conference was delivered by DONG Energy, a company heavily involved in a Danish network famous for its high amounts of wind generation. Since the penetration of wind is continuing to grow, additional storage will be needed in Denmark by 2020 beyond existing Nordic hydro reservoirs. To achieve this however requires a business case, and an understanding of the value of storage in different parts of networks. As frequently discussed by the conference speakers, the benefits of storage are often application and location specific.
It is clear that more work is needed to allow wide scale adoption of energy storage. To this end, the 5th Forum culminated with a session where conference delegates were asked to “Build An Action Plan” with a step by step guide for a specific number of issues chosen by the participants. These topics, and the responses generated are made available every month on the Energy Storage Forum LinkedIn group. Should you want to take part in it and offer your “action plan” suggestions join the group with over 2000 energy professionals from around the world.
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