Case study: Utility-scale battery for balancing power in Germany

Transcription

1 SA Energy Storage 2017 Case study: Utility-scale battery for balancing power in Germany Johannesburg, 28 November 2017 Dr. Tobias Bischof-Niemz

2 Agenda Overview ENERTRAG Definition Primary Control Reserve German market for Primary Control Reserve Business Opportunity for Batteries 2017/12/05 2

3 Agenda Overview ENERTRAG Definition Primary Control Reserve German market for Primary Control Reserve Business Opportunity for Batteries 2017/12/05 3

4 ENERTRAG is an innovative renewables IPP First turbine erected Own 110kV feed-in grid First Powerto-H 2 in EU 520 turbines erected electricity for 1,4M people Hydrogen injected in gas-grid 40 turbines erected ENERTRAG founded Power sold to market 600km of own RE grid 3000 MW wind in operation ENERTRAG MW wind developed, 700 MW wind in ownership, 3000 MW in operation in Germany and France; 500 employees in Germany, France and South Africa 4

5 Offices Dauerthal, Leitwarte In total 500 employees work at ENERTRAG along the entire value chain International France, Cergy South Africa, Cape Town

6 Example: ENERTRAG hybrid power plant 7 40 x 40 km 7 > 400 MW wind km feed-in grid 9 Substation to TSO kv 8 10 P-to-Heat (planned) 220 kv 9 Sources: ENERTRAG; Alstrom; Toyota 6

7 Example: ENERTRAG hybrid power plant 1 Electrolyzer (0.6 MW) 4 Car fuel station (planned) 5 Telco stations 6 Biogas plants 2 H 2 in gas network x 40 km 7 > 400 MW wind km feed-in grid 9 Substation to TSO 3 Fuel station (planned) kv 8 10 P-to-Heat (planned) 11 Battery for primary control & black start (planned, 22 MW) 220 kv 9 Sources: ENERTRAG; Alstrom; Toyota 7

8 ENERTRAG s Hybrid Power Plant Natural Gas Grid (up to 2% allowed)

9 ENERTRAG s Hybrid Power Plant Commissioning 25 October 2011 Sod turning 21 April

10 Agenda Overview ENERTRAG Definition Primary Control Reserve German market for Primary Control Reserve Business Opportunity for Batteries 2017/12/05 12

11 Reserves needed in the event of a failure Reserves kept available in standby as small energy junks in case something happens to the supply/demand balance; can provide energy to restore the imbalance only for short periods of time Positive Reserves (battery: discharge) Negative Reserves (battery: charge) Source: /12/05 13

12 Primary Control Reserve (PCR) Primary Control Reserve (PCR) has to stabilise network frequency after a failure event as fast as possible Total demand for PCR in the interconnected European power system is ca MW ENTSO-E (association of European Transmission System Operators) determines the required PCR for the interconnected European power system on a quarterly basis PCR currently dimensioned such that it can stabilise the grid after the simultaneous loss of the two largest units in the interconnected European power system The two largest units are currently nuclear units with ca MW each PCR is activated in a non-selective manner from the total interconnected European power system Possibly arising load flows are taken into account by safety margins when crossborder network capacities are calculated 2017/12/05 14

13 Restoration after an incident Source: /12/05 16

14 Agenda Overview ENERTRAG Definition Primary Control Reserve German market for Primary Control Reserve Business Opportunity for Batteries 2017/12/05 17

15 Common tender platform for PCR in Germany

16 Auction system for PCR in Germany PCR is procured in weekly auctions by the TSOs of the participating control areas Since January 2017, the auction is cooperatively run between the German, Belgian, Dutch, French, Swiss and Austrian TSOs Roughly 1400 MW of PCR is procured every week, of which MW is usually awarded to PCR providers in the four German control areas Only pre-qualified entities are allowed to participate in PCR auctions Pooling of pre-qualified assets is possible Individual participants must not offer less than 1 MW of PCR capacity If awarded, PCR provider must keep tendered capacity in MW available the full week Dispatch of the capacity happens automatically and de-centrally Proportional controller at the PCR asset: deviation from set point grid frequency leads to proportional increase/reduction of power output of PCR asset Source: /12/05 19

17 Three different reserve products procured 2017/12/05 20

18 PCR: very small market relative to power system Revenues in the German power system in 2016 in billion 67.1 Grid and Customer Services Generation Includes 20 billion per year historic cost for first expensive solar PV and wind plants ( school fees ), payable until roughly 2030 million Other system services (SCR, TCR, re-dispatch) System Services 2.2 PCR Total electricity available for distribution: ca. 550 TWh in 2016 (2.2 x South Africa) 2017/12/05 21

19 e Demand for PCR is not driven by renewables Power generation capacities from variable renewables (VRE) in Germany in GW and primary control reserve (PCR) requirement in MW PCR requirement Wind onshore 84 Wind offshore 77 Solar PV Relative penetration in South Africa today Sources: German Federal Ministry for Economics and Energy

20 Batteries perfectly suited to provide PCR Historically, gas- and coal-fired power stations provided PCR, this is still the case in South Africa. PCR is provided by keeping extra steam pressure available on demand The technical specifications for the product PCR were mainly written around the technical capabilities of these power stations With batteries, the technical specifications can be re-thought, because batteries are orders of magnitudes faster than conventional plants A battery can ramp from zero to full charge or from zero to full discharge in a matter of ms This is particularly relevant in future low-inertia power systems with high penetration of VRE Source: /12/05 23

21 Allowed State-of-Charge space when on PCR An asset that participates in PCR is on standby most of the time If dispatched, it currently needs to have its full power available for 30 minutes This requirement determines the allowable state-of-charge space Battery capacity in the green area can be used for use-case-stacking A reduction of requirement to 15 minutes would increase option space Source: /12/05 24

22 Agenda Overview ENERTRAG Definition Primary Control Reserve German market for Primary Control Reserve Business Opportunity for Batteries 2017/12/05 25

23 PCR price stabilised at ca /MW/week Results from the weekly auction for PCR by the German TSOs /MW/week Average weekly price PCR Rolling 12-month average Source: /12/05 26

24 High-level Business Case: close to break-even Assumptions Battery size: 20 MW / 20 MWh / Li-Ion batteries with 1C Turnkey EPC cost (CAPEX): 12 million Operations and Maintenance: 4% of CAPEX per year = 0.5 million per year Economic lifetime: 10 years Discount rate: 8% Annualised CAPEX: Operations and Maintenance: TOTAL annual cost: 0.5 million per year 1.8 million per year 2.3 million per year Potential annual revenues: 2400 /MW/week x 20 MW x 52 weeks/a x 80% = 2.0 million per year Almost at break-even for PCR alone; better with use-case stacking and further cost reduction 2017/12/05 27

25 Summary Batteries make commercial sense today for provision of PCR in Europe The need for PCR & the battery business case is not driven by uptake in renewables Significant uptake in German renewables in the last ten years did not increase PCR requirement Batteries start to make economic sense today for PCR because of the cost reduction that happened simultaneously to the renewables uptake correlation, not causality! The PCR market however is relatively small and will be saturated very soon Considerations going forward Change from weekly to daily auctions for PCR would allow better use-case stacking for batteries Shorter PCR provision periods (30 minutes down to 15 minutes) would reflect the technical characteristics of batteries better and suit them as very fast provider of fast reserves Alternatively, a new product between PCR and physical inertia could be introduced, which batteries could supply Use-case stacking will improve the business case for batteries beyond the provision of PCR

26 Ha Khensa Re a leboha Siyathokoza Enkosi Thank you Re a leboga Ro livhuha Siyabonga Dankie Note: Thank you in all official languages of the Republic of South Africa