Strategic insights on electrical and mechanical energy storage. VTT Technical Research Centre of Finland Ltd

Strategic insights on electrical and mechanical energy storage VTT Technical Research Centre of Finland Ltd

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Practicalities of the webinar All attendees join muted Please ask questions via the control panel Moderator will address the questions to presenters in Q&A Having problems with audio? Please use high-wifi or hardwire Please use a headset to optimise Make a phone call: Toll dial-in numbers in the invitation (standard long-distance charges) Presentation material A follow-up email will be sent with presentation material included 4

Contents 1 Intro 2 3 4 5 Energy storage: why do we need it System integration: what are the benefits Energy storage technologies: from today to tomorrow Wrap up and conclusions 6 Q&A 7 Poll questions & answers 5

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Introduction PRESENTERS Kari Mäki Research Manager Robert Weiss Senior Scientist Ville Erkkilä Research Scientist 10

Current status of storage in energy systems 12

Current status of storage in energy systems 13

Challenges in matching generation and consumption 14

Evolving markets for flexibility Fingrid reserve types 15

Drivers for storage units in flexible energy systems Amount of intermittent RES generation Storage enabling more efficient integration Need for better service reliability Avoiding service interruptions Improving customer power quality Amount of electric vehicles Potential for smart charging and vehicle to grid (V2G) integration Customer-level applications Economical use of dynamic tariffs Optimization of microgeneration Microgrids and local back-up power 16

Storage in energy system Hours Minutes Seconds Milliseconds Customer energy optimization Li-Ion Ni-Cad PV output smoothing Flywheel Customer power quality improvement Small-scale island operation Lead-acid Supercapacitor NAS Gusty wind output power smoothing Vanadium redox Network power quality improvement SMES Large-scale island operation Pumped hydro G G HV/MV AC Power Smoothing AC/DC Generator transformer DC circuit power Smoothing DC/AC MV network power quality MV/LV LV network power quality / LV network island operation Customer meter Customer power quality AC/DC DC power smoothing Customer energy optimization PV unit Customer network 1 10 100 1000 10000 100000 Storage capacity kw 17

Ancillary services built on flexibility Participation on energy markets optimization based on arbitrage and price differences System services through reserve markets or direct service agreements (fast reserves, frequency control, virtual inertia, etc.) Balancing services for smoothing energy balances and profiles (balance responsible parties, energy producers, big customers) Ancillary services for local network (voltage control, quality improvement) Services for individual customer customer s own preferences for energy management Aggregator models for combining multiple small storage units as a bigger entity Potential can be found when building a portfolio combining different service types 18

Portfolio providing multiple services 19

To summarize Different system levels, different applications, different needs, different storage technologies Energy system facing challenges such as wide-scale renewables Increasing need for controllable flexibility in energy system storage is good means for providing it Future value is increasingly around timing of power instead of energy Aggregating small storages into larger entities is promising solution 20

Value of Mobile Battery Energy Storage Li-ion battery market Year 2000 2016 2025 Volume (GWh) 2 78 210 Value (billion $) 4 20 48 Main applications 99 % portable electronics 43 % EVs 40 % electronics 50 % EVs 26 % electronics Small EV market in the automotive world represents a huge market for batteries 22

Key grid challenges Security of supply o access, and operation reliability/security Reserve provision o mitigation of imbalances of load/generation Voltage control o maintaining proper voltage levels and phase balance Current congestion mitigation o overloading of network element Transformer, line or cable 23

Use Cases of a Battery Storage System level Inertia Primary Reserve Secondary Reserve Tertiary Reserve Predefined reserve products Offered to transmission system operators (TSO) ~5s 30s -180s Event 15min - 60min Small national markets or compensation schemes (1) Reserves activated by changes in grid frequency Dedicated local controller I. Inertia replacement: Ultrafast Frequency Control (NEW) II. Primary Reserve: FCR-N, PRL Primary Reserve: Control actions (2) Reserves activated by remote signal from TSO III. Secondary Reserve (automatic): A-FRR, SRL IV. Tertiary Reserve: M-FRR, Minute Reserve 24

Battery energy storage as system level resource DRIVERS Inertia is decreasing in the power system Due to inverter connected new production units, such as wind turbines and solar PV Need for low-co2 balancing power Battery solutions for mobility Second life solutions for used battery Slow progress for many other energy storage or flexibility solutions RISKS Battery solutions still cost too much, and are too resource intensive A lot of hype around energy storage can create kick-back if the promise does not hold over longer period Battery Energy Storage will not be a Mid-term or Seasonal-level Energy Storage Option Over capacity in renewable production could give better return 25

Use cases of a battery storage Local level Peak demand control Reduction of peak consumption and peak production Power flow through transformer To meet needs from (increasing trend!) PV solar production Electrical vehicle charging peaks Zero load provision State of local network is close to an island Minimal power flows through the transformer Battery reacts to transformer measurements 26

Use cases of a battery storage Local level Reactive power compensation Voltage support Safety function running in the background Activated in occurance of under/over voltage detection, Also activated on demand from other controls Adjusts active and reactive power in injection or consumption direction Fault ride through Safety function running in the background Activated for supporting network stability in case of voltage dip 27

Optimal control of local storage in distribution system management BESS can serve power grid in voltage control using reactive power Control efficiency much higher with many small units vs one large, as reactive power is not easy to transmit On-going project Electra (http://www.electrairp.eu) Reactive power control does not have to conflict with normal storage charging and discharging use (active power) 28

Battery energy storage as local resource DRIVERS High cycle performance + promise of new battery technologies low /kwh levelized usage cost Self-sufficiency life style because of solar energy and rising power grid interconnection costs Critical infrastructure needing reliable power e.g. data centers, communication systems increasing in amount, power quality need RISKS Promise of new technology maybe does not fulfil the expectations e.g. cycle promises for batteries etc Taxation schemes attack people that have off-grid power systems look at e.g. Spain Energy may become too cheap due to renewables, no sense for local storage probably not: power quality issues 29

Li-ion battery cost Li-ion battery pack cost for electric vehicles has dropped 14% annually between 2007 and 2014 At $150/kWh Li-ion becomes competitive at $2/gallon gas Electric vehicle can be competitive already now Fully electric city buses The viable option, Pihlatie, M. et al. 2014. IEVC Nykvist, B. & Nilsson, M. 2015. Nat. Clim. Chang. 5(4), 329 332 31

Available battery technologies Lead-acid (90% market share) NiMH Li-ion Lithium-ion battery cathodes LiCoO 2 (LCO) LiNi 0.8 Co 0.15 Al 0.05 O 2 (NCA) LiNi 1/3 Mn 1/3 Co 1/3 O 2 (NMC) LiMnO 2 (LMO) LiFePO 4 (LFP) Lithium-ion battery anodes Carbon Carbon-silicon alloys Li 4 Ti 5 O 12 Pillot, C. 2017 32

Emerging technologies Li-ion R&D going on for more than 35 years Li-S and solid state batteries to mature in 10 15 years Metal-air batteries not seen to be maturing within 15 years Visual Capitalist 2017 33

Li-ion battery performance Battery characteristics are non-linear functions of multiple parameters Lifetime estimation is very demanding due to complex, path dependent aging patterns 200 180 LFP 1 LFP 2 Energy density [Wh/kg] 160 140 120 100 80 60 40 LFP 3 LFP 4 LFP 5 LFP 6 LFP 7 LFP 8 LTO 1 LTO 2 LTO 3 LTO 4 LTO 5 Capacity [Ah] 20 0 0 500 1000 1500 2000 Max power density [W/kg] LTO 6 NMC 1 NMC 3 LMO/NMC 1 NCA 1 Cycles 34

Energy storage technologies research 1. Experimental research on cell, module, and pack level Energy storage performance and lifetime testing, test methodology Impact of environmental conditions 2. Design tools Electrical and thermal modelling Battery safety Lifecycle management, estimates, diagnostics Techno-economic evaluations 3. Energy storage systems and applications Battery management system (BMS) development Concepts of thermal management Technology choices and dimensioning 35

Electrical and mechanical energy storage System integration Large benefits for local energy system Quantifying the benefits on system level Local: from consumerism to prosumerism Integration of electric vehicles Storage development Battery prices are dropping fast Some applications are competitive now Biggest growth and investments are in Li-ion Li-ion technology continues to improve incrementally Future Need of controllable flexibility increases New value chains and business models building on system services provided by storage units Aggregation of small storage units into bigger entities 37

Partnering for success VTT partners with innovative companies to help in development and commercialization of energy storage solutions Value propositions: Ensure availability Manage complexity We work with all stakeholders 38

Contact us! Kari Mäki Research Manager kari.maki@vtt.fi +358 20 722 7035 Robert Weiss Senior Scientist robert.weiss@vtt.fi +358 20 722 6233 Ville Erkkilä Research Scientist ville.erkkila@vtt.ti +358 40 151 9942 Matti Paljakka Sales Manager matti.paljakka@vtt.ti +358 20 722 6423 40

Read about our RESEARCH RESULTS: www.vttresearch.com/services 41 41

Poll questions & answers 43

Poll questions & answers 44

Poll questions & answers 45

Thank you! www.vttresearch.com #VTTpeople, @VTTFinland