As the energy transition unfolds, energy storage is capable of being a critical connecting piece not just on a technology level to enable cleaner, reliable, low-carbon energy networks, but also connecting energy assets to the market opportunities that will make the transition to renewable energy an economically feasible one.
We speak to Wärtsilä’s Jeff Damron about the ways that the value of energy storage can be realised in markets across the world, both today and in the future.
Jeff is Director of Business Development & Proposals, Energy Storage & Optimisation at Wärtsilä Energy. He has been in the energy storage space for around a decade, as he puts it, supporting business development activity for utility-scale projects and commercial behind-the-development, in other words, working “across all scales except for residential”.
What are some of the main challenges your customers find in using their energy assets to earn money or save costs on energy and what strategies and technologies do you use to help them to meet those challenges?
We help customers to adapt to very ‘esoteric’ market and regulatory rules and requirements, by enabling them through our digital energy platform, which we call GEMS. While there's a lot of commonality, the devil is in the details at each individual market level.
It's about having the technology platform to deliver the benefits and to have the ability to adapt at the level of the specific market, to operate optimally. We've got the technology platform that can be applied around the globe and we have the ability, knowledge and experience to implement the market-level rule set to deliver on the value-stacking business case opportunity.
I think the term ‘future proof’ is much overused, but it's an applicable term in terms of being able to address future opportunities.
As the value stack evolves, a big part of this industry is looking ahead at what is what is opening up in terms of regulatory and market mechanisms to enable really maximising the value of the asset base, obviously, energy storage being a key element to that.
Could you offer some specific examples where a customer in a major or emerging energy market opportunity was made able to participate thanks to your services and products?
We have two 50MW systems that we’re deploying for Pivot Power in the UK and those projects are providing balancing services into the UK grid. Frequency response, market trading and reactive power services are all part of their overall strategy to utilise storage to enable you know, electric vehicle (EV) adoption on the UK grid. We're enabling both an economic opportunity but also the opportunity to support the needs for the grid to support EV charging infrastructure, which is part of Pivot Power’s strategy and programme.
We've got another project in Krenzel, Germany. Our control platform is managing a 22MW battery storage system that is managing wind and storage providing primary control reserve (PCR) capability and reactive power to the German grid. So it’s frequency regulation, grid-balancing and energy shifting and participating in the German Primary Frequency Regulation (PRL) market to provide stability in terms of optimising the wind assets under management.
In a project for utility Duke Energy in the US, we’re using our GEMS control platform to manage multiple distribution-based energy storage sites and they’re providing locational capacity benefits for Duke’s distribution grid. But it also means Duke is utilising our platform to enable future market participation opportunities that they see in the local network operator MISO’s market, as a value stack emerges through rule changes. That's a good example from a future-proofing perspective that they've got a vision that means assets are providing the primary benefit, but there's future benefits to be enabled going forward through our control platform.
Being competitive and establishing a long-term view of asset optimisation
A lot of discussion at this year’s Energy Storage Summit hosted by our publisher Solar Media in February focused on revenue stacking opportunities in the UK — providing multiple applications for multiple revenue streams, sometimes simultaneously. What are the best ways for battery storage owners to be competitive in providing these services?
Having the ability to adapt your control platform, your assets into an evolving strategy that takes advantage of the value stacking opportunities as they are realisable, over time. Today the value stack might include one or two elements, but in the future, it could change completely. Going from ancillary services to capacity market opportunities is a common evolutionary approach in markets and having the ability to adapt to that opportunity is critical.
I’d say there’s three layers to delivering on the benefits: there’s the physical assets, the asset controls — the digital energy platform; and then there’s markets integration. It's a question for the developer community to evaluate what the partner mix is across those three layers that can best manage the opportunity today and in the future. And there's a question in terms of how they want to go about putting those pieces together.
You can do that from a ‘pieces and parts’ perspective: to have a separate provider for the energy storage platform, control platform and then a market integration partner, which is likely to not be the most efficient way to do it. Or you can look at a provider that can provide most if not all those three layers. A partner like Wärtsilä is able to do that. That's where we can deliver value in the market: through our ability to really cover all three of those layers.
For Pivot Power, we’re working to cover all three layers. With 10-12 years experience of delivering value with the energy storage platform, we’ve got a control platform that is widely supporting most if not all of the realisable benefits for energy storage. It’s a mature platform and there’s been many years of storage integration with the grid, with renewable assets, supporting market level integration; both on an independent power producer (IPP) perspective and directly with utilities.
It’s a long journey in terms of building up the capability and delivering value across a broad set of applications. As markets advance and mature, we're advancing and maturing too. We’ve been integrating PV with energy storage for 10 or 11 years, so a lot of experience has been built up across a broad asset base of battery technologies, inverters, and so on.
It can be difficult to take a long-term view over what an energy storage asset might be doing over its lifetime to earn revenues or save a customer money — what should they think about that can help them maximise the value they will get from their system over an extended period?
Plan ahead and work with a partner that can meet today's needs, and has the ability to provide value as the revenue stack evolves, through a flexible control platform that will enable some upfront planning and provisioning as well as the flexibility to adapt.
There's design elements, for example, that you can incorporate into a system that will allow you to possibly expand its capacity in the future. You can provision today to expand your system for future benefits.
That's on the physical side, but then there's obviously having the ability to adapt the controls on the digital side. You could be operating for an ancillary services requirement today, but upgrading and updating so that you can support capacity needs in the future. If you have that kind of roadmap in your plan, you can design a system that anticipates that.
Maximising the value of storage is occurring in stages and phases in different markets and advancing at different rates in different markets. The critical element is that storage has a lot of potential benefits that it can provide to the grid.
Projects today are typically always associated with some form of performance guarantee, and long-term performance requirements that are built into contracts. But if there’s material changes to the operating requirements for a system, you’ve got to have the flexibility to do that. There may be some opportunities that emerge that you haven't anticipated that could add serious value to the system.
Cover image: Rendering of one of two 50MW projects in the UK that Wärtsilä is working on with Pivot Power. Image: Wärtsilä
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