This Friday Briefing takes a look at how residential battery storage and other DERs can be a force for the greater grid.
You may recall a couple of weeks ago that we looked at European battery storage installs during 2023, thanks to work from analysts at LCP Delta, published by the European Association for Storage of Energy (EASE).
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One remarkable takeaway, apart from the fact that, with 10GW of installations, it was a record-breaking year for Europe’s industry, was that the market was split roughly 7:3 in favour of residential battery storage versus utility-scale. Meanwhile, commercial and industrial (C&I) remains a small wedge between those two segments.
Yesterday, we reported on figures from Australia researched and analysed by consultancy Sunwiz. As the name suggests, Sunwiz specialises in solar PV but, like many others, has branched out into energy storage over the past several years.
Like Europe – and the US – the Australian energy storage market had a record-breaking 2023. Sunwiz described it as the ‘year of the big battery,’ with around 1.4GWh of grid-scale storage deployed and a mammoth 12GWh under construction at the end of December.
In the medium term, it looks like the rest of the 2020s could even be the ‘decade of the big battery’ in Australia, but the Australian Energy Market Operator (AEMO) has modelled that into the 2030s, residential and other distributed installs will take over. Residential was no slouch in 2023 either, with more than 650MWh of installs, including retrofits at existing PV systems.
Indeed, with Australia’s rooftop solar PV market among the biggest in the world, certainly in terms of per capita adoption rates, it is both logical and yet still a little bit surprising that of around 6GWh of batteries installed to date, a slim majority of that cumulative capacity comes from residential, 46% to utility-scale’s 44%.
Back in 2015, it was predicted that distributed solar PV would “eat the lunch of large-scale PV” in Australia, Sunwiz CEO Warwick Johnston tells Energy-Storage.news: “which it has.”
Johnston predicts distributed storage will do the same.
“It might be that there are some years of stimulated development coming and a huge pipeline as well [of large-scale battery storage]. But I think there’s going to be a lot more distributed storage because the economic risk is so low, and consumer appetites and benefits from those batteries are even decoupled from the pure financials as well,” Johnston says.
“We’ve got a window of time where there’ll be a lot of rollout [of big batteries] before it probably settles, swinging back towards the distributed scale.”
It’s interesting to think of what the potential of those home batteries could be. If we broaden out the conversation to include other distributed energy resources (DERs), such as home EV chargers, home solar PV, heat pumps, and more, aggregation into virtual power plants (VPPs) becomes an interesting proposition.
Once these DERs reach deployment levels comparable to or exceeding grid-scale resources, they could offer comparable energy and power services to large-scale resources but may have the advantage of being placed on the distribution grid.
Yesterday, our colleagues over at PV Tech reported on a new study on California from a US-based consultancy, The Brattle Group. Commissioned by non-profit group GridLab, it identified the strong potential for distributed energy resources (DERs) to help manage peak demand on the grid.
By 2035, VPPs could provide around 15% of peak load, equivalent to more than 7.5GW of power. In the process, this aggregation of DERs could save California consumers around US$550 million a year, and around US$750 million annually in costs of managing the electricity system, according to Brattle Group.
This builds on a previous report by the consultancy which look at the whole US, finding potential cost savings of up to US$35 billion for utilities over the next decade, if 60GW of DERs were to be aggregated into VPPs.
That said, it’s been a slow ride so far for the uptake of residential VPPs, and this writer’s own early-career enthusiasm for the model has been somewhat tempered in the years since first penning a feature article on the subject in 2015.
In Australia, around 14% of home batteries are aggregated into various VPPs around the country, which sounds like a relatively high number compared to other markets, but Warwick Johnston and Sunwiz think it could be much, much better.
As we’ve heard many times around different DERs aggregation models, customer acquisition is the trickiest part. That’s true also for vehicle-to-grid (V2G) which is another technologically enticing way to repurpose individual resources into something much greater than the sum of their parts.
“The challenge there is that people, having invested all this money in their own power independence, are reticent to hand it back to the network,” Johnston says.
That quest for independence largely drove the “success story” of distributed PV, but for that distributed generation to play a material role in the stable operation of the network, we’re going to need more storage to be orchestrated [into VPPs], at least in theory,” Johnston says.
Maryland recently became the first state in the US to introduce policies directing its investor-owned utilities (IOUs) to allow for bidirectional charging of EVs, enabling them to inject power into the distribution grid.
In Australia, many of the successful VPP programmes, notably in South Australia, have been pushed forward by policy support.
It will be interesting to see whether it will take for home storage and other DERs to become an unavoidably significant potential resource before policymakers, utilities, and grid operators around the world take notice or if more proactive, coordinated approaches can be found.
Nothing to see here: Eclipse impact was ‘boring’, which is good
A brief note that we were sent this week following the solar eclipse in the Americas from Wärtsilä Energy Storage & Optimisation (ES&O):
Wärtsilä ES&O has about 30 projects in the path of the eclipse, including some of its 500MWh of battery energy storage system (BESS) assets supplied and integrated for customers in the ERCOT, Texas, market. There were also a handful of customer solar PV projects in North and South America in its path that were forecast to see solar generation impact levels of between 43% to 94% during the few minutes the eclipse lasted.
Following analysis of the affected sites, “no out-of-the-ordinary activity” was witnessed at any of the 30 sites, Wärtsilä ES&O general manager of data science Luke Witmer said.
Data was gathered from the company’s GEMS Digital Energy Platform energy management suite, which is the brains and control centre for all of its projects.
Most of our batteries were engaged in ancillary services, which focus on grid stability, and the various grids all remained stable before, during, and after the event. While the eclipse itself was awe-inspiring, we were happy to see that the impact on and around our systems was unremarkable,” Witmer said.
“Boring is a good thing, sometimes!”
Witmer’s colleague Karl Meeusen, director for markets, legislative, and regulatory policy, noted that for close to an hour on 8 April, solar PV generation in ERCOT was reduced by around 12,000MW.
“Maintaining reliability during events like these takes an “all-hands-on-deck” approach from generation resources, including Texas’s growing energy storage fleet. Energy storage systems across ERCOT behaved exactly as needed, charging right before the solar energy dropped off, dispatching to help balance the load as the eclipse moved across the state and recharging after the solar energy returned,” Meeusen said.
BESS resources only carried about 2% of the load in ERCOT during the eclipse. Nonetheless, batteries performed reliably and reduced the amount of thermal generation needed to support the grid “when renewables were largely offline and when prices for power were spiking.”
“This shows just a fraction of the enormous potential of energy storage to support grid stability and flexibility as we look towards a future powered entirely by renewable resources,” Meeusen said.
Happy Friday!
This week on ESN Premium
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The company has developed a technology free from cobalt, nickel, and lithium that it claims is not derived from or based on improving anything else available on the market today.
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As we have seen in numerous territories in the US and UK in particular, battery energy storage system (BESS) is sometimes perceived by local communities as a potential fire and even explosion hazard.
In this series, we look at some of the things that companies in the industries are doing to mitigate fire and explosion risk, starting with manufacturing and product design.
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That was according to delegates interviewed at Solar Media’s Energy Storage Summit (ESS) USA 2024 last month when discussing the Inflation Reduction Act’s (IRA) numerous incentives relevant to energy storage, a booming market in the US.
Just as we reported from the event last year, exactly how to qualify for the 10% domestic content adder to the 48E ITC for using domestically-produced BESS is still unclear, and further guidance is expected soon.