Skip to 0 minutes and 5 seconds Hello everyone, I am Anna Darmani and I work at InnoEnergy as an energy system analyst. During the past 7 years, I have been monitoring the energy transition in Europe. I have been studying the role of different innovative energy technologies in achieving zero-emission energy industry in Europe. In this lecture, I will explain why currently there is a need for battery storage in the electricity market. Nowadays, in the electricity market the challenge is not anymore about having sufficient energy resources to meet the electricity demand of consumers. But, the challenge is to have sufficient flexibility resources and solutions to cover for the difference between electricity demand and generation. Why is there a difference?
Skip to 0 minutes and 53 seconds Three reasons can explain this: First, the share of renewable energy has increased significantly over the past years. Only in Europe, the share of renewable energy in the final electricity consumptions has increased from 12% in 1990 to 30% in 2017. Given the EU targets, we expect this share to reach 50% by 2030 and almost 100% by 2050. Note that these percentages are for the electricity market and are smaller in the energy industry. This large share of renewable energy resources in the electricity industry is a good news, but also results in a high dependency on natural resources such as sun or wind. These natural energy sources are neither produced on a regular pattern nor where there is a high demand.
Skip to 1 minute and 52 seconds The second reason is that, consumers’ consumption pattern is not balanced with the renewable energy generation. This means that it is not always clear how much electricity supply is needed at each moment of time. This becomes more challenging when we consider that renewables also do not produce electricity when or where consumption is high. For example, households need more electricity during the night while the sun is shining in the morning, or in some EU countries such as Germany, there is more wind power generation in the north, when there is a larger electricity demand from the industry in the south. The third reason is that power plants and contingency issues call for flexibility. What does this mean?
Skip to 2 minutes and 40 seconds This means that if there is an issue on one transmission line or in one power plant, there should be a backup solution to cover all the lines connected to the source of the issue.
Skip to 2 minutes and 54 seconds Now that we know there is a need for flexibility in the electricity market, let’s have a look at the available resources and solutions that can enhance the flexibility in the electricity market. The first solution is Energy storage. Using storage technologies, we can store power when there is an oversupply of energy and use that energy during high demand. The second solution is Demand Response. In this method, we ask consumers to adjust their consumption pattern based on available capacities. For example, consumers turn on their dishwasher during the night when the electricity demand is low. The third method for flexibility is Dispatchable Power Plants. This method which refers to when we keep fast respond electricity capacity on hold.
Skip to 3 minutes and 51 seconds Then, we use that capacity during high electricity demand. A good example is gas power plant on stand-by. And finally, the 4th solution is connection with the adjacent market. In this approach, we improve connection to neighbouring electricity market. Therefore, we facilitate electricity transmission from where it is generated to where it is needed most. Within these flexibility options, battery storage technologies have a special place because they affect and improve not only the power sector but also transportation and industrial processes. But the urgent need for flexibility is only one reason that calls for a larger share of battery storage in the electricity market.
Skip to 4 minutes and 37 seconds There are other 5 reasons that you should know about in order to understand why the time has come for battery technologies to enter the market. Let’s go through these reasons one by one. The second reason is that the cost of battery storage has decreased substantially, and cost reduction drives more investment. To give you an idea, the cost of lithium-ion batteries has decreased from 1000 USD/kWh to nearly 200 USD/kWh during the past 6 years. The third reason is that key markets are showing us the way, as the installation of batteries worldwide is increasing. Let’s take Australia as an example.
Skip to 5 minutes and 19 seconds The share of batteries in this market has been 10-folded, especially in home storage systems, or, in another example in the UK, battery projects were among the most awarded projects to enhance frequency responses in 2016. The fourth reason is that, traditional methods and solutions are becoming costlier than storage technologies. For example, grid reinforcement. Investments in grid lines are becoming costlier when we compare them with battery projects as alternative options. Five is that nowadays batteries are the fastest solutions that can be operationalised in the market. When we consider deployment time as well as other factors and benefits and critical points, batteries can be prioritized over other projects. And finally, sixth, local battery solutions are already technically competitive.
Skip to 6 minutes and 18 seconds A recent study in Sweden has shown that a battery of around 1 kWh per apartment can reduce the peak load of the whole building by 40 %. To summarise, in this lecture we have reviewed the reasons for the need for flexibility resources and solutions in the electricity market. You also learned about different flexibility options that are currently available. I also explained to you 6 reasons for why the time has really come for battery technologies to enter the electricity market.
EU flexibility demand and the role of battery storage
In this step, Anna Darmani will provide some important answers to the issue explaining the current stage of the energy system. You will learn about different flexibility options in the electricity market. We will also discuss why the time has come for battery storage to enter the market.