Utility Week

Operations & Assets UTILITY WEEK | 18TH - 24TH MARCH 2016 | 23 Market view O ver the years, the power industry has readily adopted myriad technologies. "Generating plants come in many flavours, formats and sizes – but storage devices have just as many alternatives, if not more," says Anthony Price, managing director of consultancy firm Swanbarton. With the opportunity to deploy storage, and such a wide range of different technolo- gies – batteries, flywheels or thermal and air systems are all at high readiness levels – expectations must be managed. Just as with generation plant, no single storage technol- ogy can do everything: investors will have to make important technical choices that will decide if investments deliver. An understanding of current and future applications and the market is vital if suc- cessful technical, commercial and invest- ment plans are to be made on storage. As Colin McNaught, managing consultant at Ricardo, observes: "Some types of batter- ies may be ideal as a means to provide fre- quency response services to the transmission system operator, but a quite different one would be needed if the battery is to be used for energy management services on a con- strained network." Technically, progress is proceeding at an exciting pace. The lithium ion battery indus- try is awash with announcements from new and established manufacturers of the latest products and boasts a seemingly endless reduction in costs. If the market predictions for electric vehicles (EVs), both full EV and hybrid models, are even partially achieved, lithium battery production for EVs alone will see economies in manufacturing that will push down the headline costs of electricity storage to new lows. But although there is crossover between EV batteries and static ones, there are also important differences. For example, optimis- ing long-term management and performance in power system applications is still in its very early days compared to EVs. The operational duties of a battery define its performance parameters, and not only the technical specification of the battery, but of its ancillary equipment such as power conversion system and the battery manage- ment and control system. But vehicle applications shape battery technology development. Full EVs maximise range, while plug-in hybrid electric vehicle (PHEV) batteries need high instantaneous power, so batteries must maximise power density. Different battery chemistries will suit different applications in the power sector. There could also be some nasty war- ranty issues if the car batteries are used actively in power systems as many propose in future "smart" electricity systems. Inter- estingly though, many of the electric vehicle manufacturers are connecting with potential providers of static applications, perhaps to develop large-scale storage systems using former PHEV and EV batteries. EV batteries' lifetimes reflect the need for vehi- cles to have sufficient stored energy and power: emphasis on volume and weight is impor- tant for obvious reasons – batteries that have reached the end of their useful life in EVs could have a useful second life in static batteries. Some of the biggest challenges will be accommodating the different battery types: will we see future large-scale battery pro- jects, such as the Leighton Buzzard instal- lation, become a home for batteries sourced new from some suppliers, and rehoused from others? Would that work – how will the plant manager be able to keep long strings of batteries balanced if they have been made at different times, to different specifications and have all been subject to a different oper- ational history? We already know of compli- cations in establishing a spares strategy for a plant with a planned 15-year life. "New technology also brings new prob- lems," says Dr Jez Kent, an IT security specialist at Swanbarton. "The electricity storage management system, whether for domestic, industrial or network scale, will need to be as secure against IT attack as every other component on the system." None of these challenges will be solved in isolation, a new methodology for con- trolling batteries will be needed, along with new power market models to make sure that the system can benefit from a better way of controlling the network on which we all rely. Early battery storage projects will cap- ture the lion's share of the future value of storage. One conundrum of using storage is that aggressive storage deployment tends to cannibalise its own prices. There is a law of diminishing returns and in theory, a per- fectly balanced system would have maxi- mum storage with minimum price volatility, and hence there is no capability for income in a true merchant-based power market. But we suspect we are a long way from that stage. It is more likely that by considering stor- age as part of the renew- ables strategy, we could have a more efficient sys- tem: all new renewable generation would have to be self-balancing, either directly, or through a contract with another party such as a dispatchable generator, load or storage device. The push from the battery industry is encouraging: we will see much more pro- gress in electric vehicles with improved bat- teries, and the increased production will lead to lower prices for batteries to be used in bulk stationary applications. The path to widespread deployment in the UK is far from certain, but there is progress. Anthony Price, referring to the recent report by the National Infrastructure Com- mission on Smart Power, says: "The mes- sage has been delivered, battery storage has arrived. Now it's the turn of the power indus- try to embrace the technology and turn it to commercial advantage." And while rumours of tens of gigawatts of stationary battery sales in the next few years should be viewed with caution, the prospects of a solid growth building on some excellent foundations do look very exciting. Phil Hare, head of energy markets, Poyry Management Consulting Choosing the right storage Just as with generation plant, no single storage technology can do everything; understanding current and future applications is vital to make successful technical and commercial plans, says Phil Hare. " Batteries that have reached the end of their useful life in EVs could have a useful second life in static batteries "

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