ENERGY STORAGE ROADMAP NL System integration and the role of energy storage

Transcription

1 ENERGY STORAGE ROADMAP NL 2030 System itegratio ad the role of eergy storage

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3 CONTENTS Itroductio Project method Services that ca be provided with eergy storage systems Sceario aalysis ad ecoomic aalysis Curret situatio Gap aalysis Market research Actio pla

4 04 ENERGY STORAGE ROADMAP NL 2030 INTRODUCTION Three parallel treds ca be observed i the curret Europea eergy sector. The first is decetralizatio, whereby icreasig quatities of local, sustaiable eergy are geerated by ewcomers to the eergy market, who are fidig ew ways to cooperate ad who ivolve the ed users. The secod is the Europeaizatio of eergy, ivolvig takeovers of major eergy compaies, power plats far removed from the major customer bases ad cross-border eergy flows. The third tred is the strog icrease i the amout of sustaiable eergy projects that have bee implemeted. These three treds form the basis of the eergy trasitio. I order to facilitate this trasitio, extra flexibility i the supply ad demad of eergy is required. This flexibility ca help make these systems more reliable ad affordable as well as facilitate the treds towards more locally sourced eergy ad a Europea market. Flexibility ca be provided by meas of a cost-effective combiatio of the followig four optios: flexible power plats, a more robust electricity grid, demad respose ad eergy storage. Eergy storage is thus oe of the opportuities for creatig more flexibility i the eergy supply. There are various ways of storig eergy, for example as electricity, gas or aother chemical compoud, as heat or cold, i a chemical product, or as potetial eergy (such as hydroelectric dams ad compressed air eergy storage (CAES)). I cosultatio with our cliet, we have focussed this subproject o optios that ca retur the stored eergy as electricity. Flexibility provided by heat storage is discussed i aother subproject which focusses o flexibility at the ed-user level. I November 2013, the Eergy Top Team asked the TKIs (Top Cosortia for Kowledge ad Iovatio) to advise o the TKI-wide theme of System Itegratio. I order to provide a directio for this advice, the Switch2SmartGrids TKI asked a cosortium formed by DNV GL, Bereschot ad TU Delft to draw up a roadmap for eergy storage i the Netherlads with a focus o electricity. The Miistry of Ecoomic Affairs will be able to use the iformatio provided i this roadmap ad the suggested solutios for flexibility provided by the other domais to steer its policy towards the desired situatio of a affordable ad reliable eergy system for the future ad a stroger eergy sector that focusses o what the Netherlads does best.

5 ENERGY STORAGE ROADMAP NL PROJECT METHOD The aim of this project is to set out the desired (or i fact required) future role of eergy storage i the Netherlads ad to draw up a actio pla with the measures that the Dutch govermet must implemet i order to make this future role a reality. We first idetified system fuctios that ca be facilitated by differet forms of flexibility. A progosis was the draw up for a eergy system i 2030 o the basis of various scearios that ivolve a high peetratio of sustaiable eergy. The scearios are based o ENTSO-E exploratios. The preset study focusses o the Visio 4+ sceario for 2030, which is the ENTSO- E sceario with the highest peetratio of sustaiable eergy. This sceario could coceivably come about later tha 2030 i a situatio ivolvig a slower growth rate of sustaiable eergy tha described i the Visio 4+ sceario. A importat factor i this sceario is that there is still a sigificat umber of covetioal power plats i operatio, which has a importat ifluece o the market for flexibility. The demad for flexibility services was estimated o the basis of these scearios ad a sceario aalysis. Eergy storage is a potetial solutio for the provisio of these services. The services that are suitable for storage have bee idetified, alog with the specificatios that the storage techologies must coform with i order to provide these services. Alogside desk research, at the cliet s request we also coducted several stakeholder iterviews i order to iclude the iput of busiesses ad orgaizatios i the roadmap. I accordace with the assigmet ad i cosultatio with the cliet, we focussed o forms of electricity storage where both the iput ad output is electricity. Alogside batteries ad other forms of storage such as compressed air or pumped hydro, this ca also iclude power-to-gas, but ot other optios such as powerto-heat: this is part of domai 4 (the role of the ed users), but we do look ito the market iterferece of these optios i this study. Curret situatio Markets & regulatio Scearios for 2030 APX Behid the meter Balacig Most promisig services, locatios ad tech Roadmap Techology developmet Software & tool developmet

6 06 ENERGY STORAGE ROADMAP NL 2030 SERVICES THAT CAN BE PROVIDED WITH ENERGY STORAGE SYSTEMS SCENARIO ANALYSIS AND ECONOMIC ANALYSIS Eergy storage systems ca provide a wide rage of services, such as tradig eergy o the wholesale market or the balacig market, eergy maagemet behid the meter or at the source, cogestio maagemet or other services that support the eergy system. The services with the most potetial for eergy storage techologies up util 2030 were idetified by meas of a spectral aalysis, a sceario aalysis ad market research. These are: Tradig o the wholesale market Tradig o the balacig market, supplyig reserve capacity Eergy maagemet behid the meter A sceario aalysis ad ecoomic aalysis were coducted for each of these three services i order to assess the geeral ecoomic perspective of these services ad the uderlyig techologies. A umber of these services could also be provided by implemetig ed-user flexibility optios, icludig heat storage. As metioed earlier, these optios are discussed i aother subproject. The sceario aalysis of the three services produced the followig results. Wholesale market The volatility of wholesale prices will icrease oly margially up util Oe factor that will ifluece this volatility is the structure of the fossil fuel reserves i The larger price variatio will maily be caused by the fact that the eergy price will be zero for more hours. The startig poit here is that the productio of sustaiable eergy will cease whe the price becomes egative, i.e. sustaiable eergy will ever be supplied at prices below zero. The seasoal variatios i electricity prices i 2030 will be much too small to make seasoal storage viable. However, the maximum price differece that will be observed over a period of a few days will be much larger tha the maximum variatio i a 24-hour period. Therefore, it may be a viable optio to store eergy for arbitrage o the wholesale market i order to compesate for variatios i the hourly prices over several days, whereby the storage system would be cycled every two to three days. This would eable the users to profit from the maximum price differece that is caused by the chagig weather patters (such as strog vs. light wids) durig this period. I 2030, the maximum price differece betwee idividual hours over this period of a few days is estimated to be 50-60/MWh, whereby it should be oted that user flexibility (demad respose) could reduce this price differece if deployed o a large scale. Alogside storage for the wholesale eergy market, storage ca also be used as a meas of prevetig sustaiable eergy sources from beig capped ad so stimulate extra deploymet of these sources. This ca ivolve substatial amouts. Some of the scearios predict 1 to 4 TWh of sustaiable geeratio i 2030, which potetial will icrease eve more if more sustaiable eergy sources are deployed up util 2050.

7 ENERGY STORAGE ROADMAP NL This calls for a structural solutio, which could also ivolve demad respose, iteratioal exchage ad flexibilizatio of the fossil fuel reserves (ad the use of the existig power plats), alogside the storage optios discussed here. I priciple, both large-scale storage systems ad small-scale, clustered storage systems could coduct tradig ad arbitrage operatios o this market. However, the ecoomic aalysis reveals that oe of the storage techologies cosidered offers a viable busiess case. The busiess case ad projected cost price i 2030 was also calculated for Li-io, the costs of which storage techology are expected to fall the most, but this was ot a viable busiess case either. O the basis of the curretly forecasted costs, the large-scale techologies such as compressed air promise the best busiess cases due to the relatively low ivestmet costs per uit of eergy. Therefore, it would seem that large-scale storage will ot be a viable optio with the curretly expected cost levels o the basis of the wholesale market aloe. We recommed focussig o cost reductio ad system itegratio whereby the same storage solutio ca fulfil multiple fuctios (wholesale, balacig ad reserve capacity). Balacig market, respose ad reserve capacity It is highly ucertai how the balacig market will develop up util The experiece to date is that eergy imbalace prices display higher peaks i geeral tha those of the itra-day market, but the peaks occur less ofte. However, these price peaks ca reach as high as 600/MWh. This market does have a limited volume, however, so that storage for this market will face competitio from other forms of flexibility. The Dutch imbalace market does offer better perspectives tha the Dutch spot market for a umber of techologies due to the greater price variatio ad the umber of peaks per day. A possible limitatio is the regulatio of the imbalace market. The regulatios stipulate, for example, that oce a balace has bee set this amout of geeratio must be maitaied, eve though there is a fiite storage capacity. I the market for reserve capacity, we see that eergy storage is also beig implemeted for this service i various coutries, alogside covetioal power plats. Because the specificatios coform with the properties of flywheels ad Li-io batteries, these are very attractive techologies for this service. Although other battery types (such as ickel ad iro-ickel) caot be ruled out, the fact is that there is a very strog iteratioal idustrial icetive to further develop ad reduce the cost of Li-o due to the strogly growig demad for electric cars ad plug-i hybrids. The ecoomic aalysis of the primary reserve does result i a viable busiess case based o the curret price levels ad the costs of some of the techologies (flywheel). The market research revealed that various commercial parties are iterested i eterig this market with Li-io techology. Eergy maagemet behid the meter Most applicatios for off-grid electricity storage are curretly visible i iitiatives that use storage to optimize eergy cosumptio behid the meter (from the ed user s perspective). The combiatio of solar paels ad storage is maily iterestig ad already beig implemeted i coutries that do ot have a et-meterig scheme. This combiatio could also become iterestig i the Netherlads if the et-meterig scheme were to be cacelled or drastically chaged. This is why various busiesses are active i this area. The ecoomic aalysis of eergy maagemet behid the meter did ot result i a viable busiess case, however (based o the curret purchase ad sale prices for eergy, without et-meterig). I light of the developmets i eighbourig coutries, where emotioal argumets also play a role i the implemetatio of storage behid the meter (e.g. the desire to use the geerated electricity for local use, icludig electric trasport), ad cosiderig the fallig price of storage i combiatio with the developmet of ew techo-

8 08 ENERGY STORAGE ROADMAP NL 2030 logies for such applicatios, a future with more ad more storage behid the meter is ot icoceivable i the Netherlads. This optio may ot always be the most ecoomically efficiet oe whe the total system is cosidered (after all, local optimizatio is expected ayway if o icetives or regulatios are put i place), but it is still a importat motivatio for the ed users. We recommed makig o-regret modificatios to the eergy system, whereby the icetives for the use of storage will eed to be i lie with the costs ad beefits (see also the Actio pla below). If these (aggregated) batteries were also available for system services, so that this techology could play a role i multiple services, the this could improve the efficiecy of the total system. The mai form of storage for eergy maagemet behid the meter is batteries. As Li-io batteries become cheaper i the future they may well become suitable for this service, possibly i cojuctio with other battery types such as lead-acid. Discharge time (h) Wholesale Behid the meter Balacig 1kW 10kW 100kW 1MW 10MW 100MW Storage Year Discharge time (h) Li-io Lead acid VRFB NaS CAES P2H 2 P2CH 4 Moth Day Hour 0.01 Flywheel kW 10kW 100kW 1MW 10MW 100MW Storage

9 CURRENT SITUATION Alogside the aalysis of the future situatio, the curret status of the eergy storage market was also charted. This ivolved a aalysis of the market model, the regulatios, policy ad techology developmets. We also described the parties curretly active i this market. This aalysis reveals that the curretly available techologies ca, i priciple, provide the required services, but that there is o viable busiess case for the wholesale market as yet because these techologies are still too expesive. Furthermore, the curret market model ad legislative framework form barriers to the storage market at the momet.

10 10 ENERGY STORAGE ROADMAP NL 2030 GAP ANALYSIS The steps required to reach the desired future situatio are determied by comparig this future situatio with the curret situatio. This gap aalysis was performed for various categories: Techologies The curret state-of-the-art of a umber of techologies was compared with the expected demad i 2030 (ad o to 2050). This ivolved a study of the curret level of developmet of the techology, the services that ca be provided by the techology, the price per kw of istalled capacity, etc. This iformatio was used to determie what these storage techologies lack i order for them to be commercially viable. The costs of eergy storage are sigificatly higher tha other optios that icrease the flexibility of the eergy system (such as demad respose). These costs will eed to be reduced by meas of further developmet of existig techologies ad the ecouragemet of research ito ew techologies. Tools & software The aalysis revealed that a few techologies are capable of providig multiple services, but that i may cases several techologies are required to be able to provide a total package of services for a specific situatio ad so create a viable busiess case. This makes the software that allows these combiatios of services to commuicate very importat to be able to get the most out of eergy storage. The key coclusios o the basis of the gap aalysis are: Some system fuctios of eergy storage are udervalued i the curret market model. The market should be modified i order to create a level playig field for flexibility services ad so that the maximum value ca be gaied from eergy storage. Beefit-stackig (the deploymet of a sigle eergy storage system for multiple services, resultig i higher ad more reliable yields) is required i order for the eergy system to get the most out of eergy storage. Market model The curret market model ad legislatio udervalue flexibility, so that this value caot be utilized by market parties. If the value of the system is more accurately reflected i market prices ad system rates the this will stimulate ivestmet i flexibility optios, such as eergy storage. The curret systems also form a barrier to small-scale storage. The Dutch et eergy rate model would appear to be more suitable for large-scale storage tha the pricig models of some other coutries (icludig Germay). This could be a promisig opportuity.

11 ENERGY STORAGE ROADMAP NL MARKET RESEARCH Together with Dutch busiesses ad kowledge istitutes, we coducted various market research activities i order to idetify the opportuities ad barriers for eergy storage. The opportuities ad barriers for Dutch busiesses revealed by the market research have bee icluded i the aalysis provided i this roadmap, whereby the actio pla focusses o ecouragig Dutch opportuities ad iitiatives ad removig the largest barriers. The market research revealed four types of barriers: Barriers related to the market model ad/or the legislative framework. The iteractio betwee the stakeholders ad their roles. Other techology-related barriers besides the storage techology itself (e.g. stadardizatio ad cotrol software). Ucertaity arisig from the above factors ad the icetive schemes. Alogside these barriers, the Dutch stakeholders see opportuities for Dutch busiesses who ca come up with ew products ad services. The followig opportuities were idetified: Strog Dutch sectors, such as gas, chemicals, offshore ad hydraulic egieerig: profit from the existig strog Dutch sectors i order to achieve the developmets i less time, with less moey ad with less ew kowledge, while simultaeously stimulatig these sectors. New Dutch products: esure a role i the developmets for Dutch busiesses to market ew products (such as iovative eergy storage systems ad cotrol software) both at home ad abroad. New Dutch services: esure a role i the developmets for Dutch busiesses to market ew services both at home ad abroad. Opportuities for the Netherlads as a whole: develop a role for the Netherlads as a provider of storage capacity ad system overhaul services for the ecoomic beefits, ad with the aim of makig the coutry more sustaiable.

12 12 ENERGY STORAGE ROADMAP NL 2030 The market research also resulted i more specific recommedatios for cocrete steps, of which the four most importat are listed below: Developmet of services ad system itegratio solutios for eergy storage behid the meter. Implemetatio of compressed air eergy storage (CAES) i the Netherlads. Developmet ad implemetatio of Power2Gas i the log term. Iovative busiesses ca profit from the opportuities offered by the demad for flexibility. Various icetive measures were also suggested for each of these four specific opportuities i order to make the most of them. The most frequetly suggested measures were techology developmet, modificatio of the market model, reducig the ivestmet risks ad ecouragig pilot projects. Differece betwee = required developmets Curret situatio (2015) Barriers to these developmets Future situatio (2030+) Opportuities Roadmap = use the opportuities, implemet the developmets, remove the barriers.

13 ENERGY STORAGE ROADMAP NL ACTION PLAN Dutch busiesses are ready to grab these opportuities ad develop them further. However, the gap aalysis reveals that public ivestmet will be required i order to achieve the ambitios for STIMULATE AND SUPPORT RESEARCH AND DEVELOPMENT Actio pla Stimulate ad support iovatio ad R&D for the developmet of ew techology ad eergy maagemet systems (software). The goal of this measure is for the Dutch govermet to support iitiatives by Dutch busiesses, kowledge istitutes ad etrepreeurs, particularly for developmets that focus o reducig the costs of eergy storage techologies ad o the smart itegratio of these storage systems i the eergy system. Curret situatio We distiguish two types of activities: We ofte hear that techological iovatios aloe are isufficiet ad that the applicatio of eergy storage also requires ew cooperatio models, for example because the beefits have to be divided amog multiple stakeholders or because a sigle storage system ca be used for multiple services. The govermet should stimulate ad facilitate the developmet of ew busiess models for eergy storage as much as possible. Stimulate ad support research ad developmet Remove barriers i the legislatio ad market model ad adapt the legislatio to the desired situatio Focus o the services that are the most attractive for eergy storage: eergy maagemet behid the meter, the market for respose ad reserve capacity, ad combiatios of the two ad with the wholesale market (which curretly does ot provide sufficiet basis o its ow). It is importat ot to focus the efforts o oe specific techology. If the ew techologies or services that are developed are adapted to this framework the they will be effectively supported by this actio pla. Existig systems that require further developmet or are i fact ready to pilot are also icluded.

14 14 ENERGY STORAGE ROADMAP NL REMOVE BARRIERS IN THE LEGISLATION AND MARKET MODEL AND ADAPT THE LEGISLATION TO THE DESIRED SITUATION ACTIONS Alogside R&D, the Dutch govermet ca ad should remove the barriers i the Dutch market model ad legislatio. There are several ways of doig this. The key outcome must be that flexibility is fairly valued i the market. Six measures are suggested: Techology developmet New busiess models Remove uecessary barriers to eergy storage ad demad respose for tradig o the balacig market. Wholesale market: improve the market model to facilitate flexibility services. Eergy maagemet behid the meter: the govermet should implemet measures to stimulate the deploymet of eergy systems behid the meter so that they do ot oly beefit the ed user, but also help to optimize the total system. There are several opportuities, such as: - Time-depedet ad where possible locatio-depedet pricig (the price will the follow the wholesale market ad be iflueced by factors such as local cogestio), icludig legislative facilitatio of differetiated eergy rates. - This time-depedet price should be applied to both eergy cosumptio ad geeratio. - Adapt the ettig scheme ad REB (Regulatory Eergy Tax) to facilitate maximum local implemetatio of sustaiable eergy. Market model ad legislatio Remove barriers Stimulate cooperatio Stadardizatio Time

15 CONTACT DETAILS DNV GL Utrechtseweg 310, 6812 AR Arhem P.O. Box 9035, 6800 ET Arhem The Netherlads T F cotact.eergy@dvgl.com Chamber of Commerce o KEMA Nederlad B.V./April 2015 All rights reserved.

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