ENERGY STORAGE IN THE DISTRIBUTION GRID - POTENTIALS AND BARRIERS

ENERGY STORAGE IN THE DISTRIBUTION GRID - POTENTIALS AND BARRIERS Majbrit Høyer Director, Grid Strategy Customers & Markets, Distribution

Agenda Introduction the future Danish energy system Potential of energy storage in the distribution grid Potential barriers for energy storage deployment Energy storage in DONG Energy s grid Summary 2

The Future Danish Energy System Production COAL GAS WIND BIOMASS RE-GAS SOLAR Ambitious targets for the future Danish energy system Composition of the Danish Energy system 2015 4

The Future Danish Energy System Production COAL GAS RE-GAS SOLAR BIOMASS WIND Ambitious targets for the future Danish energy system Future composition of the Danish Energy system 5

The Future Danish Energy System Production COAL GAS RE-GAS SOLAR BIOMASS WIND Ambitious targets for the future Danish energy system Consumption Future composition of the Danish Energy system Share of electricity 2015 TRANSPORT HEATING COOLING INDUSTRY SERVICE LIGHTING 6

The Future Danish Energy System Production COAL GAS RE-GAS SOLAR BIOMASS WIND Ambitious targets for the future Danish energy system Consumption Future composition of the Danish Energy system Future share of electricity TRANSPORT HEATING COOLING INDUSTRY SERVICE LIGHTING 7

The Future Danish Energy System - Potential of energy storage in the distribution grid DONG Energy s Vision Lead the Danish energy transformation Maintain the high level of security of supply ( 99,994%) Challenges Implementation of Distributed Energy Resources (DERs) Electrification from the integration with the heating- and transport-sector e.g. from EVs and HPs Conventional Load EV Charging HP System Average Interruption Index 100 min Daily Load Profile with Non-Optimized HP and EV Consumption 75 min 30 min Age composition of grid assets 180 min 45 min Source: Danish Energy Association 1920 1940 1960 1980 2000 Asset Installation year 2014 9

Loading in % of max capacity The Future Danish Energy System - Potential of energy storage in the distribution grid DONG Energy s Vision Lead the Danish energy transformation transformation Challenges at Peak Demand Excessive loading of the infrastructure At present: 4% of the feeders are equal to or above max capacity Solutions Grid reinforcements Maintain the the high high level level of security of supply (SAIDI 30 min) of security of supply ( 99,995%) System Average Interruption Index 75 min 100 min 180 min 45 min 0 Source: Danish Energy Association 30 min 15%-30% peak increase: 10-16 % of the feeders are equal to or above max capacity at peak demand 160 140 120 100 80 60 40 20 4% Present Max Capacity +15% peak +30% peak 0 20 40 60 80 100 (%) of 10 kv feeders in DONG Energy s grid Smart Control Strategies - Improved asset utilization Increased flexibility: Demand side management Energy Storage 10

Potential Barriers for Energy Storage Services Economic Barrier Energy storage costs are at present still relatively high, which leads to low costeffectiveness Regulative Barrier Market potential for energy storage 114 ($B) 2,8 2012 2013 2014 2015 2016 2017 Source: Department of Energy (US) Possibilities Energy storage costs are expected to decrease in the coming years 800 600 Navigant 400 IRENA 200 IEA 0 2014 2019 2024 The multifunctionality characteristics of energy storages complicate the rules for ownership and operation New market structures and rules may be needed to accommodate and recover the benefits of energy storage systems Practical Experience Global experience is still limited e.g. approximately 21 utility (distribution) owned projects currently deployed in the EU i.e. below 1% of DSOs Lack of consideration of storage resources amongst utilities, developers and regulators Experience with energy storage is a key requirement for the large-scale deployment of energy storage 12

Energy storage in DONG Energy s Grid Energylab Nordhavn Smart Energy Infrastructure Design: Smart Energy Infrastructure Design BESS in Nordhavn BESS expected to be operational early 2017 Main objectives of BESS project: Test the latest technology in energy storage in a realistic environment Design and dimensioning of the future costeffective multi-carrier energy system based on Nordhavn as a globally visible real-life demonstration Energylab Nordhavn will include: Stochastic production and consumption: e.g. PV, EVs and HPs A Battery Energy Storage System (BESS) owned & operated by DONG Energy Demonstrate the potential of utilizing energy storage for deferral of infrastructural investments by simulating a lower capacity in the network Demonstrate control protocols and business models for an energy storage for both DSO and commercial purposes Use test data to discuss and recommend the best possible regulatory landscape for energy storage in the distribution network 14

Summary The energy system transformation will entail several challenges in the distribution grid Energy storage could potentially play a substantial role in the future grid A number of barriers must be overcome e.g. cost, regulative landscape and experience with applications Energylab Nordhavn will contribute to a practical experience with energy storage in the Danish distribution grid 16

Thank you for your attention Majbrit Høyer Director Grid Strategy majbh@dongenergy.dk 17

Energylab Nordhavn in numbers Budget Total budget 129 mio. DKK Research budget approx. 25% EUDP grant for industry partners is 40% and for research partners 90% DONG Energy s contributions contribution In total 15 mio. DKK Receive 40% grant from EUDP About 6 mio. DKK is for new hardware, especially a battery installed in 10 kv grid Time Schedule & Organization Started: 1 April 2015 Project Period: 4 years DTU CEE provides Project Manager and Project Secretariat 18

Potential Energy Storage Services Potential Energy Storage Services throughout the Energy Value-chain Production Renewables TSO DSO End-User Electric energy time-shift (arbitrage) Capacity firming Regulation Distribution grid upgrade deferral Retail electric energy timeshift Electric supply capacity Curtailment minimization Transmission grid upgrade deferral Voltage support Power reliability Black start Renewable generation flexibility Voltage support Distribution quality End-user peak shaving Reserve capacity Intentional islanding Power quality Source: Based on data from EPRI, IRENA, DOE, and IEA 19

Potential Energy Storage Services Potential Energy Storage Services internal DSO business Production Renewables TSO DSO End-User Electric energy time-shift (arbitrage) Capacity firming Regulation Distribution grid upgrade deferral Retail electric energy timeshift Electric supply capacity Curtailment minimization Transmission grid upgrade deferral Voltage support Power reliability Black start Renewable generation flexibility Voltage support Distribution quality End-user peak shaving Reserve capacity Intentional islanding Power quality Source: Based on data from EPRI, IRENA, DOE, and IEA 20

Potential Energy Storage Services Potential Energy Storage Services Market related synergies Production Renewables TSO DSO End-User Electric energy time-shift (arbitrage) Capacity firming Regulation Distribution grid upgrade deferral Retail electric energy timeshift Electric supply capacity Curtailment minimization Transmission grid upgrade deferral Voltage support Power reliability Black start Renewable generation flexibility Voltage support Distribution quality End-user peak shaving Reserve capacity Intentional islanding Power quality Source: Based on data from EPRI, IRENA, DOE, and IEA 21

Potential Energy Storage Services Potential Energy Storage Services Renewable enabling synergies Production Renewables TSO DSO End-User Electric energy time-shift (arbitrage) Capacity firming Regulation Distribution grid upgrade deferral Retail electric energy timeshift Electric supply capacity Curtailment minimization Transmission grid upgrade deferral Voltage support Power reliability Black start Renewable generation flexibility Voltage support Distribution quality End-user peak shaving Reserve capacity Intentional islanding Power quality Source: Based on data from EPRI, IRENA, DOE, and IEA 22