Vattenfall enters large-scale battery storage business

As renewable energy sources like solar and wind continue to dominate the landscape, the need for flexibility in the power grid has never been greater. Enter Vattenfall, ready to make its mark on the energy storage scene.

“We anticipate a significant increase in battery storage capacity, particularly for short-term daily flexibility requirements. System flexibility is crucial for stabilizing grids and mitigating price spikes in the market,” stated Daniel Drexlin-Runde, via translation, who has played a key role in developing Vattenfall’s flexible storage and systems marketing.

While there are challenges for market participants, the current landscape also presents numerous opportunities.

“Batteries can be charged when prices are low and released back into the grid when prices rise,” Drexlin-Runde explained. “Each storage unit helps ensure that excess wind or solar energy isn’t wasted but is available for use later. This gradually increases the proportion of CO2-free electricity in the grid.”

The German Federal Network Agency, or Bundesnetzagentur, estimates that the installed capacity of large battery storage systems will grow to between 43 and 54 gigawatts by 2045, up from around seven gigawatts today. Vattenfall aims to capitalize on this market trend.

Looking ahead, Vattenfall is also focusing on directly integrating photovoltaics with storage solutions. The energy company plans to develop 500 megawatts of new solar parks and 300 megawatts of battery storage each year.

“Batteries are now available in modular designs, allowing for flexible solutions regarding the ratio of storage capacity to power,” said Drexlin-Runde.

Deciding on the optimal size and number of cycles involves balancing costs with revenue potential: higher investment and operating costs for larger systems can be offset by potentially greater returns.

Additionally, Vattenfall plans to market electricity from large battery storage systems, including those owned by competitors. These systems will be contracted at a fixed price and managed similarly to Vattenfall’s own assets for a specific period. This strategy aims to introduce up to 1.5 gigawatts of power from large-scale storage into the electricity market.

The focus will be on identifying where flexibility can be most profitably utilized. Depending on the circumstances, this might involve the wholesale electricity market—such as day-ahead or intraday trading—or the balancing energy market, which is essential for grid stability and regulated by transmission system operators.

“Wherever they are deployed, batteries as flexible storage address regional and temporal inefficiencies in the electricity market,” Drexlin-Runde noted.

Vattenfall draws on its experience in operating and marketing electricity from pumped storage plants, with Vattenfall’s Drexlin-Runde highlighting its experience with short-term electricity price adjustments on open markets.

From pv magazine Germany