Batteries could bring much more grid savings via a redispatch price signal, study finds

How useful are large-scale batteries for the grid? Battery developer Eco Stor commissioned a team led by Lion Hirth, from consultancy Neon Neue Energieökonomik, to study the issue.

Having made its preliminary findings public in a “Grid Fees for Large-Scale Batteries” report, Neon has published the complete “Grid Usefulness of Large-Scale Batteries” document. The study found grid operators save annual “redispatch” costs of €3 per kilowatt of battery power to €6/kW. “Large batteries should therefore by no means be considered a burden on the grid, even if this is sometimes suggested in the energy policy debate,” said Neon’s Hirth.

The consultant analyzed the behavior of two large batteries – one in Schleswig-Holstein, the other in Bavaria – for each 15-minute period over a year. Battery operation (whether charging, discharging, or idle) was compared with regional needs to take control measures, know as “redispatch” – whether positive, negative or neutral – and produced the €3 to €6 figure.

Such redispatch relief occurs despite the lack of a price signal for such action, the researchers said. Germany has one, national electricity price zone so battery energy storage systems (BESS) respond solely to a uniform price signal from the wholesale and balancing energy markets. As a result, grid bottlenecks are invisible to BESS.

The researchers concluded BESS could offer significantly more redispatch savings. Testing three regulatory changes, the consultancy found a 15-minute price signal, reflecting the grid situation, would work best. “A dynamic redispatch price signal creates both the greatest grid added value and the smallest loss of market added value,” said study co-author Clemens Lohr.

By contrast, a static grid fee would offer no incentive for grid-friendly BESS operation and would hit the BESS business case.

Study sponsors Eco Stor said grid serviceability is an important facet of large scale BESS operation. “We want to get the most out of batteries because we believe they are essential for our energy future,” said Managing Director Georg Gallmetzer. “But this requires grid-friendly incentives. If we can achieve this, everyone involved would benefit – the storage operators, the grid operators, consumers, and the economy.”

Neon recommended a special grid fee, determined daily by grid operators, be used as a redispatch price signal. That would reflect local congestion so BESS operators could align with the grid situation and reduce redispatch. Part of the additional revenue generated for BESS operators could pass to grid companies, as a performance-related levy, and be used to reduce general grid fees without jeopardizing the BESS business case, according to Neon.

From pv magazine Deutschland.