THINKING ENERGY
What are battery energy storage systems for?
Battery Energy Storage System

Written by Fabian Le Gay Brereton

Chief Executive Officer & Co-Founder BSc Computer Science (Hons) University of Western Australia

May 02, 2021

We’ve been told that battery energy storage systems are an essential part of the world’s future energy system – but how, exactly? 

What are the different use-cases for battery systems? We’ve made a list! 

If you are making an investment case for battery energy storage, how would you consider these use-cases? Which use-case will drive the most value for your project, and can you use your battery energy storage system to target multiple use-cases simultaneously? If you have deployed battery energy storage to deliver against some of the below, how would you manage the ongoing performance of your systems? These are all questions Gridcognition can help answer.

 

1. Energy arbitrage 

Battery storage systems can shift energy consumption to times of lower-cost or lower-emissions energy production for energy users. Conversely they can shift energy production to times of higher-prices for energy generators.

 

2. Power regulation

Battery storage systems can help to regulate frequency and voltage on the power system.

Frequency was traditionally regulated by power generators with spinning mass that provided inertia to slow the rate of change of frequency, and which could increase or decrease power output. Similarly, traditional power generators can inject and absorb reactive power to regulate voltage, supported by network infrastructure like static compensators and reactors. In contrast, the power electronics in inverter-based energy systems are Internet connected and software controlled and can react very quickly to regulate frequency and voltage. Battery storage systems can measure frequency and voltage at their point of connection to the network and can rapidly absorb and inject active power and reactive power with very fine control.

 

3. Operating reserves

Battery storage systems can provide operating reserves to the power system.

Operating reserve, traditionally called spinning reserve, is firm capacity that power systems operators can call upon to balance supply and demand on the power system and to reduce the “ramping” required by slower responding or less-flexible generating systems. Or in the case of intermittent renewables, these operating reserves can be used to smooth rapid changes in generation output. In different power systems and markets the requirement for operating reserves are expressed and funded in different ways, sometimes in the form of an ancillary services market where battery systems can participate directly. Even when this isn’t the case, there may be ways for battery storage systems to create and capture value by reducing the operating reserves required by the power system.

 

4. Capacity

Battery systems can provide capacity to the power system to support peak demand.

Some power systems have a capacity market to ensure there is enough reliable generation capacity to meet peak demand on the power system. Like operating reserves, the requirements for capacity can be expressed and funded in different ways, sometimes in ways that allow battery systems to generate revenue and sometimes in ways that allow battery systems to reduce costs for energy users.

 

5. Deferring transmission and distribution network augmentation 

At both a transmission and distribution network level, battery systems can reduce peak demand, ensuring the network stays within its thermal limits, can manage voltage, and can provide reliability services. These can all defer the need for traditional augmentation of the network. This deferred expense can be used to pay battery systems for the services they are providing to the network.

 

6. Deferring network connection augmentation

For energy users, battery systems can reduce the capacity of the network connection they might require to serve all their loads. This is especially relevant to new developments or existing sites that are expanding their operations where the cost of distributed generation and battery storage may be able to be offset by the avoided cost of a larger network connection.

 

7. Reducing network access costs

For energy users, network access costs or use of network costs can be a significant proportion of their total electricity supply costs (as much as 50%). These costs typically have a fixed component (e.g. a daily supply component) and variable components based on the volume of energy used and the maximum demand for energy, often with different rates at different times of day. Typically the most significant component of these costs is the maximum demand costs (or maximum rate of energy use). Battery systems can reduce maximum demand, and thus electricity supply costs for energy users.

 

8. Solar self-consumption

For energy users, battery systems can maximise the consumption of energy from behind-the-meter solar PV systems or other kinds distributed generation, thus reducing the cost of importing energy from the distribution network and reducing the amount of energy exported back to the distribution network. This is a form of energy arbitrage, and can significantly reduce energy and network costs for energy users.

 

9. Backup power and power quality management

Battery systems can provide other services to energy users, such as backup power and power quality management.

 

10. Transport. Just add wheels and an electric motor! 

Tiller Roadster

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