Big energy-storing batteries make rapid inroads in Europe to support power grid 

Source: Eric Marx, E&E Europe correspondent • Posted: Wednesday, April 29, 2015

Grid-scale battery storage solutions have arrived in Europe, despite a lingering controversy. No longer a distant dream, projects in Germany are already feeding energy into the grid, while in the United Kingdom and Italy, commercial projects are close to coming online.

Yet their breakthrough potential — for the quick balancing of intermittent renewables and eventual replacement of fossil power plants — has not been fully tested. Grid-level energy storage remains a new frontier, and among a host of modern storage options, batteries are still sometimes tagged as too costly and unproven in real-world environments.

Wouldn’t it be more economical, critics ask, for a country like Germany, which sits in the middle of Europe, to draw on neighboring grids, rather than invest in expensive storage technologies? In Germany, resistance to high-power battery storage has come not just from lobbyists in the energy industry — which has long argued that renewables have to wait for more cost-effective storage — but from respected green energy think tanks. They point to a host of good options already built into a grid network that currently operates without interruption.

Clemens Triebel, founder of Younicos AG, a German-American specialist in renewable energy integration, sees it differently. “My message is a simple one,” he said recently at an international conference on climate change in Berlin. “Start investing in local capacity storage units now, while you have low enough levels of renewables in the grid.”

According to Triebel, synchronized grid expansion is being far outpaced by the growth of electricity from renewables. Proof resides in the experience of the island grid of Graciosa, a Portuguese island in the Azores, where a 15 percent cap on renewables threatened to shut down the island’s wind and solar power plants.

“Germany is not its own grid,” Triebel reminded the audience. It may have topped 28 percent renewables within its own borders, but the country doesn’t exist in isolation. It is connected to its neighbors and the rest of the European electricity network, which currently has less than 7 to 8 percent renewables integration, a number that includes green electricity from Germany. For this reason, both the European Union and Germany are, in fact, below the 15 percent renewables threshold. So the European Union may not hit its 2020 percent targets, Triebel predicted, and Germany may shortly hit a wall by ramping up further renewable energy too quickly.

“This is the problem we have been investigating in our technology center,” Triebel said. “This 15 to 20 percent [renewables] load is our big challenge.”

Powering an ‘enchanted’ island

Triebel founded Younicos in 2006 together with colleagues from a previous solar power venture. The company has now built the two largest battery power plants in Europe and is considered a leader in the development of battery control software for both stand-alone island systems and integrated battery parks.

Younicos opened Europe’s first commercial grid-connected project in September with a 5-megawatt unit, a “battery park” operated by Wemag, a German utility whose northeastern region already produces more wind power than the total local consumption of energy. The company is also involved with Europe’s biggest commercial energy storage trial in Leighton Buzzard, England.

Younicos doesn’t make its own batteries but puts its software to use controlling three electrochemical battery technologies that it believes are particularly well-suited for large-scale storage. These include lithium-ion units for controlling short-term millisecond grid stability, sodium-sulphur batteries for matching power supply and demand over the day, and vanadium-redox-flow batteries for longer-term storage.

The centerpiece of the company’s stand-alone focus is a fully automated 2.8-MW battery park currently being built on Graciosa Island (which means “enchanting island” in Portuguese). By stabilizing the grid without fossil-fuel-fired backup generators, Younicos says the system will enable the grid to be fully powered by wind and solar energy.

Key to Younicos’ success has been its state-of-the-art technology center, located on the outskirts of Berlin in the Adlershof Science Park. The company has spent the last six years using live power flows to control batteries so they respond accurately and quickly to fluctuating network conditions.

Other energy storage companies have conducted similar tests, but only Younicos’ system has thus far achieved a 20-year warranty from a major lithium-cell producer, Samsung of South Korea, according to professor Michael Sterner, who co-directs the Research Centre for Energy Networks and Energy Storage at the Technical University of Regensburg.

Big potential, but questions linger

“The potential is enormous,” Sterner said in a recent interview with German media, likening the 20-year warranty to similar breakthroughs achieved in the early days of photovoltaic solar power. “The technology is proven,” he said. “Now it’s just a matter of getting the costs lower.”

Already the Wemag battery park is reporting earnings beyond its original revenue forecast. The regional utility now stands as one of 20 pre-authorized participants in the primary frequency response market. That electricity prices are higher than originally forecast has only been to its benefit. Meanwhile, if anything goes wrong with the battery, there’s insurance on the back side with a warranty that covers replacement of the cell along with 97 percent of all lost revenue.

Yet the business case could still fall apart. Once there are more batteries online, prices in the primary frequency market could drop and with them Wemag’s revenue stream, said Thorston Lenk, an energy market specialist with the consulting company Energy Brainpool. Energy models indicate the German system will only need long-term storage from 2030 or even later. Consequently, battery storage parks can’t use their quick balancing services for trading energy on the day-ahead market. The batteries are at the present only trading power, not energy, and are considered grid assets, not generators.

As grid assets they can replace some fossil-powered generators by providing auxiliary services that help maintain frequency targets, voltage stability and the “black start” capability, which is the ability to give a start pulse for the entire system after a power failure. Each of these services, in turn, is a potential revenue stream for battery storage projects.

Another big unknown is the lifetime of these batteries. Fuel cell companies have been burned by 10-year warranties and appear to be losing money on maintenance costs. Similar doubts persist with regard to grid-scale batteries, noted Lilia Xie of the energy storage team at Lux Research.

“There isn’t a clear winner yet among these companies,” Xie said. “It’s still a matter of showing results from testing in real-world environments and showing the results there. That’s what all these companies are now doing.”

A technology for the U.S.?

A big test for Younicos is its entrance into the U.S. electricity market, which has the potential for a third of all large-scale energy storage applications.

By acquiring the assets of Xtreme Power in a bankruptcy auction in early 2014, Younicos got off to a fast start, gaining access to 60 MW of up-and-running grid-scale battery storage projects at Duke Energy Corp.’s 36-MW Notrees wind farm in Texas. In total, the company now manages 100 MW of installed capacity spread across 22 projects, according to Philip Hiersemenzel, a Younicos press spokesman.

As for future grid development in Germany and Europe, Triebel says the Graciosa project is a precursor for what should come next. There, Triebel and his team of software engineers have devised a 2.7-megawatt-hour battery plant that enables the island to operate on 65 percent renewables using just an hour of battery life.

Granted, the business case on an island is different from what one finds in an integrated grid — yet Triebel believes the architecture of the control problems and solutions are similar.

The difference between reliability and blackouts on a grid is that power supplies must always be quickly adjusted to match power demand levels. He estimates that 2 gigawatts of battery storage installed in Germany — roughly the equivalent of two large nuclear power plants — would eliminate 20 GW of fossil-fuel-powered generators that must turn on and off during periods of peak power demands, such as during hot summer afternoons, to keep the supplies in balance. Even though it would cost around €1.5 billion, he said he believes it’s a bargai