Distributed Production, Distributed Storage
The energy transition won’t be possible without storage. You may have recently read that pumped storage, which for some time made up a large portion of storage capacities in Germany, is no longer profitable for its operators. What does that mean for the energy transition and what other storage options are there? An interview with our LichtBlick colleague Johannes Kehl.
Prices of electricity have been falling for years
Johannes, we need storage to compensate for weather-related fluctuations in wind and solar power production and thus to promote the energy transition. But large-scale storage is no longer profitable and expansion has come to a halt. Why is that?
Everything is dependent on the prices of electricity on the stock exchange. Because these have been falling for years, both power plant operators and storage power stations are bringing in less and less revenue.
Electricity prices are very low to negative at night, as major power plants are inflexible, resulting in a must-run capacity in the grid. When the percentage of wind energy is high in the grid and consumption is low, the result is excess capacity in the grid. It’s more affordable for power plant operators to pay people to use the electricity than halt power plant operations. This lowers stock exchange prices. That in turn has an impact on pumped storage. We therefore need to shut down major power plants and market renewable energy on the stock exchange in order to stimulate the market again and, over the long term, replace the German Renewable Energy Act. In doing so, we will make storage both profitable and essential.
Photovoltaics systems don’t have turbines
Why do we even need storage to ensure the success of the energy transition?
In the past, major power plants that produce energy using turbines and generators provided spinning reserve: if for instance more energy is temporarily required than is available, the speed of the generators decreases. This lowers utility frequency and the performance of all consumers and stabilizing the grid, a simple physical law. Fluctuations in the generation of energy, for instance due to weather-related production of wind and solar power, can thus be compensated for in a conventional way. However, photovoltaics systems don’t have turbines that can be slowed down in line with the utility frequency. If there’s too much or too little energy in the grid, these systems cannot react and are switched off.
Power plants with must-run capacity continue to increase CO2 emissions
But that’s not an argument for conventional major power plants. Rather, these power plants with their must-run capacity result in excess capacity in the electricity market and continue to increase CO2 emissions; though in Germany we’ve already come quite far in terms of the energy transition. Shutting down conventional power plants will increase the percentage of renewable energy in the electricity market and reduce harmful greenhouse gases. But for that, we need new, efficient storage.
What forms of storage are available in Germany now?
Pumped storage is the only one worth mentioning at the moment. There are also pilot projects for battery storage, including larger centralized storage solutions as well as distributed storage, as in the INEES research project carried out by LichtBlick and other partners. There’s also power-to-gas, which is still in its development phase in Germany and not yet considered an established form of storage.
Electrochemical storage is currently the most efficient
And battery storage and power-to-gas could be the storage solutions of the future?
Yes, electrochemical storage, which is based on batteries, is currently the most efficient and advanced. It has an effectiveness of approximately 80%. Projects such as power-to-gas and compressed air energy storage offer 60% at most. What’s more, battery storage can achieve its full output in milliseconds and is therefore ideal for primary balancing reserve. This market is also very profitable and will become even more so in the future.
Speaking of which, why is it still possible to earn money with primary balancing reserve?
The primary balancing reserve market is independent of the power exchange. The four major transmission system operators (TSO) invite tenders for the required balancing energy reserve and the pre-qualified applicants provide offers for the service. Because there aren’t any major competitors in the market, prices have remained relatively stable in the past.
Electric cars and their batteries can store energy or feed it into the grid
LichtBlick doesn’t offer any storage services, but is involved in several projects designed to expand storage as part of the ‘SchwarmEnergie’ cluster energy concept. Can you tell us more about that?
In the future, there will be many distributed energy producers rather than large centralized power plants. Our solution is called ‘SchwarmEnergie’ – energy from a cluster through the intelligent networking and management of local solar plants, electric vehicles, wind turbines, and combined heat and power units. LichtBlick is currently conducting the INEES research project with electric car batteries equipped to also discharge when required. Connected to the power grid and equipped with a corresponding communication unit, the electric cars and their batteries can store energy or feed it into the grid as needed and thus contribute to grid stability.
Distributed storage makes perfect sense
Or take for instance the ‘SchwarmBatterie’ cluster battery, which we currently offer in collaboration with our partners Sonnenbatterie and Varta Storage. Customers who install a solar battery at home that can store the electricity generated by their solar panels will be able to connect this battery to the cluster in the future. So they not only use the battery for their own needs but also contribute to general grid stability by allowing their battery to store energy from the grid when too much is produced or feed electricity into the grid when requirements increase. Because distributed generation is becoming more and more common, distributed storage makes perfect sense.
But it’ll probably take some time until there are enough electric cars in Germany. And the excess energy generated by the large wind farms and solar parks also has to be stored.
The government would have to make the market for electric cars more attractive; that would help us to reach our goal sooner. I was recently in Norway and saw more electric cars there than ever before. The country supports sales in significant ways, for instance by eliminating the luxury tax and providing free charging stations. What’s more, electric cars don’t have to pay for parking and can use the bus and taxi lanes. There are now more than 35,000 electric cars and plug-in hybrids in Norway. So it is possible.
Pilot projects for battery storage
But battery storage can of course also be used in larger systems – with correspondingly more storage capacity. Two good examples are the pilot project of the energy provider Wemag in Schwerin and a research project carried out by eon Hanse and other partners on the island of Pellworm. Wemag uses lithium-ion batteries for storage. Because lithium batteries are becoming more and more affordable, are extremely flexible and boast an efficiency of around 80%, they’re now very profitable for grid operators.
The eon Hanse project is based on redox flow batteries. These contain liquid electrolyte, which can give off or absorb energy during charging and discharging due to a chemical reaction. The liquid can be stored outside of the battery cell, which allows the storage capacity to be increased if necessary.
Shut down coal power plants, expand storage capacity
And what else do you think needs to be done to further expand storage capacities?
Storage capacity expansion needs to be subsidized to a higher degree. So it’s up to politicians. Private storage is already subsidized, but that’s not enough. If we really want to shut down coal power plants, we need to expand storage capacity significantly: Most operating coal power plants have to maintain at least 50 to 60 percent of their nominal output – the must-run capacity – at all times. But this must-run capacity is also currently required to ensure grid stability. What that means is that, as long as coal power plants are in operation, the proportion of renewable energy may not exceed 40 to 50 percent, as this could cause the power grid to overload. So if the proportion of renewable energy were to increase, power plants would have to be shut down and more storage installed.