Battery Energy Storage Systems (BESS) are essential to deepening renewable energy penetration and decarbonising the grid. These systems also play a critical role in ensuring grid stability, particularly in regions with unreliable power supplies.
Renewable energy sources like wind and solar are subject to seasonal and weather-related fluctuations, leading to inconsistencies in energy generation. For example, solar photovoltaic (PV) systems peak during the day and decline as the sun sets, which doesn’t align with typical residential energy consumption patterns that peak in the early morning and evening.
Integrating BESS with renewable energy projects enhances commercial viability by optimising generation asset utilisation and improving grid stability. BESS can function either independently or as part of the grid.
Key advantages of battery energy storage:
Increase renewable energy fraction for cleaner energy: BESS reduces clean power generation system reliance on fossil fuel generation as a backup system, resulting in lower carbon emissions. They are an important component of the 24/7 carbon-free energy model.
Affordability: The energy shifting feature provided by BESS enables the storage of generated energy at its lowest cost, followed by use at higher generation costs.
Reliability: While they cannot replace generation in itself, they can provide the critical, quickly dispatchable energy resource required when a large generator or transmission line suddenly goes offline—system breakdown. Embedded storage enables utilities to achieve flexibility. During periods of rapid demand growth, utilities can use BESS as a virtual power plant to provide the required energy to cover forecasting errors.
Battery energy storage models and their uses
Model usage depends on the user’s perspective and objective. Here’s a detailed explanation of each model, including its users:
Distribution and transmission deferral model: This model is utilised by utilities, grid operators, and renewable energy developers. This model uses BESS to delay or avoid upgrades to distribution and transmission infrastructure, reducing costs and increasing grid efficiency. Installing BESS systems manages peak demand, alleviates pressure on the generation asset grid, and prolongs the lifespan of existing infrastructure.
Price-taking Model: User: Independent Power Producers (IPPs), renewable energy developers, and energy traders. In this model, BESS responds to market prices, charging when prices are low and discharging when prices are high, maximising revenue. This model is suitable for energy markets with high price volatility.
Very Short-Run Production Cost Model: This model uses BES to reduce production costs by optimising energy storage and release based on short-term market fluctuations. BESS helps generators and IPPs reduce their operating costs and increase their competitiveness in the market.
Strategic Behaviour Model: Users include utilities, grid operators, and large energy consumers. This model employs BES to manipulate market prices or influence grid operations, potentially creating new revenue streams or improving grid stability. This model requires advanced market knowledge and sophisticated forecasting tools.
Capacity Expansion Model: Users include utilities, grid operators, and renewable energy developers. This model uses BES to increase grid capacity, enabling the integration of more renewable energy sources and reducing the need for new generation or transmission infrastructure. BESS helps to manage peak demand and ensure grid stability.
Resource Adequacy Model: User: utilities, grid operators, and large energy consumers Description: In this model, BES systems ensure that sufficient energy resources are available to meet peak demand, reducing the risk of blackouts or brownouts. This model is particularly important for areas with high peak demand or limited generation capacity.
Users can use these models individually or in combination, depending on their specific goals and constraints. Understanding these models allows users to optimise the use of battery energy storage systems to improve grid efficiency, reduce costs, and increase the integration of renewable energy sources.
ESS Inc., a NYSE-listed battery company, has announced a 1MW/8MWH battery energy project for Sapale Power, Nigeria’s independent power producer. This project presents a significant opportunity to demonstrate the vast potential and advantages that battery energy storage can offer to consumers.
On their website, the Iron Flow Battery Company stated that the project would enable load smoothing and peak demand shifting, which would allow Sapele’s power station turbines to ramp up and down more efficiently. The deal is the largest BESS export to Africa, financed (in part) by the Export-Import Bank of the United States of America, the official export credit agency of the US federal government, and ESS Inc.’s first on the continent.
Tesla CEO Elon Musk announced on his X page that a 43 MWh Tesla Megapack has started operations in northeast Japan. The megapack provides frequency control for the Japanese grid, which is the first of its kind in terms of utility-scale power generation efficiency and buffering, reducing the need to build power plants.
Challenges and solutions.
Commercial model: Most BESS projects are technically feasible; however, commercial viability remains a major challenge. BESS projects are capital-intensive investments that require an innovative commercial model to achieve scale. A recent solution is the use of blended finance to scale BESS projects with long-term project tenure in a carefully selected grid segmentation.
Extraction: There are concerns about how to sustainably mine lithium ions and other rare earth metals used in battery production. Uncontrolled extraction of these metals from the earth’s crust poses some risks to life and the earth’s physical structure. It is also important to mine these metals ethically using processes devoid of child labour or forced labour.
Disposal: Batteries don’t have an infinite lifespan. New cutting-edge research has found a way to recycle bad batteries to produce new ones; the discovered recycling process would be better than starting the extraction from every new battery. The disposal of bad batteries would deposit highly inflammable and poisonous chemicals into the environment.
