Batteries Cheaper Than Gas. Also Demand For Flexibility Leads To Trading Platforms

Demand For Flexibility Leads To Trading Platforms, Clean Technica, February 9th, 2019

Distribution system operators need more flexibility to manage congested networks

This article was originally published by Fereidoon Sioshansi in the EEnergy Informer newsletter. Fereidoon can be reached at Reprinted with permission.

As variable renewable generation increases across the globe and consumers turn into prosumers and prosumagers, the once predictable and unidirectional flows of electrons in the distribution networks become multidirectional and unpredictable. The situation is likely to get worse with the rising numbers of electric vehicles (EVs), which need to be charged – and potentially discharged – at homes or work. The combined effect of behind-the-meter (BTM) distributed generation, storage, and EVs are likely to put increased stress on an aging distribution network that in many parts of the world barely manages to keep the lights on.

Not surprisingly, distribution network operators (DNOs) in many places are looking for better ways to cope with the increased complexity of flows without having to invest massive amounts on upgrading the network – which are not necessarily uniformly stretched to their limits everywhere and/or at all times. With better tools, they can identify where the network is stressed, why and when, allowing them to better manage flows across the network. Having flexible loads, storage, or generation — which they can manage in real time — are among the least cost solutions for relieving stress on the distribution networks.

A number of start-ups have emerged in the last few years to assist DNOs in this task, including Piclo, a London-based company offering flexibility services via an open platform, previously featured in this newsletter.

Piclo has managed to get all 6 large DNOs in the UK to join a trial of Piclo Flex, its flexibility marketplace. In a press release in early Dec 2018, Piclo said a more flexible network could save £17–40 billion ($22–51 billion) across the UK’s electricity system to 2050.

Among other things, Piclo Flex provides visibility of the DNO’s need for flexibility and offers streamlined procurement services and online auctions.

Western Power Distribution (WPD) recently joined 5 other DNOs, UK Power Networks, Scottish and Southern Electricity Networks, Electricity North West, Northern Powergrid, and Scottish Power Energy Networks to trial the Piclo platform, according to the press release.

All DNOs are looking for making better use of available flexibility across their franchise license areas by enhancing the visibility of their unmet flexibility needs thought sharing the data on Piclo Flex’s open platform. Ben Godfrey, WPD’s Network Strategy Team Manager said, “Allowing our flexibility needs to be displayed on Piclo Flex should drive more participation and build upon the visibility already available on our website’s Network Flexibility Map.”

James Johnston, CEO and Cofounder of Piclo, added, “For the first time, flexibility providers will be able to access virtually all flexibility opportunities on the network across Great Britain through a single platform, via the same format and using common processes.”

Johnston explained that all flexibility providers – including aggregators, electricity suppliers, energy brokers, local councils, community groups and large industrial customers – can join the Piclo Flex platform for free. By doing so, they can view all existing DSO flex opportunities and be notified when new opportunities arise. They can use the matching tool to check if their fleets of flexible assets match with DSO requirements before progressing to online auctions.

As an open platform, Piclo Flex is agnostic to all types and scales of assets, from industrial batteries and demand response schemes, to residential storage heaters and electric vehicles and/or those with EV charging stations. The aim is to bring all buyers and sellers of flexibility services on the network to an electronic marketplace to trade.

Innovative companies such as Piclo stand to play an important role by offering flexibility services to DNOs. As in any platform business, success depends on scale, and the platform gains from the network effect — the more traffic that is directed to the platform, the more popular it becomes and the more services it can offer at lower costs, hence attracting more customers to the same site while offering expanded services. ■

Battery Energy Storage = Competitive Substitute For Gas Peakers (Cheaper & Better)

Published on February 7th, 2019

Excerpt… On many networks an increasing share of generation is provided by renewable resources, most likely wind and solar, neither of which is dispatchable nor totally predictable. In this environment, what the grid operators crave the most is the flexible generation, especially options with a rapid ramping capability to fill in any unexpected shortfalls in renewable generation and to maintain the system’s reliability.

This much is old news. What is new is that recent advances in energy storage technology, especially batteries, coupled with dramatic cost declines is making storage increasingly attractive relative to gas-fired peaking plants, which are not particularly efficient, are highly polluting, and are expensive to maintain. Moreover, since peakers are infrequently used and only for a limited number of hours, they tend to be poor investments, sitting idle most of the time.

A case in point was a decision by San Francisco–based Pacific Gas & Electric Company (PG&E), backed by the regulator the California Public Utilities Commission (CPUC) in Nov 2018, to replace 3 gas peakers with large battery storage units that would be among the world’s largest when completed.

The approved batteries would have a total of 567.5 MW of power capacity with 2,270 MWh of energy storage consisting of a 300 MW, 1,200 MWh project from Vistra Energy and a 182.5 MW, 730 MWh Tesla battery that PG&E would own – all lithium-ion batteries.

Currently, the world’s largest lithium-ion battery is Tesla’s 100 MW, 127 MWh facility in South Australia, followed by Kyushu Electric Power Co. in Japan, which has a 50 MW, 300 MWh sodium-sulfur battery.

The CPUC directed PG&E to proceed with the batteries rather than signing contracts for 3 gas peakers based on analysis that showed that the cost of the batteries is likely to be lower than continuing to operate the gas plants. This, despite the fact that natural gas is plentiful and cheap, is newsworthy.

Approval of PG&E’s landmark energy storage is the most significant example to date of batteries replacing fossil fuel generation on the power grid – in this case, 3 plants owned by Calpine: the 580 MW Metcalf plant and the Feather River and Yuba City generators, both with 48 MW of capacity.

As with any approved infrastructure investment, PG&E will be allowed to recover the costs of the batteries from ratepayers through regulated rates based on the analysis that concluded that the batteries would be less expensive than the gas plants they will replace. In describing the merits of batteries, Alex Eller, senior energy research analyst at Navigant, a consulting firm, told Utility Dive (9 Nov 2018) that, “Storage at this scale is likely now cheaper than the total cost to run the gas plants.” PG&E aims to have all 3 projects online by the end of 2020 – notwithstanding serious recent headwinds (see below).

Aside from the cost advantage, batteries have much faster response time – they can virtually ramp up and down instantly by following signals from the grid operator. This makes them so much more useful, allowing them to respond to fluctuations in solar or wind generation – say, variations in wind speed or changes in solar output temporarily obscured by passing clouds. Gas peakers can barely match the flexibility and fast response time of batteries.

Batteries offer additional advantages:

• They can be sited in small spaces more or less anywhere, including in urban centers – few people object to a quiet box sitting behind the fence in a vacant parking lot;

• They can be built in record short time – Elon Musk the CEO of Tesla promised to install his 100 MW battery in South Australia in under 100 days or said it would be free – and he delivered; and

• Batteries have no greenhouse gas emissions.

Other energy storage technologies, including flywheels and compressed air storage, are also coming down in cost while gaining on performance. Together, storage promises to compete with gas peakers in an increasing number of applications. ■