Multiple service provision using battery energy storage in renewable energy systems

Rising environmental concerns and higher climate change awareness are increasing reliance on renewable energy sources (RES) in the electricity sector. However, the high intermittency and limited dispatchability of RES-based plants present challenges in transitioning toward sustainable energy solutions. Energy storage systems, particularly BESSs are being widely recognized as a potential buffer to these challenges. They can not only store excess RES generation but also provide multiple grid services at the point of their installation. Hence, BESS-based projects are becoming more common. The European Union has set a target to deploy 10 GW of new energy storage capacity by 2025 which is to rise to 40 GW capacity by 2030. This includes both large-scale grid-connected BESSs and other forms of energy storage like pumped hydro and compressed air energy storage. Studies on the technical and economic aspects of the BESS service provision are thus vital to ensure viable BESS integration in power systems. This thesis thus has three overarching research directions, each targeting a specific domain of BESS service provision: (i) BESS in electricity markets, (ii) BESS operation, and (iii) BESS placement. Each research direction respectively addresses one main research question: (i) “How do the differences in electricity market products (EMPs) impact BESS service provision?,” (ii) “How can optimal BESS service provision be ensured considering different market mechanisms, service requirements, and operating conditions?, ” and (iii) “How do BESS placement decisions in power systems impact BESS service provision?”
The first question looks into the predictability differences in the electricity market products (EMPs) of different countries and quantifies the impact of these differences on BESS revenues. It thus focuses on conducting inter-market and inter country investigations. The focus of the former is to help BESS owners choose the right combinations of available services in a particular country, while the focus of the latter is to evaluate the comparative prospects of BESS business in different countries. As a part of inter-market investigations, the case of Nordic energy and regulation market products is considered. The probability distribution curves of the energy and regulation market prices of Denmark, Sweden, Norway, and Finland are thus compared. Moreover, the differences in the relative predictability of their market products are quantified. The results show that similar models can capture the price trends of the Nordic energy market products which is not the case for their regulation market products. The findings thus imply that while similar bidding strategies can be applied for BESS participation in the Nordic energy markets, however, bidding in Nordic regulation markets requires country-specific considerations. The results also show that while the Nordic countries may have similar regulation needs thereby resulting in similar total market revenues, however, the revenue generation potential for BESS technologies differs in each country. The findings can thus help BESS owners reduce business risks by accounting for the relative predictability of the EMPs in addition to their profitability.
The second question looks into quantifying the business value of single and multi-market BESS service provision. BESS participation in energy and regulation markets is modelled while accounting for various market-specific and service specific requirements. This includes consideration regarding bid submission and acceptance procedures, pricing mechanisms and revenue streams, forecast inaccuracies and price seasonalities, energy requirements of available services, battery state-of-charge conditions and BESS bidding power and energy capacities. In this thesis, the proposed model is applied to the case of BESS’s participation in Nordic energy and regulation markets. However, it is extendable to BESS service provision in multiple markets of different regions. The results of the Nordic case study show that for single-market services, optimally limiting the BESS operational hours can help achieve a viable trade-off between reduced degradation costs and increased market revenues. On the other hand, the results for multi-market services show that for periods when high-energy demand markets have higher prices, either BESS service stacking in a combination of high and low-energy demand markets, or optimally reduced BESS operational hours in high-energy demand markets is a viable business decision. The results also show that while frequency regulation markets are a service of choice for profitable BESS operation in the Nordics, yet, one may opt for discharging the BESS units in energy markets when energy prices are relatively higher than regulation market prices. BESS owners can thus benefit from the findings of the proposed model in estimating the approximate costs and revenues that may be accrued by choosing various combinations of market services under different price conditions.
The third research question focuses on investigating the impact of the BESS installation location on the business aspects of the BESS-based projects. It focuses on developing a site-selection framework for BESS installation in power systems. The proposed framework consists of a three-level criterion to assess prospective installation sites considering all stages of the BESS-based projects. This includes investigating the feasibility of BESS assembly, the viability of BESS connection, the profitability of BESS operation, and the possibility of BESS maintenance. The results of this investigation show that higher connection charges apply when the BESS is installed at lower voltage levels because of the additional costs associated with electricity transport through higher voltage levels. Lower voltage levels were also found to have higher associated electricity tariffs and stricter rules regarding land access permits for BESS installation, connection agreement rules for grid connection, and maintenance protocols to ensure safe operation. The proposed site selection framework was applied to identify a suitable placement location in the Bornholm power system for a 1 MW / 1 MWh BESS unit. Similar site-selection considerations can be extended to other BESS-based projects.
The work presented in this thesis can thus help financiers, business investors, researchers, policymakers, and market participants unveil several important results regarding BESS service provision. It can also help them develop viable BESS operation strategies and make business-friendly BESS placement decisions.