Utility-scale batteries can save the power grid when renewable energy falters

27. september 2022 kl. 16:26
Utility-scale batteries can save the power grid when renewable energy falters
At a power plant south of San Francisco, PG&E has installed a utility-scale battery with a capacity of 400 MW / 1,600 MWh. Illustration: Tesla.
Weak power grids and renewable energy make utility-scale batteries good business in California and Australia. In Denmark, they are a rare sight.
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Utility-scale batteries used to collect power during windy and sunny periods are popping up in areas where solar and wind power is abundant.

But not in Denmark. There might be a good explanation for that.

First, we have to take a trip to California, where people are fascinated by batteries. Large batteries. Many of them are driving around on the roads in thousands of electric cars, primarily Teslas.

On 16 July 2021, California achieved a new milestone.

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In just five minutes, grid-connected batteries provided 1,000 MW of electric power for the first time ever. Enough to power 750,000 to 1,000,000 California homes. This record must be seen in light of the fact that the previous record of 501 MW was set just three and a half months before.

Records are there to be broken, and at the beginning of September this year, a battery capacity of 3,400 MW was connected to the California electricity market. This must be compared with a total Californian electricity production capacity of approximately 80,000 MW, the majority of which was made up of natural gas-fired power plants and renewable energy.

Just under 900 MW of the 3,400 MW consisted of small facilities located at private homes, often in connection with a rooftop solar power system. The rest were large commercial facilities, which in many cases are located at large solar parks or power plants.

The largest battery storage facility is located in Moss Landing, right on the edge of Monterey Bay south of San Francisco.

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The site already includes a natural gas-fired power plant with a capacity of 1,060 MW and good power connections, which is why it has been chosen as a location for a battery storage facility with a capacity of 400 MW / 1,600 MWh. Another 182.5 MW / 730 MWh is available at Elkhorn, not far from the power plant. So here alone, the batteries could in principle supply approximately 500 Danish households with electricity for a year.

But that is not how this type of battery is supposed to work.

The reason behind Americans’ love of utility-scale batteries lies in the Californian power grid. In short, it all boils down to a basic principle of capitalism: Buy low, sell high.

Vulnerable to cloudy weather

As the development of renewable energy—especially solar panels—has gained momentum in California and makes up around two-thirds of the state’s electricity supply, the proportion of power plants where production can be adjusted has fallen.

This has made the electricity supply increasingly unstable, which can result in both regular disconnections and violent fluctuations in energy prices.

It is especially the large solar parks that pose challenges. Because if clouds drift over such a park, production drops extremely quickly. And there are a lot of solar cells in California. With a capacity of approximately 32,000 MW.

One might wonder why California does not simply exchange electricity with the neighbouring states.

But traditionally, many states in the US have relatively weak connections to neighbouring states. This also applies to California.

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At the inauguration of the 182.5 MW battery at Elkhorn, PG&E CEO Patti Poppe said that the battery had already proved its worth on a day in April this year. On that day, it was charged at a purchase price of 10 dollars per MWh, and later the same day, the power was sold back to the grid for 100 dollars per MWh.

“This saves money for our customers and brings clean energy that would otherwise be a fossil fuel-powered resource People, I think, sometimes speculate that California is going too far with clean energy. Hell, no, we’re just starting a facility like that,” Patti Poppe said.

PG&E alone expects to connect a battery capacity of 3,300 MW to the grid by 2024.

Extreme distances

Australia has also embraced batteries.

The biggest story appeared in early 2018, shortly after a new battery facility had been commissioned at the Hornsdale Power Reserve in South Australia.

At the time, the battery had a capacity of 100 MW / 129 MWh, and the private company Neoen owned 30 MW / 90 MWh of it, while the rest was under the control of the state energy market operator AEMO.

Within just a few days, the Australian battery in Hornsdale had earned DKK 4.8 million by buying and selling energy at short intervals. Illustration: Hornsdale Power Reserve.

With 30 MW / 90 MWh available, Neoen showed that a power system susceptible to long distances and extreme weather conditions makes a highly profitable market.

The prices for storing and delivering energy varied between as low as AUD 2,000 per MWh and as much as AUD 14,000 per MWh in short periods. This meant that the battery in the days around 18 and 19 January 2018 earned around one million Australian dollars (AUD) or approximately DKK 4.8 million.

Right now, it is expected that by the end of the year, a battery capacity of 1,100 MW will have been installed in Australia, and the long-term perspectives point to upwards of 26,000 MW.

In contrast to California, where it has mainly been energy trade that has driven the development, the first batteries in Australia have been used to support the frequency in the electricity grid, i.e. for rapid regulation of electricity consumption and production. This is primarily due to an electricity grid where the distances between power plants and consumers can be extreme.

Almost the whole benefit for the owners of batteries (80–90 percent) has thus been the possibility of storing electricity at lightning speed, and then sending it back to the grid at short notice to keep the frequency stable.

However, new figures show that the batteries now make as much money as the traditional buying and selling of energy.

There is now talk of some Australian coal power plants being outcompeted by renewable energy such as hydropower, wind, and solar in combination with battery storage.

Maybe sometime in 2030

But what about Denmark? Do we not also need batteries to store all that renewable energy?

In 2017, the new Nordhavn neighbourhood of Copenhagen got a battery with a capacity of 0.63 MW / 0.46 MWh. The goal was to shave the peak load by charging the battery at night and discharging it during the daytime peak load. This would enable cables, transformers, and other electrical equipment to be made smaller and thus also cheaper.

Back in 2017, a residential area in Nordhavn got its own battery. It was supposed to shave the peak load, so that the power grid in the area could be expanded and operated more optimally and economically. The power rating was 630 kW, and the energy rating was 460 kWh. Illustration: ABB.

Vestas has also collaborated with the petrol company OK, which could offer EV customers wind power stored in a battery.

Recently, Vestas also announced that it has installed a battery at the headquarters in Skejby just outside Aarhus. Employees and suppliers can obtain electricity from a battery that is digitally synchronized with specific Vestas wind turbines, thus ensuring that it only charges when the specific wind turbines are producing power.

Ingeniøren has talked to a number of experts in the field, and the answer is fairly unanimous: So far, there has been no particular need for either frequency regulation or the purchase and sale of energy from batteries such as we see in California and Australia.

This is primarily due to the fact that the Danish power grid covers a much smaller area than the Australian one, and it is also much better connected to other power grids than California’s. This provides us with many possibilities in terms of power trading and grid stability.

This does not mean that the calculation models completely exclude large commercial batteries in the Danish system sometime in the future.

A quick calculation shows that if Danish batteries were to be able to deliver as much power to the power grid as California’s batteries can today, it would correspond to a battery capacity of 500 MW. This is not an insurmountable capacity.

If we look forward to 2030, when there will be far more wind turbines and solar panels, there may be commercial players willing to set up batteries solely to make money.

There are many indications that there will be times throughout the year when batteries may actually prove to be the cheapest solution.

So instead, we could maybe ditch the utility-scale batteries and just utilize the batteries in the tens of thousands of electric cars that are still connected to the grid.

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