Energy storage in grid optimization

Today energy supply is moving towards more renewable, which brings challenges to the power grid. Intermittent power is difficult to predict and cannot be regulated in the same way as conventional power. If the grid is not dimensioned to handle the power peaks, the intermittent power can cause overload on the grid. Overload causes larger losses, can damage electrical components in the grid and/or a reduced lifespan of these components. If a producer of renewable power wants to connect to a weak grid today, the normally chosen solution is to reinforce the existing grid. Since batteries are on a fast growing market and the prices are falling rapidly. This study aimed to investigate whether batteries as energy storage can be a cost-effective alternative to grid reinforcement when renewables are to be connected to the grid. This has been investigated with battery prices today (2016) and by forecasts of battery prices by 2030. A case study was made on one part of E.ON's grids in Småland, on which there were plans to connect wind power a few years ago. Since the grid is weak, grid planners at E.ON came to the conclusion that it was necessary to install a new 12 km long cable to the nearest distribution station, which made the investment cost too expensive for the wind power producer and therefore the plans were abandoned. Three different cases were selected for the study to investigate how a battery in a grid with different types of production would work and if a mix of intermittent power have any effects on the battery size. A case with 7 MW wind power, one with a 7 MW solar cell system and one with 3.5 MW wind + 3.5 MW solar power. Simulations of the grid were made by the help of a software for power modelling called PSS/E. Different sizes of batteries were simulated and a cost comparison to the grid reinforcement was made by investment calculation with net present value. The results show that it is more profitable to use energy storage than grid enhancement 2030, but to the cost of a certain amount of curtailment of the production is required. In 2030, energy storage with a capacity of 1 MWh is profitable compared to grid enhancment. In 2016 the batteries are too expensive to be an option. The study assumes that a grid company owns the energy storage and use it to avoid overload on the grid. An important discussion is how the profitability would be if the energy storage was owned by the producer or an electricity trading company that can optimize income by taking advantage of price differences between high and low energy prices. Today, there are rules about grid companies owning energy storage, as they are not allowed to trade with electricity. If energy storage could come to the benefit of both grid and trading companies it would make it more profitable