Business & Industry Energy storage

Grid operators turning to batteries as costs fall and need for flexibility rises

Engineering News, 28 November, 2017

The standalone cost of battery energy storage remains above South Africa’s prevailing, albeit rising, electricity tariffs, but could already be commercially viable in some instances when the “stacked benefits” of the technology are taken into account.

A levelised cost of electricity (LCOE) study undertaken by Mott MacDonald Africa, based on a vanadium redox flow solution raging in size from 1 MW (6 MWh) to 20 MW (120 MWh), calculated the LCOE of battery storage to be between $0.23/kWh and $0.45/kWh.

The battery LCOE was already below, in some instances, the $0.40/kWh calculated for generation using diesel and only marginally above Eskom’s winter peak tariff of $0.20/kWh. However, it remained well above the $0.10/kWh LCOE associated with coal and nuclear, as well as Eskom’s summer tariff.

Nevertheless, Mott MacDonald Africa’s Paul Tuson argued that the viability of battery storage would continue to improve as battery costs declined and that, in some cases, such systems could already be commercially justified when the associated, or stacked, benefits were also considered.

Speaking at ee publishers’ SA Energy Storage 2017 conference and exhibition taking place in Gauteng, Tuson listed these as being: load or peak shifting; the provision of reactive power, load following; a reduction in losses and network congestion; grid reliability improvements; the potential to defer other capital projects; facilitating the connection of additional load; the smoothing of intermittency associated with the integration of variable renewable energy; the provision of ancillary services, such as frequency and voltage stabilisation; the replacement of expensive dieselgeneration; and improving the operation of off-grid hybrid schemes…

Even today in systems that do not have high renewable-energy penetration rates, systems operators are decoupling the ancillary services from generator dispatch. By providing all active power reserves through storage they are able to dispatch conventional generation more economically.

“My prediction is that, within the next five or ten years, all operating reserves will be delivered by storage, irrespective of variable renewable energy,” Poeller said. 

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