Green flexibility is coming

The increasing need for flexibility arises from the expanding share of intermittent generation from wind and solar resources, presenting a significant challenge. It is imperative to implement green flexibility solutions in order to achieve full decarbonization of the power system. Alongside demand-side response, battery energy storage technologies play a pivotal role in addressing the growing demand for flexibility. This importance is underscored by EU policy directives mandating every member state to conduct regular flexibility assessments, establish targets for non-fossil flexibility resources, and provide support for their development [1]. Notably, countries such as Croatia, Greece, Hungary, Romania, Slovakia, Slovenia, and Spain have already endorsed state-aid schemes to bolster the development of battery energy storage systems (BESS).

Opportunities and challenges

Despite the subsidies available to project developers and financiers, there are lingering concerns that impede the swift deployment of BESS. Revenue uncertainty emerged as a recurring theme during discussions at the Energy Storage Summit in London, one of Europe's largest energy storage conferences. This issue is twofold, encompassing challenges related to accessing energy, ancillary services, capacity, congestion management markets and trading/dispatch strategies. The former aspect is particularly pertinent to the Baltic region, where a developed flexibility market for ancillary services is lacking. This market will need to be established [2] post-synchronization with the continental European network (CEN) and upon joining platforms such as MARI and PICASSO for manual frequency restoration reserves (mFRR) and automated frequency restoration reserves (aFRR) respectively. The latter aspect varies depending on the country where BESS is operated. Presently, in the Nordics, batteries primarily generate revenue by providing frequency containment reserve (FCR) services, whereas BESS operators in other countries derive the majority of their revenues from different services (aFRR, mFRR, energy arbitrage). Consequently, developing the appropriate trading strategy, which accounts for market nuances and technology limitations (such as depth of discharge (DOD), degradation curves, and number of cycles), is imperative to maximize value generation.

As the demand for ancillary services gradually increases (as depicted in Figure 2), the market is projected to reach saturation. Consequently, Battery Energy Storage Systems (BESS) are anticipated to derive most of their revenues from energy arbitrage and energy markets. Ensuring the high availability of BESS requires mitigating deployment and operational risks.

During the charging and discharging processes of BESS, energy is released in the form of heat due to electrochemical reactions. Effective thermal management is essential to counteract thermal fluctuations, which can accelerate aging effects and compromise battery performance. Furthermore, the risk of battery overheating can potentially lead to fire outbreaks, resulting in significant losses and extended downtimes. Therefore, the implementation of fire suppression systems is crucial to guarantee the reliable and safe operation of BESS.

References

1. Flexibility solutions to support a decarbonised and secure EU electricity system (europa.eu)
2. the_smarten_map_2022_DIGITAL-2.pdf
3. FRR_dimensioning_forecast_2024-2031_0.pdf (elering.ee)