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Adriana Laguna

Storage: The DNO Perspective Evidence from SNS

2016. UK Power Networks. All rights reserved

• £17.2m (£13.2 LCNF award)

• 4 years (2013 - 2106)

• Location: Leighton Buzzard

• Energy capacity: 10 MWh

• Real power: 6 MW

Smarter Network Storage: Innovation

Partners

Suppliers

2016. UK Power Networks. All rights reserved

Smarter Network Storage

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We are the first to deliver multiple services to the DNO and TSO through different contracting mechanisms

Our system schedules the battery’s activities and dispatches the storage system when required

We have provided BEIS, Ofgem and the industry insight to the regulatory and commercial barriers of storage

We have built, developed and now operate a

6 MW / 10 MWh energy storage facility

We have published analysis on different business models and value of available services

2016. UK Power Networks. All rights reserved

What were we trying to understand?

• Technical functionality: is it really multi-purpose?

– Support distribution network

– System stability

• How fast can it respond?

• Can it do several things at the same time?

• Is there value to customers from investing in this technology?

2016. UK Power Networks. All rights reserved

Operation and value

• How does SNS support the network?

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33/11kV substation Leighton Buzzard

town

Wind farms

Grid scale PV

TSO

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Peak shaving: SNS trial results

• Best value for the DNO: deferred reinforcement: £6.2m – increase the capacity of the

Leighton Buzzard substation

• Provision of the service with Active Power, Reactive Power or both

• There are synergies in providing local network relief and reducing congestion at GSP

• Total requirement: 97 hours, 48 days, 19.9 MVAh/day max 6

2016. UK Power Networks. All rights reserved

Voltage support

• The reactive capability of the

plant can add value in the power

factor correction and the voltage

support of the network

• Provision of the service with

Active Power, Reactive Power

or both

• Can reduce losses, improve the

power quality and extend the life

of the local voltage control

system

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SNS exports or imports

reactive power to retain the

voltage within the set limits

2016. UK Power Networks. All rights reserved

Multipurpose capabilities

• SNS demonstrated the provision of different services utilising its Active and

Reactive power capabilities

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SNS provides Dynamic

FFR utilising Active power

SNS provides Voltage

control utilising Reactive

power

2016. UK Power Networks. All rights reserved

What did we learn?

• Energy storage operators need to encompass load

forecasting, price forecasting and risk management skills

in order to optimise operating schedules and maximise

the value of the asset

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2016. UK Power Networks. All rights reserved

Key findings

The energy storage plant should not stay idle due to the auxiliary

consumption and the running connection costs

Not all services are economically favourable for an energy storage system

Firm Frequency Response is currently the highest valued commercial

service for storage

Multiple provision of services provide higher value (i.e. FFR with capacity

market)

Profitability of tolling is currently low but depends on the market conditions

and the continuous monitoring in operations

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2016. UK Power Networks. All rights reserved

Does SNS stack up?

• Four key factors determine the business case for storage:

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Capex Opex Revenues Financing

2016. UK Power Networks. All rights reserved

Size of storage is critical to the cost

• To provide a response of under one second and sustain for 15 minutes…

you only need 0.5 MWh for each MW

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EFR

Firm Frequency Response

Short Term Operating Reserve

Distribution peak shaving

15 min 2 hrs 30 min

2016. UK Power Networks. All rights reserved

Key variables for storage CBA

• Cost of storage

–Not just batteries!

–Depending on the size and location specific

• Revenue streams – certainty on income

• End value assumption – what will the asset be worth in

10 years?

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2016. UK Power Networks. All rights reserved

Insights from SNS

• Targeting and capturing value from the current balancing services is

essential for project economics, but specialisation around today’s products

carries risk

• Developing storage projects to provide a single service for a short term is

not efficient for the electricity system in the medium and long term

• There is a balance to be struck between pursuing short-term value and

catering for longer-term uncertainties

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Recommendations

• Whole system approach to service and product design to integrate battery

storage effectively

• Improve visibility of opportunities for batteries to provide services to DNOs

and the framework within which this operates

• Explore the possibility to provide access to longer-term contracts to improve

revenue certainty and mitigate risk

• Define storage as a distinct activity to enable the market

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2016. UK Power Networks. All rights reserved

SNS: a fundamental contribution

Smarter Network Storage has been fundamental in informing the industry

on the how the uptake of storage can materialise. The regulatory barriers

unveiled by the project are now the basis of the government’s policy

agenda

National Grid have the best leverage to trigger the market. However, there

are no drivers for developers to connect storage at specific distribution

network locations

DNOs must work collaboratively with NG to ensure we bridge the gap

between TSO services provision and DNO potential requirements

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2016. UK Power Networks. All rights reserved

Future of storage looks bright

Increasing need for flexibility

For system stability

For electricity network

Improving enablers

Falling storage costs

Increasing storage experience

New services development

Increased focus on storage

Stronger business case for

storage deployment

2016. UK Power Networks. All rights reserved

We are leading the charge on storage

Making transition to BAU simpler

Developed the ENA storage

application form

Conducting storage surgeries

for customer

Making storage information accessible

Published two guidance for

storage

Leader on storage heat maps

Starting trials for further DSO capabilities

Domestic Energy Storage and

Control project

Transmission & Distribution

Interface 2.0

2016. UK Power Networks. All rights reserved

Going forward

• We will seek flexibility services next year

• We must continue to collaborate with government and regulator on

addressing the regulatory challenges

• We will work with the System Operator to improve our interface

• We will always seek the lowest cost solution for our customers out in

the market

• Where the market cannot provide our requirements we should not

be excluded from building and operating storage solutions

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2016. UK Power Networks. All rights reserved

More Information available at:

http://innovation.ukpowernetworks.co.uk