Locational electricity pricing
I forgot to add this FT piece yesterday on battery storage:
Hmmm. @lucia - that FT article didn't distinguish between commercial storage batteries which can re-export to the grid,
and those installed at the final point of need (homes, offices, hospitals etc.)
The two classes of battery provide quite different benefits, and respond differently to fault conditions.
To view the grid-tied commercial battery sites for which consent has been granted, look at the map published by Barbour ABI, using data supplied by DESNZ.
Choose the energy type(s) you're interested in from the menu-bar to the left.
There are more than 1500 storage sites on the map.
You can click on each pin to obtain further information.
The data isn't stunningly accurate.
For example, there are pins still present for sites where consent has been withheld or withdrawn.
But I acknowledge that removing data is more tricky than adding it.
The FT article also fails to differentiate between batteries with short-term storage, and those required to take us to Net Zero.
Short term batteries are plentiful. They tide over the two or three hours after the sun has set or the wind-speed dropped.
But in their submission to the (previous) Parliamentary Select Committee on ESNZ in Sept'23, National Grid ESO (RIP) provided a forecast that the country requires storage mechanisms lasting 200+ hours. That's longer than the highest category which DESNZ had 'recognised' to date.
If that strategy were implemented by NESO it would also require a level of electricity infrastructure upgrades costing us more than HS2.
So I disagree with it on both financial and technical grounds.
I believe the better approach is to use Locational Tariffs and local storage.
Save energy... recycle electrons!
But in their submission to the (previous) Parliamentary Select Committee on ESNZ in Sept'23, National Grid ESO (RIP) provided a forecast that the country requires storage mechanisms lasting 200+ hours. That's longer than the highest category which DESNZ had 'recognised' to date.
I 'think' that is the type of battery (large storage) the FT article is referring to - although she refers to skip rates so probably not as large storage as these 200+ hours monsters (as they must exist already?).
I agree she is woolly in her definitions but I think it is a news letter so it's probably preaching to a choir.
Commercial grid-tied Battery Energy Storage Systems (BESS) are rated according to their 'capacity'.
Annoyingly, that is defined by National Grid as the maximum power allowed to be exported/imported through the grid connection.
It's usually given in megawatts (MW).
I don't like them using 'capacity' in that context, because it is usually the case that the amount of energy stored within the battery (in MWh) is called its capacity.
I'm going to suggest that the majority of grid-tied storage batteries on the DESNZ database are rated at 49.9MW
That's the maximum power rating permitted under EREC G99 regulations for which a Local Planning Authority may be presented with a Planning Application, and for which a Generation Licence isn't required.
Generation and Storage connections of 50MW and above are required to be referred to the Planning Inspectorate, where they are called Nationally Significant Infrastructure Projects (NSIP).
Having followed a number of applications through the planning process, I observe that their storage capacity is commonly about twice the export-rating.
So, for a maximum permitted grid-export of 30MW, the Energy Storage company will build a battery of 60MWh.
If it were called upon to deliver its stored energy at 30MW, then it would last 2 hours.
Those typical specifications have nothing to do with optimising the grid, or providing Britain with greater resilience.
They are based purely on financial return for the investors.
Save energy... recycle electrons!
I'm going to suggest that the majority of grid-tied storage batteries on the DESNZ database are rated at 49.9MW.
So this was probably what the FT journalist was referring to?
I can't see sufficient evidence in the article to tell me whether the journalist (Pilita Clark) was aware of the 50MW G99 limit.
That's an argument which revolves around how permissions are obtained.
The issue she seems to have homed in on is the process by which the Energy Systems Operator (ESO) calls in the mix of generation and storage to satisfy demand.
The Supply/Demand calculations are done on half-hour periods, but the overall planning starts months in advance.
As Britain moves towards greater consumption of energy from renewable sources, that long-term planning is progressively less useful.
You can't assess how strong the wind will be more than a few days in advance.
There is a hierarchy of generation/storage assets which is increasingly dominating decisions over energy-mix at national level.
Seeing the available supply sources from the viewpoint of the grid, it looks like this.
The crunch point is the final column.
Wind-turbines, Solar panels and Storage Batteries all use electronics to synchronise and export power to the grid.
Electronics can fail suddenly, without warning.
Worse still, a Storage Battery has the additional risk of a software fault taking it from "Export at 50MW" to "Import at 50MW".
That's a very high risk to the grid.
Super-large storage assets present a higher level of risk than hundreds of small ones.
See this YouTube video of an interview with Claire Dykta.
She oversees the procurement planning for NESO.
Save energy... recycle electrons!
@transparent I watched that video already.
It was interesting - she's quite skilled at explaining technical complexity to beginners like me. Although interestingly, she downplays the market complexity. 😊
The issue she seems to have homed in on is the process by which the Energy Systems Operator (ESO) calls in the mix of generation and storage to satisfy demand.
Hence her reference to skip rates?
The term skip rates isn't one I've come across.
In the DNO regions operated by NGED, storage and generation assets which are connected to the Distribution Grid (132kV and below) are normally actively exporting unless they are sent a signal from the Active Network Management (ANM) system.
Before a grid connection is first made, NGED can supply an ANM plot to the company, showing times when their export is most likely to be curtailed in future.
For generation & storage sites there is no dedicated command & control pathway such as we have with Smart Meters.
Each site has its own contract/arrangement.
The owner can 'offer' electricity to meet a call made by NESO,
or it could receive income for being held on standy-by.
Save energy... recycle electrons!
@transparent According to Modo: "Skip rate” refers to how often assets or technology types get skipped in the Balancing Mechanism".
For once it actually means what it says. I hate it when I have to spend huge amounts of time trying to understand 'insider terminology' and acronyms. 😏
For generation & storage sites there is no dedicated command & control pathway such as we have with Smart Meters.
Each site has its own contract/arrangement.
The owner can 'offer' electricity to meet a call made by NESO,
or it could receive income for being held on standy-by.
So unless I'm misunderstanding it, surely this means locational pricing makes more sense? If we have more local generation and storage? Maybe with fill-from the 'big' grid if/when needed?
But we're very behind in the storage department?
Absolutely... Nodal (Locational) Pricing makes sense to everyone except the big energy companies...
you know... the ones large enough to meet with Ofgem and bleat about how the UK can't afford any more of them to go bankrupt. 🤨
There is Nodal Pricing in the wholesale market, but I haven't found any explanation of how that's meant to work since the Secretary of State for ESNZ announced it on 12th March.
The price of lithium has plummeted since the 2022 energy crisis when Russia invaded Ukraine.
The 'metal markets' had predicted a bigger swing to EVs than has actually happened.
So now is a great time to be buying 'raw' lithium cells.
Contrarywise, there has been very little decrease in the cost of ready-built domestic storage batteries.
Over 50% of their costs are in materials such as steel enclosures, copper wiring and BMS units.
Save energy... recycle electrons!
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