A decade ago, operators did not specify batteries for time shifting – storing energy from peak production for use later. At that time, the production of solar and wind energy could generally be absorbed easily by the electricity grid. Moreover, given the relatively high cost per installed kWh of battery capacity, doing arbitrage (the practice of storing energy when it is available abundantly at low prices, and releasing [ie selling] energy when prices are high) with a four-hour storage system would not have been economically viable.  

However, today we need this level of storage and BESS can provide it. The market is evolving from high-end, short-term applications where value is derived from the power capability of storage systems (eg frequency regulation or wind/solar smoothing) to more energy-oriented, longer-term durations to facilitate the renewables transition.  

Energy shifting with BESS

A key advantage to BESS is the ability to ‘energy shift’ (also known as time shifting). As intermittent sources, solar and wind power cannot be turned on or off. For example, a wind turbine may produce a high volume of energy at one point in the day, but the grid may not be able to handle all this power at once. So, it would often be curtailed.  

The major role of storage therefore consists of absorbing renewable energy when produced in excess of consumption or in excess of the transmission capacity of the grids. Currently, we see a steady increase of curtailed renewable energy, due to the ever-increasing amount of renewable generation. Sometimes, this energy is lost and, what’s more, at a relatively high economic and environmental substitution cost.

Flexibility and security of supply  

Electricity systems have two major imperatives: they need flexibility and capacity. Flexibility is needed to balance the variability of demand and supply – a need that increases with the growing penetration of variable, non-dispatchable renewable generation. Second, they need to ensure sufficient capacity to cope with peak demand to guarantee supply security for several hours, even in cases of extreme conditions (such as high consumption during cold winter evenings, or loss of a major generator). Here again, the lower predictability of renewable generators tends to increase the need for capacity reserves.  

Both flexibility and capacity reserves are typically provided by fast-reacting, peak generation resources, such as combined cycle gas turbines (CCGT).  

As we strive towards net zero by 2050, batteries could play a crucial role to capture and value precious zero carbon electricity which could otherwise be lost due to curtailment, as well as to substitute vital – but currently fossil fuel based – flexibility and capacity resources.  

Battery storage is becoming increasingly competitive – delivering peak power at a cost similar to a gas peaking plant. In the US, tenders have already been awarded to BESS rather than gas peaking. In the EU, because energy costs have increased, any battery storage-based function is now a more profitable venture than it was before.  

A question often asked by investors is ‘will this situation last? Will electricity still be so expensive in five years’ time?’.  

I believe the answer is likely to be yes – we will have to live in a world of scarcity of multiple resources, including energy. The silver lining, however, is that this will prompt industry leaders and policymakers to wake up to reality and respond – by treating our electricity as if it were as precious as our money.

While the overall cost of Li-ion battery energy storage has reduced significantly over the last decade, it has risen by 15% in the last 12 months due to the increase in raw material costs. Thankfully, the news is not too bleak here; it is not a shortage of natural resources that caused this but a reduced capacity for industrial refining. Therefore, any raw materials cost increases have likely plateaued, but the cost of BESS is still set to drop.  

Latest BESS developments

Currently, we are seeing increasing trends in the digitalisation, energy density and scale of BESS.

Increased digitalisation of BESS has many benefits overall – namely that it enables real-time management of the system and reduces downtime and maintenance costs as a result. Modern digital platforms allow BESS to be managed more efficiently. Data interfacing with the cloud gives the operator remote control over all operational parameters of their system. It also allows them to automate and monitor key performance indicators (KPIs).

For example, a contract might specify that the storage system shall provide a minimum energy amount of X MWh at 98% availability. With a system like Saft’s I-Sight, the digital platform will monitor performance of the system in real-time to ensure it is delivering on that KPI. If performance deviates, the platform will alert the customer and Saft, enabling them to take corrective actions immediately.

It is also beneficial for pre-empting major issues. In the past, it was not possible to have real-time updates on whether performance was in line with expectations – operators only realised when it was too late, after an issue had occurred. The sooner an operator is aware of a developing issue, the sooner they can mitigate and take actions that prevent it developing. By reconfiguring modules remotely, it’s possible to resolve most issues without ever needing a site visit. Today, only one in every 10 cases now requires a site visit.

Furthermore, even when an on-site visit is required, the problem has been diagnosed beforehand. Therefore, the technician knows exactly what the issue is, what tools to bring and what needs to be fixed, thus reducing time to repair.

Growing scale

The overall size of systems is also on the rise. Just five years ago, a 5 MW system was considered big. Today, we are starting to see single installations at the GW level. To accommodate this requires more BESS containers.

This brings us onto a major challenge. In a world where systems of 50, 60 or even 100 MW are becoming the norm, how do we account for the need to economise on space? A smaller system footprint is advantageous because installation becomes less complex – less civil work and installation time is required, and fewer cables are needed overall.  

With modern systems, the energy capacity per container has increased from 2.3 MWh to 3 MWh. This is provided by greater energy per module and enhanced system design. 

But it is not only energy density of the battery container that has helped, it is also the way in which these containers are installed and connected together. For example, in the past, the heating, ventilation and air conditioning (HVAC) needed to be installed externally. Now, HVAC is integrated within containers.  

The same is the case for blast panels – previously these needed to be top-mounted on-site. However, these can now be mounted at the factory, making the containers more ‘plug and play’. These measures save around one to two hours per container installation which, when installing 100 containers into one system, makes for a significant time reduction.

In addition, scaling up systems is challenging in terms of control. The electrical power conversion system (PCS) always sees multiple BESS containers as a single entity. This can prove complex because, without adding control systems, the controller may experience a ‘drift’ between the actual state-of-charge (SOC) and the measured SOC.  

To address this, we have developed a control system known as ‘the Cube’ which is able to manage up to eight containers in parallel with accuracy. A typical configuration for a four-hour shifting service thus consists of one 4 MW PCS connected to a line-up of six Intensium Shift containers (ie an 18 MWh battery entity). These can be scaled up to tens or hundreds of MW by replicating identical line-ups.  

Finally, the installation requires consideration of safety distances, and the need to allow fire fighters and maintenance teams to easily access the battery containers.  

In summary, the increased energy density of the container building blocks, combined with advanced controls and a space-saving plug-and-play installation, now enable us to conceive utility-scale BESS for two to eight hours of energy shifting applications at 50% reduced floorspace and installation time.  

Current regulations and next steps

In the US, solar plus storage is already a well-established market and shifting energy by a few hours is common. The rise of solar is largely driven by tax incentives given for establishing initial PV farms, or PV farms with co-located storage. The recent Inflation Reduction Act (IRA), for example, increases the amount and duration of such tax incentives and extends them to standalone batteries, too. This will further boost storage investments in the US, knowing that 30–40% of PV operations currently come with storage.

In contrast, the EU energy market is driven by grid services, such as primary and secondary frequency regulation, meaning storage durations often do not exceed one hour. The increasing use of renewables, and their ability to produce high volumes of energy in bursts, means that longer-duration BESS must also be developed in Europe so that energy is not wasted.  

Capturing what is produced

More than ever before, the energy crisis has forced us to view electricity as a precious resource. While there has been less incentive for BESS in Europe up to now, the tide is turning. As renewables become more commonplace, the energy they produce must be captured, stored and be ready for deployment when it is needed. Failure to do this will result in a considerable amount of wasted energy.