European Distribution System Operators for Smart Grids

Projects Insight Paper #01 Storage

March 2017

EDSO INTERNAL DOCUMENT

2

Document Information & History Name of the document: Projects Insight Paper #01 Storage

EDSO committee: Projects Committee

Publication level: EDSO Internal

Target audience: Policy Committee; Technology Committee

Authors:

Václav Janoušek – CEZ Distribuce Florian Gonzalez – EDSO for Smart Grids Gareth Bissell – Enel Santiago Otero Peña – Enel Raphael Rinaldi – Enel

Contributors:

Pedro Godinho Matos – EDP Distribuição Christophe Boisseau – Enedis Maximilian Urban – EVN/Netz Niederösterreich Markos Champakis – HEDNO Thomas Wiedemann – innogy

Reviewers: Ricardo Jorge Santos – EDP Distribuição Torsten Knop – innogy Stefan Nykamp – Westnetz

Review history V1 16/11/2016 First draft

Inclusion of contributions from members V2 05/12/2016 Inclusion of introduction, Enedis projects, e-distribuzione project V3 09/122016 Modification of introduction and e-distribuzione sections V4 09/12/2016 Clean version of [first draft sent to Projects Committee] V5 09/01/2017 [First draft after Projects Committee meeting]

Inclusion of EDSO workshop, conclusion V6 18/01/2017 Drafting of conclusion V7 18/01/2017 Drafting of technical sections V8.1 V8.2 V8.3

15/02/2017 16/02/2017 16/02/2017

New design of the conclusion New structure with “member projects” section in Annex Clean version of [final draft sent to Projects Committee]

V9 08/03/2017 Integration of feedback from EDP & Innogy V10 13/03/2017 Clean version of [final document for approval by Projects Committee] FINAL 16/03/2017 Final version approved by Projects Committee

3

Index Introduction ............................................................................................................................................ 4 Site visit & Workshop – 14 & 15 December 2016 .................................................................................. 5

Technical elements .............................................................................................................................. 5 Economic & financial aspects .............................................................................................................. 8 Regulatory issues ................................................................................................................................. 8

Conclusions of Projects Insights ........................................................................................................... 10 State of play ....................................................................................................................................... 10 Inputs for advocacy ........................................................................................................................... 10 Recommendations ............................................................................................................................ 11

To the Policy Committee ................................................................................................................ 11 To the Projects Committee ............................................................................................................ 12 To the Technology Committee ....................................................................................................... 13

Annex: Member Projects ...................................................................................................................... 13 1. EDP Distribuição MV Storage ............................................................................................................ 14

Project Description ............................................................................................................................ 14 Performance Evaluation / Use cases ................................................................................................. 14 Towards Viable Business Models – Way forward ............................................................................. 14

2. EVN/NÖ Netz Low Voltage Smart Grid “Bucklige Welt” ................................................................... 15 Project Description ............................................................................................................................ 15 Performance Evaluation / Use cases ................................................................................................. 15 Towards Viable Business Models – Way forward ............................................................................. 15

3. EVN/NÖ Netz Other storage projects ................................................................................................ 16 Smart Grid Battery Storage Project Prottes ...................................................................................... 16 Research project ................................................................................................................................ 16

4. Innogy/Westnetz “ElChe Wettringen” .............................................................................................. 17 Project Description ............................................................................................................................ 17 Performance Evaluation / Use cases ................................................................................................. 17 Towards Viable Business Models – Way forward ............................................................................. 18

5. Innogy/Westnetz “Nesla Weeze” ...................................................................................................... 18 Project Description ............................................................................................................................ 18 Performance Evaluation / Use cases ................................................................................................. 18 Towards Viable Business Models – Way forward ............................................................................. 18

6. HEDNO “TILOS” – Technology Innovation for Local Scale Optimum Integration of Battery Energy Storage” Project .................................................................................................................................... 19

Project Description ............................................................................................................................ 19 7. Enedis NICEGRID Project ................................................................................................................... 20

The project - Description of the storage cases .................................................................................. 20 Main results ....................................................................................................................................... 20

8. Enedis VENTEEA Project .................................................................................................................... 21 The project – Description of the storage cases ................................................................................. 21 Use cases ........................................................................................................................................... 21 Main Results ...................................................................................................................................... 21

9. e-distribuzione ................................................................................................................................... 22 Project Description ............................................................................................................................ 22 Performance Evaluation / Use cases ................................................................................................. 23 Towards Viable Business Models – Way forward ............................................................................. 23

4

Introduction This paper aims to address the current debate on storage and to provide additional arguments on the subject to the already published EDSO paper “Integrating electricity storage in distribution grids”. Our intention is to cover specific issues regarding involvement of storage in grid operation and management. To this end, EDSO can use direct experience with relevant technical solutions based on involvement in various pilot projects both in national and EU pilot schemes. Additional input is our involvement in the Grid+Storage project – providing even more complex knowledge regarding the progress of smart grid implementation, including storage. EDSO has therefore the opportunity to elaborate on key findings of this project and deliver concrete technical and regulatory recommendations. This exercise might be of high value, as many EU member states are tailoring at present their national policies and guidelines encompassing operation and use of storage. Outcomes of relevant pilot schemes are essential for debate with national authorities as well as for formulation of national positions concerning the upcoming EU negotiation on the “Clean Energy for All Europeans” package. There is an ongoing discussion on storage-related regulatory frameworks in Portugal, Spain, Austria, Czech Republic, Germany and Slovakia. Some Member states debated storage in terms of broader policy framework – National Action Plans for Smart Grid according to the EC Communication “Making the internal energy market work” (e.g. Sweden, Czech Republic). So far, DSOs are allowed to operate storage in Sweden, Italy and the Netherlands for grid stability purposes, provided it is cost effective solution acknowledged by the NRA.

5

Site visit & Workshop – 14 & 15 December 2016 On 14 and 15 December 2016, EDSO held specific sessions dedicated to storage projects. On the first day, the Projects Committee visited an EDP Distribuição storage site. This project is described in details in the annex of this document. Several other projects mentioned in this document and led by Enedis, Enel and EVN were also presented that day to the Projects Committee, elaborating on their specifics, findings and conclusions. On the second day, a workshop took place in Lisbon to discuss the overall return of experience from EDSO members, focusing on technical, economic and regulatory issues. The objective of these sessions was to draw conclusions from EDSO storage projects and to elaborate common messages at the European level in the framework of the Clean Energy Package that was published by the European Commission on 30 November 2016.

Technical elements On the technical side, it was a shared opinion that storage is close to a mature technology. Participants agreed that the results are promising but that further developments should be sought in order to lower its cost. The characteristics of the EDP Evora storage pilot project are to improve the quality of service by providing continuity in terms of continuity of service and using voltage control to improve power quality. The resulting impacts on both operational flexibility, provided by the storage facility and peak load shaving would have an impact on network planning and could potentially defer network CAPEX spending while integrating a higher share of renewables. The key takeaways from this pilot project would be as follows:

Need for more standardization in network connected storage solutions, Lifecycle optimization of the use of storage, minimizing power losses and battery

degradation, Performance monitoring for CBA of several grid management functionalities, Assessment of renewables integration benefits, Further Interaction and coordination with other projects or new storage projects for new

innovative business models, Continued cooperation with universities and R&D organizations, Further exploring legal and regulatory issues, Understanding storage impact for network planning, Development of algorithms for automatic centralized control.

In the EVN Battery Steady project the main targets were to demonstrate how the potential of battery storage technologies can be completely exploited by multimodal operation. Providing ancillary services for system stabilization in addition to the already established ancillary services (primary energy control and Frequency Containment Reserve.) The interaction of certain control strategies was also investigated to demonstrate universal future battery operations. Some of the operational considerations would include:

Voltage support and supply restoration process Spinning reserve Dynamic-reactive power compensation Symmetrical behaviour The interaction of certain control strategies for the realization of an operational strategy will

be investigated to demonstrate universal future battery operations

6

Enedis have identified that 30 services could be provided by electrochemical distributed storage applications. The type services and to who they would apply are illustrated below. The feasibility of these services would depend on three factors: network connection point, size of the battery and storage technologies. Services provided by storage could be shared between different kind of actors considering different typical localizations on the distribution network from the primary substation to the residential LV consumer.

The following conclusions were deduced from the Enedis Nice Grid storage systems project:

• 90% availability of network batteries after the lapping phase • 80% availability of residential batteries. 138 solicitations during 26 days were carried out • Up to 2 full charge / discharge cycles per day • Services successfully technically tested • Storage systems performances depend on the services they provide. Without the objective of

comparing them… o Global energy performance of 74 % for the Primary Substation storage o Global energy performance of 81 % for the Low Voltage network storage o Global energy performance of 75 % for the Secondary Substations storage units. o Global energy performance of 67 % for the residential storage units.

• It is essential to properly size the storage system to match the services it will have to provide. • Need to further improve the reliability of batteries and communication systems in order to

answer to network constraints. From the VENTEEA storage systems it was concluded that:

• 94% availability during the 304 experimentation days. • Up to 4 full charge / discharge cycles per day. • Global energy performance of 85% for some services. • Frequency regulation supply tests carried out by RTE. • 12 services successfully tested. • Positive environmental assessment. • The storage system can provide the services tested to the DSO, TSO and the producer. • Validation of the technical feasibility of a multi-service approach with optimal planning in

advance. • First step required to find the break-even point of an electrochemical storage connected in

MV.

7

The first economic results would show that it is difficult to conclude on the economic break-even point because some services are non-existent or limited today in the existing market mechanisms and have no value yet. Today, electrochemical storage is not economically profitable for an actor alone because a single application is generally not sufficient to recover from the investment of a storage device. Multi-services storage facilities could reach the break-even point through cost sharing between different service recipients. This profitability can be found in some cases, as for example in the Island Electrical Systems. In the longer term, the economic potential of storage will depend on factors that are still uncertain: technological breakdown and rapid decrease in the cost of storage systems, changes in electricity prices, and the share in the mix of “unavoidable energies” (especially the PV).

Storage systems, such as electrochemical storage could further be used for the needs of the electrical system by providing a source of additional flexibility. But first it is required to:

• Continue to work in terms of R&D to improve the performance and reduce the costs. • Make evolutions of the market design and the regulatory • The first economic results would show that framework in terms of service definition,

prioritisation of services (i.e. between network operators and other actors in the electricity system) and coordination

In Italy, Enel has used EESS to contribute effectively to the voltage regulation and to regulate the power flow between the distribution and transmission networks. The optimisation horizon can range from minutes to several days, depending on the reliability of the forecast load profile. The commissioning phase represents an important and challenging activity in which some of the following key issues were identified:

• Software is the risky side of the project (integration with other systems –SCADA –, cyber Security for maintenance accesses, heterogeneous degree of knowledge among actors);

• The electromechanical side of the project is less critical due to the DSO’s high level of expertise;

• Personnel training and new tools are needed for network optimal operations; • It is necessary a TLC infrastructure capable to support information exchange.

Within the innogy and Westnetz ElChe Wettringen project the Li-Ion battery, which has been in operation since September 2015 works reliably and very fast based only on local grid issues (no trading of energy or the like has been realized yet). The maximum round-trip-efficiency was measured in September with 91.4%. The mode of operation is focused on local grid oriented steering only. It has to be noticed that approx. only 1,000 operating hours per year are given since no usage in “non-critical grid situations” is enabled. Nonetheless, legal framework is unclear if and how the DSOs are allowed to use the storage asset for solving grid issues. It is shown in this project that the invest and operation of the battery in more beneficial than the conventional reinforcement because a temporary reinforcement can be avoided and the battery has been designed as a “mobile” solution for the integration of PV. From the Nesla Weeze project the main question to be answered is how the “multi-use-case” can be realized while being consistent with the current legal framework and the unbundling rules. Various options were proposed and these are illustrated in the three models below considering who owns and operates the storage facility and the associated market framework that would be expected for each.

8

Economic & financial aspects

Storage is for now an expensive technology, as capital cost of storage systems is located around 500€/kWh. This figure does not include operational costs, which in turn could be high because of the necessity to ensure personnel training and frequent maintenance. It is likely that the cost of storage will be brought down as technological progress and dissemination will step up. That is why further demonstration and technological development are necessary and therefore DSO should not be prevent from promising perspectives in this field. However, it will probably still represent an expensive technology, which is not adapted to a single use such as for grid purposes only. So far, among projects that were implemented by EDSO members, no satisfactory business cases have been found yet. It is due to a various range of reasons related not only to technology maturity or to regulatory issues. Storage technologies require maintenance on a permanent basis for limited time of use if only for grid purposes. For now, no stable market model exists in Europe to conclude on a possible break-even value of storage for this purpose only. Moreover, an overall lack of certainty exists throughout Members states and even more at the European level. The absence of definition of storage and overall uncertainty about provision of storage services by the market makes the economic evaluation of these technologies even more difficult.

Regulatory issues Regulatory issues are particularly sensitive in relation with storage technologies. Indeed, storage is often considered as a generation asset, therefore it is seen as unsuitable for DSOs to own and operate storage systems because of unbundling reasons. This problem applies also, and probably to a larger extent, to TSOs. Also, significant for DSOs is the need to prove that storage is a necessary asset to address the upcoming challenges.

9

The complex stance of policy-makers and regulators on this issue is one of the strongest barriers to the development of storage for grid operators. In Italy, a positive CBA is a prerequisite to the setup of a storage project. In France and Germany, the DSO can manage storage facilities only in the case of demonstrators. In Portugal and in Czech Republic, there is no regulation or legislation that encompasses DSO activities in the field of storage. In Spain, Iberdrola established a storage project with its own means. At European level also, the very absence of definition of storage hampers the definition of its place in relation with the future roles of the DSO. This state of play prevents further development of this tool that could provide flexibility to the DSO in an efficient manner. In order to solve these issues, it should be underlined that an effort should be made to establish at national and European levels:

• A definition of storage; • A list of storage services and solutions; • A definition of roles and orders of priorities among stakeholders; • Rules for coordination between actors; • Rules clarifying the right of the DSO to own, operate and use storage systems.

Moreover, it should be underlined that solutions could be developed that would allow at the same time the ownership of storage by the DSO, the enforcement of unbundling rules and the optimisation of storage capacities through shared use of storage systems.

10

Conclusions of Projects Insights State of play

On the basis of the experience derived from the projects led by EDSO members, it can be concluded that storage is now close to be a mature technology, at least when it comes to use cases related to grid operation. It could fulfil a significant range of use cases and some projects have proved that unbundling provisions should not completely rule out the possibility for DSOs to own, manage and use storage systems as creative solutions. However, further developments are necessary in order to make storage technologies fully operational:

• From a technical point of view, further research is absolutely necessary to bring down the current high costs associated with storage. This represents a clear prerequisite to a sustainable use of storage services by the DSO. Initial R&D support is certainly needed to bring technology costs down. DSO fully expects storage technologies to become competitive over time, as the share of renewables in the European power system increases and the advantages of electricity storage in integrating these sources become increasingly clear.

• The success of electricity storage will depend on the economic merits of storage technologies compared to other flexibility alternatives, most notably demand response or flexible generation. A decrease in equipment and operational expenditures would create positive business models that are for now almost non-existent.

• The development of multi-use-models considering unbundling rules and (dis-)incentives for grid operators to own storage systems or contract the flexibility offered by such systems needs to be fostered. Thus, “regulatory innovation” is required. This is important for an efficient integration of storage systems, especially when considering the effect of possibly increased grid costs due to uncontrolled storage operation of other purposes.

• These business models should also take into account creative initiatives that show a potential for multiple use of storage despite ownership by the DSO. A great care should be taken to ensure that this does not trigger arguments in favour of the exclusive supply of storage systems by independent third parties

• Stable and clear regulatory frameworks are also needed to ensure the sustainability of these business models.

Inputs for advocacy

DSOs have thoroughly investigated the field of storage, not only in projects but also from policy and regulatory points of view. EDSO has taken an active part in the Horizon 2020 Grid+Storage project and continuous dialogue with European institutions on this issue. However, the position of DSOs regarding storage still lacks understanding from policy-makers and regulators. Deriving from projects, several arguments could be put forward when advocating in favour of DSO ownership, management and use of storage. Moreover, this potential value of storage solutions for grid purposes has been well identified at national and European levels. The 10-year Research & Innovation roadmap covering 2017-2026 that was endorsed by the European Technology & Innovation Platform on Smart Networks for the Energy Transition (ETIP SNET) mentions “Integration of storage in network management” as a functional objective of the European energy research1. In addition, storage is included in two DSO priorities for R&I in the related Implementation Plan for 2016-20182. It can therefore be observed and should be

1 ETIP SNET R&I Roadmap 2017-2026 2 Integrated Implementation Plan of R&I activities 2016-2018, with two topics related to storage

11

highlighted that storage is recognised by European energy R&I strategy documents as a solution that could provide flexibility to the energy system through DSO activities. Considering this, the strong policy stance taken on storage by the European Commission in the Clean Energy Package can be considered as a premature and incoherent gesture.

• Firstly, the lack of national or local frameworks for large experiments have not allowed the practical realisation of experience or evidence on this issue.

• Secondly, preventing the DSO from engaging in storage would contradict European R&I strategies that identify this topic as a key flexibility provider for smart grids.

• Thirdly, this would put an end to R&I efforts that have been carried out by DSOs at the most critical moment: now that this technology only reaches maturity but only lacks sustainable business models.

This draws light to another issue: the potential lack of opportunities that may arise in case DSOs are forbidden to own and manage storage systems. The risk of market failure is high as there is no certainty that grid purposes will be sufficiently regarded by market parties when deploying storage systems.

Recommendations Deriving from the experience gained by EDSO members through projects, and considering the current situation, the Projects Committee proposes several actions to be taken:

To the Policy Committee 1. Underline the inconsistency of preventing DSO from owning or managing storage

First and foremost, the Projects Committee thoroughly questions the timelines of the provision included in the current version of the Clean Energy Package that would a priori forbid ownership and management of storage systems by the DSO. As it was mentioned in the previous section, this measure contradicts the energy R&I strategy. But it also lacks consistency, as research projects now tend to legitimise the use of this technology for grid purposes and there is still no evidence that leaving it to market parties alone would provide the highest social welfare. Optimizing the commercial returns of investments in storage systems requires agreements with all the actors. Storage should be owned and managed by different players. Depending on storage technology and commercial and regulatory incentives, these actors will use their storage facilities for market-oriented energy management purposes or for the provision of system services to the distribution network, in which case they should be purchased by the DSOs, to ensure the stability of the electrical system, thus optimizing the DSO business. Therefore, the roles of the actors involved should be clarified by the competent authorities Reasoning: First of all, it should be reminded that, to the DSO, storage solutions represent a flexibility tool among others. Flexibility will be at the core of the energy system of the future. It will be decentralised; large penetration of RES will rely on flexibility (e.g. storage) and will therefore need smart tools to adapt to these changes and foster smart grid management and operation. Storage does not represent a silver bullet to the DSO, but an instrument that will provide promising solutions for active system management. Additionally, the use of storage systems for grid purposes requires data that can only be handled by a regulated actor such as the DSO. This is particularly true for SCADA systems to which storage should be directly connected, as was found out in several projects. This type of sensitive applications is necessary to make the most of storage services, but cannot be made available to market parties.

12

2. Investigate potential exceptions as foreseen in the Clean Energy Package

In its current wording, article 36 of the Electricity Directive3 does not leave much room for ownership, management and use of storage by the DSO. However, it does not ban it completely, as some specific exceptions exist. It must be underlined that the formulation of this article corresponds to the current regulatory environment in most European countries. The scope of these exceptions and the likeliness that they may be of use in practice remains to be assessed. Reasoning: The difficulty that DSOs experience in implementing storage project translates a lack of coherence in European R&D policy, as this topic is mentioned as a functional objective of the ETIP SNET roadmap developed with the Grid+Storage project. The Implementation Plan for 2017-2019 refers to storage as one of the priorities for energy technologies in this period of time. Indeed, storage technologies have already been thoroughly investigated by DSOs. As shown in this paper, EDSO members have invested in many storage projects of various kinds and it was pinpointed that, thanks to this, storage for grid purposes could soon reach technological maturity. In comparison, market parties have left DSOs unaware of technological or business breakthroughs that could support network management and operation. Although we do not possess aggregated statistics about projects led by market parties, it is notable that very few EDSO member have been associated to storage projects led by market parties.

3. Research added value for social welfare of ownership and management of storage systems by the DSO

Current DSO projects related to storage have provided valuable findings and led to technological improvements. However, they have not provided evidence yet of an overall benefit to the society from the ownership and management of storage by the DSO. This issue should be further investigated in order to support EDSO position. Some storage systems are starting to enter the market. The EC can facilitate the expansion of activities that test small and large-scale applications by creating new financing options. Advanced storage technologies, as well as demonstration projects at the distribution business level, require R&D incentives that are necessary to gain experience and trust. It should also be noted that DSOs have unique knowledge in assessing the locational value of a storage systems. As a regulated entity and local actor, DSOs are best suited to deploy storage systems at the most efficient spots of the energy system. This is even more acute in the currently rising decentralised energy systems. Moreover, again because DSOs are regulated entities, this knowledge may relate to private information that cannot be shared with market parties. In addition, there is also a need for coordination among different (market-) and grid stakeholders. Several studies (e.g. “DENA Verteilnetzstudie”) have proven for Germany that pure market-driven operation of storages may lead to additional grid reinforcement measures. To the Projects Committee

4. Liaise with market actors Lack of awareness about solutions that could be provided by market players, including their current research projects, leads to uncertainty that adds up to an unclear regulatory framework. Fostering contacts with market actors involved in storage research, not only from a technological point of view

3 Directive […] on common rules for the internal market in electricity (recast); see COM(2016) 864 final/2

13

but also in relation with business models, could provide a clearer overview of potential solutions. It could also widen EDSO lobbying options at the European level.

5. Seek business models that could combine ownership or management by the DSO with non-regulated activities

In the current situation, storage technologies suffer from two opposing flaws: • DSO ownership and managing of storage systems is forbidden a priori because storage is

considered a market activity • Projects have shown that it is extremely difficult to get positive CBA from storage systems

only carrying out grid-related activities. Therefore, finding ways to use the full potential of storage system (i.e. not limited to regulated activities / grid purposes) while ensuring independent ownership and management by the DSO is of highest importance. The issue is that storage will provide economic benefits difficult to assess and not only DSOs, but also all the players in the value chain will benefit from storage systems. Establishing a market framework to assess storage value flows for all stakeholders would enable the relevant authorities to support their development and make investment decisions accordingly. Specifically, they should focus on storage contributions to renewable integrations and DSO network planning. To the Technology Committee

• Need for more standardization in network connected storage solutions • Lifecycle optimization of the use of storage, minimizing power losses and battery

degradation. • Assessment of renewables integration benefits. • Further Interaction and coordination with other projects or new storage projects for new

innovative business models • Continued cooperation with universities and R&D organizations. • Further exploring legal and regulatory issues. • Understanding storage impact for network planning. • Development of algorithms for automatic centralized control.

Annex: Member Projects Six EDSO members contributed to this Projects Insight Paper through the presentation of one or two projects each:

1. EDP Distribuição MV Storage 2. EVN/NÖ Netz Low Voltage Smart Grid “Bucklige Welt” 3. EVN/NÖ Netz Other storage projects 4. Innogy/Westnetz “ElChe Wettringen” 5. Innogy/Westnetz “Nesla Weeze” 6. HEDNO “TILOS” 7. Enedis NICEGRID Project 8. Enedis VENTEEA Project 9. e-distribuzione

14

1. EDP Distribuição MV Storage Project Description

EDP Distribuição, as the main Portuguese DSO, is responsible for ensuring an adequate and reliable electric power supply to meet society’s needs, within a controlled and thorough risk and cost control approach. As a part of the roadmap to achieve this mission, the company developed its own smart

grid vision, with a strong focus on technological innovation and knowledge retention. Energy storage is one of the company’s priorities, so EDP Distribuição started working in several electric storage projects. This document refers to one of these projects, a 472 kW / 360 kWh lithium battery Energy Storage System (ESS) connected to the MV grid and to the secondary substation of the Évora University, in southern Portugal.

Since the commissioning of the ESS, by the end of 2015, EDP Distribuição has

been working along with its industrial partner, Siemens and academic partner, INESC-ID to implement, test and further develop the key use cases of this

project. This includes the development of algorithms for the system control in the different function modes, the development of test protocols for addressing operation safety concerns and the study of technical and

economic viability of the use of storage for the different proposed use cases.

Performance Evaluation / Use cases One of the key components of this ESS, still under development, is the performance monitoring system. This system enables the centralization of data from key components of the storage as shown in the figure below. The historic data collected is used to evaluate critical aspects like:

• Roundtrip efficiency • Correlation between ambient temperature and the AC / auxiliary services power

consumption • Battery degradation profiles taking into

consideration the depth of discharge, intensity of charge / discharge, voltage and temperature at module level.

• Critical system behavior like short circuit current, voltage and frequency recovery times. Quality of energy supplied in the different functioning modes.

• Overall system reliability and availability

Towards Viable Business Models – Way forward The current developments of the project are being done in parallel with the study of the legal and regulatory frameworks involved in the use of electrochemical storage owned or operated by DSO’s like EDP Distribuição. The combination of these inputs with the results coming from the technical and economic analysis described and above will enable a holistic evaluation of different business models for the use of electrochemical storage for grid management purposes.

15

2. EVN/NÖ Netz Low Voltage Smart Grid “Bucklige Welt” Project Description

NÖ Netz runs a Smart Grid with small Windmills, a 10 kWp PV plant and a Vanadium-Redox-Flow-Battery with 10 kW power and 100 kWh energy capacity (cellcube 10/100). The load consists of several applications, which can be switched on and off by the controller. Their power is between 0.4 kW and 9 kW. The windmills belong to a windmill test field. The numer and power of the windmills vary over the time: up tot en windmills with a generating power from 1.5 kW up to 6 kW.

Performance Evaluation / Use cases A Microgridcontroller forecasts the renewable production according to the weather forecast and controls the battery in a so called peak shaving mode. This allows the smart grid applications to satisfy the load with most of the renewable energy, either directly, when produced or later (e.g. in the evening) from the battery. Once the medieum voltage supply fails, the battery can start and run the island mode on ist own, which increases the security of supply fort he load/customers. The load applications can be switched from the Microgridcontroller and are classified in sensible must run applications and other which can be switched off. In island mode only the must run applications are supplied, tha others are switched off. A third operationg mode, grid support mode, can be managed by this smart grid setting. Within this mode the renewable generation covert he load and the rest together with the energy from the battery is injected into the medium voltage grid with a power setpoint to prevent congestions there and keep the balance.

Towards Viable Business Models – Way forward Once the secure technical operation of thes set up with the three modes is has been proven, the microgridcontroller will be put in operation with “real customers” together with service bundles to prove the whole business case.

16

3. EVN/NÖ Netz Other storage projects Smart Grid Battery Storage Project Prottes

Netz NÖ will erect a large battery system based on Li-Ion technology sized 2,5 MVA and 2,2 MWh at the location of a 110kV/30kV substation. The substation is in a section of Netz NÖ`s grid with a high injection of wind energy. The aim of the project is to present how battery systems can contribute to system stability in addition to the contribution for covering the ancillary services in the electrical grid with high share of renewable power producers. The containerized system will be operational in June 2017.

Research project A research project, funded by “Österreichische Forschungsförderungsgesellschaft” (FFG) and “Umweltförderung Kommunalkredit Public Consulting” (KPC) was set up together with research partners Vienna University of Technology (Institute of Energy Systems and Electrical Drives, Research Group Power Systems) and Austrian Institute of Technology (business unit electrical energy systems). The goal of the project is to demonstrate how the potential of battery storage technologies can be completely exploited by multimodal operation, where further ancillary services for system stabilization in addition to the already established ancillary services (primary energy control

(Frequency Containment Reserve), voltage support and supply restoration process) can be provided in combination. Spinning reserve, dynamic-reactive power compensation and symmetrical behavior count to such further ancillary services for system stabilization.

Especially the interaction of certain control strategies for the realization of an operational strategy will be investigated to demonstrate universal future battery operations. This can solve challenges of the grid operation, caused by decentralized and renewable power production and the resulting displacement of conventional centralized power plants. Furthermore the possibility of a black start in an island grid operation, taking into account involvement of renewable power production, will be examined. The above-defined operational modes will be investigated theoretically in an offline simulation, which will be validated in laboratory and field tests afterwards. Eventually a practical realization of the defined operation strategies will be implemented in a continuous storage operation. Parallel to technological analyses an economical estimation of the implemented combined ancillary services provision will be executed. Based on these findings, the required regulatory framework will be extrapolated. Finally, scalable future solutions will be deduced from previous investigations.

17

4. Innogy/Westnetz “ElChe Wettringen” Project Description

With the project “ElChe Wettringen”, Westnetz as the largest DSO in Germany and part of the innogy group has found a solution for an expedient integration of photovoltaic generators in the grid with an electrochemical asset (250 kW / 1MWh) as a technically interesting and beneficial alternative to conventional reinforcements.

The chosen place for this installation is a typical community in the Münsterland, Germany. It is clearly visible in the load profiles of such regions that the task of the distribution system operator (DSO) has changed significantly. In such rural regions of the Münsterland the renewables may generate up to 20 times more electricity compared to the local consumption in the low and medium voltage grids in certain times of the year. This situation leads as well to voltage problems in some low and medium voltage systems due to the decentralized feed-in as to load issues (predominantly 10-/0.4-kV transformer, but also 30-/10-kV transformer and 10-kV-lines). Currently, storage assets are still too expensive for being a commonly used alternative to grid reinforcements but in this case, the “business case” is given due to the following circumstances. These circumstances are explained based on the recently used strategy with conventional reinforcements:

1. 10-kV-reinforcement is required to cope with local voltage problems; however, no affection of upstream and downstream load problems is achieved (2015) → blue line, marked with “1”.

2. UA Wettringen and UA Neuenkirchen (30/10-kV) will be dismantled and target grid substation UA Maxhafen (110/10-kV) will be constructed (2019) → orange circle, “2b”. This investment is needed for enabling a further growth of renewables and adapting the grid structure to current and future needs with higher capacities to be transportable to the upstream grid levels.

3. 10-kV-target-grid cable is required for renewed integration (2019) → green cable “3”. This asset enables the supply of the substations in the rural regions with non-critical voltage values again because using the existing infrastructure would lead to load and voltage issues due to the increase length and the reduced short-circuit power.

4. Hence, the 10-kV-reinforcement (1.) is in principle not required anymore since the additional capacity of this cable is useless at this location in the grid; instead, a “mobile storage asset” would be beneficial (also from a welfare point of view, DSO-owned and operated) to be used as a temporary solution and since the battery can be used on other grid locations with similar problems after 2019.

The meaningfulness is given due to the temporary usage of the storage asset whereas reinforcement would have been a stranded invests for the grid operator and the society.

Performance Evaluation / Use cases The Li-Ionen battery is in operation since 09/2015 (R&D-test, innogy and Westnetz) and works reliably and very fast based only on local grid issues (no trading of energy or the like is realized). The maximum round-trip-efficiency was measured in September with 91.4%.

18

Towards Viable Business Models – Way forward The mode of operation is focused on local grid oriented steering only. It has to be noticed that approx. only 1,000 operating hours per year are given since no usage in “non-critical grid situations” is enabled. Nonetheless, legal framework is unclear if and how the DSOs are allowed to use the storage asset for solving grid issues.

5. Innogy/Westnetz “Nesla Weeze” Project Description

The project Nesla in Weeze (Germany) will be realized by Westnetz and innogy in 2017. The system (200 kW, 1000 kWh) will be realized in an area with a surplus of renewable energy in time periods with shining sun. The goal of the project is to:

• Demonstrate multi-use case application. Battery system is used primarily for peak shaving and voltage support (approx. 7000 h p.a.) and offers flexibility for the rest of the time non-discriminatory to the market (e.g. frequency response, intraday arbitrage)

• Demonstrate innovative technology that has the potential to outperform lithium-ion on cost and ecological footprint (Zynth-air-technology)

• Demonstrate new DSO operating models in order to enhance discussion of new business models and the legal framework (unbundling)

The technical parameters are 200 kW / 1000 kWh, 400 V.

Performance Evaluation / Use cases First insights in the Performance of the storage will be available after the realization of the Project in 2017.

Towards Viable Business Models – Way forward Main questions to be answered is how the “multi-use-case” can be realized while being consistent to the legal framework (unbundling rules). Options are:

19

6. HEDNO “TILOS” – Technology Innovation for Local Scale Optimum Integration of Battery Energy Storage” Project

Project Description TILOS aims to demonstrate the optimal integration of local scale energy storage in a fully-operated, smart microgrid on the island of Tilos, located at the SE Aegean Sea, Greece. The island of Tilos is currently supplied with oil-based generated electricity via an undersea cable from the island of Kos. This allows for the investigation of the interplay between an interconnector and energy storage, and of energy trade strategies between a smart microgrid (Tilos island) and a macrogrid (the electricity system of Kos). In this context, the

main objective of TILOS is the development and operation of a prototype battery storage system, based on NaNiCl2 batteries, that will be provided with a smart grid control system and that will cope with the challenge of supporting multiple tasks.

The battery system will support both grid-forming (stand-alone microgrid) and grid-following (microgrid coupled with the main grid) operation and will also prove its interoperability with the rest of microgrid components, including centralized RES and demand side management (DSM). A complete SCADA system will enable the efficient monitoring and control of the smart microgrid. The SCADA control room recently landed on Tilos together with two brand new SINEAX load

meters for the two feeders of the island. FIAMM has been assigned with the development of the prototype battery storage system. The main accomplishments of the project so far regarding the storage system are:

• Finalization and detailed description of the FIAMM battery specification for TILOS.

• Full-testing of the NaNiCl2 battery pack and multi-pack mapping the FIAMM battery performance.

• The development of state of energy and state of health algorithms. • Development of a global battery model (battery, inverter and

transformer) to be used in the energy management system (EMS). • Development of an optimization multipack battery management model. • Identification and selection of a new, advanced grid-forming inverter manufacturer in order

to create the battery system prototype. • Completion of an internal study for the state of the art of forecasting tools and methods. • Development of preliminary forecasting algorithms for wind speed, load demand and solar

radiation, using more than one models and methodologies so as to produce an optimum forecasting tool.

The major Greek DSO, HEDNO participates in this innovative project along with universities such TEIP (project leader) and UEA, national (EUNICE) and international companies (Younicos, EUROSOL, FIAMM etc.) and NGOs like WWF under the E.U. funding. The main objective for HEDNO is to address DSM issues through public engagement, and to develop novel business models and policy instruments by means of the market diffusion of the developed battery storage system and of the integrated energy solution implemented on the island of Tilos.

20

7. Enedis NICEGRID Project The project - Description of the storage cases

Four different location have been chosen to test twenty-four storage system units of different sizes 1. Storage connected at the Primary Substation

1 battery Li-Ion of 1 MW (560 kWh) connected at the Broc-Carros Primary Substation (HV/MV) level. The system is placed at the TSO interface. This Primary Substation supply the Carros area and represents a consumption of 20 MW on the peak periods. Uses Cases tested:

• Active power reduction at the Primary Substation • Primary Substation load curve optimization

2. Storage system at the Secondary Substation 1 Li-Ion storage system of 250 kW (600 kWh) connected near to Dock Trachel Secondary Substation (MV/LV). This system is located in a district with a very important level of PV installations. Uses Cases tested:

• Load reduction • PV management • Load Curve optimization • Islanding

3. Storage connected on the LV network 2 Li-Ion storage systems of 33 kW (106 kWh) installed near of the secondary substation of Cailletiers and on the districts of Emigra and Soite. The systems are placed at 400 m of the secondary substations of its solar districts respectively. Uses cases tested:

• Load reduction. • PV management. • Load Curve optimization.

4. Residential storage 20 Li-Ion storage systems of 4kW (4 kWh) connected downstream of the meter of the residential PV generators. Uses cases tested:

• Peak load reduction. • PV management.

Peak/off peak hour optimization.

Main results • 90% availability of network batteries after the lapping phase • 80% availability of residential batteries. 138 solicitations during 26 days were carried out • Up to 2 full charge / discharge cycles per day • Services successfully technically tested • Storage systems performances depend on the services they provide. Without the objective of

comparing them… o Global energy performance of 74 % for the Primary Substation storage o Global energy performance of 81 % for the Low Voltage network storage o Global energy performance of 75 % for the Secondary Substations storage units. o Global energy performance of 67 % for the residential storage units.

• It is essential to properly size the storage system to match the services it will have to provide. • Need to further improve the reliability of batteries and communication systems in order to

answer to network constraints.

21

8. Enedis VENTEEA Project The project – Description of the storage cases

Venteea has tested, as a world first, a multi-actors/multi-services approach for the storage system. It consists in exploiting a maximum of the flexibility offered by the storage system combining, when is possible in a sequential or synchronous way, different services following an economical optimization of the program made the day ahead and updated the hour ahead.

Storage system is connected near to the Primary Substation where 18 MW of wind power is already connected:

• Nouret generation site with 12 MW connected in a dedicated feeder.

• Noyer generation site with 6 MW connected in an existing feeder with other consumers. The delivery stations of these sites are neighbours. The Li-Ion storage system of 2MW (1.3MWh) could be used on one or the other of the two feeders depending if the services to be tested.

Use cases

Main Results • 94% availability during the 304 experimentation days. • Up to 4 full charge / discharge cycles per day. • Global energy performance of 85% for some services. • Frequency regulation supply tests carried out by RTE (French TSO). • 12 services successfully tested. • Positive environmental assessment. • The storage system can provide the services tested to the DSO, TSO and the producer. • Validation of the technical feasibility of a multi-service approach with optimal planning in

advance. • First step required to find the break-even point of an electrochemical storage connected in MV.

22

9. e-distribuzione Project Description

e-Distribuzione has installed in the framework of the GRID4EU project a Li-Ion battery storage system, with the main goal of studying a new solution for voltage regulation (at MV level) and increase of the MV network hosting capacity of distributed renewable energy sources (DRES). The Electric Energy Storage System (EESS) is connected to a MV substation called “Smistamento” and it has the following features:

• Apparent power: 1 MVA; • Energy capacity: 1 MWh; • System efficiency: 86%;

It is composed of five independent battery subsystems (nominal energy capacity 213 kWh), themselves composed of a sub-set of Li-Ion batteries managed by a Battery Management System (BMS) and a power conversion system (DC-AC). The EESS is composed by two shelters, one housing the Li-Ion batteries and the other one housing the “power interface” between the MV grid and the batteries (i.e. inverters, transformer, etc.). The EESS is connected to the MV network with a remote-controlled circuit breaker. It also has a LV connection for the auxiliary services and UPS. The Energy Storage System is remotely controlled by the DSO’s network control centre. There are two control loops: the “external” control loop assigns reference set points while the “internal” control loop takes control actions to track the reference set values.

Thanks to the bus-bars system of the “Smistamento” MV substation there is the possibility to switch the storage over five different feeders depending on the results of an optimisation procedure, able to determine the optimal storage set point and connection, according to the specific network operating conditions. The control algorithm, which runs on the Substation Control System (installed in

HV/MV substation), provides two different kinds of outputs at the same time:

• Active and Reactive Power set points with the current EESS connection; • Active and Reactive Power set points + suggestions on the optimal EESS connection to

the network (this information is made available for the control centre operator).

23

Performance Evaluation / Use cases A variety of applications provided by Electric Energy Storage Systems can be identified along the electricity value chain, from generation support over transmission and distribution support to end-consumer uses. The following figure summarizes the variety of applications by size (in MW – X-axis) and operational timescale (seconds to months – Y-axis). The applications tested with the EESS installed in this project represent a subset of the ones listed in the “Distribution” system column:

• Voltage control • Capacity Grid Support • Losses Management

Moreover, it has also been positively tested the controlled islanding operation of a portion of the MV network. After disconnecting the MV network portion from the main network, the “black start” of that portion has been achieved using the EESS and then the islanding operation has been maintained for half an hour, thanks to the energy stored in the EESS (initial charge about 80% of the total capacity), before performing the “black start”. During the islanding operation, the EESS has maintained frequency and voltage inside the limits defined by standard EN 50160 (fn = 50 Hz and vn = 15 kV), acting on active and reactive power.

Towards Viable Business Models – Way forward Nowadays proving the cost effectiveness of EESS solutions is still an ongoing process. However, it seems generally accepted that EESS solutions have to imply more than a single grid service in order to be considered cost effective. This is reasonable because each of the services may require only a fraction of the operational capability and availability of the energy storage system. It is well known that the identification of a simulation tool developed for supporting decision making is the most important result hoped.

24

EDSO for Smart Grids is a European association gathering leading electricity distribution system operators (DSOs), cooperating to bring smart grids from vision to reality.

www.edsoforsmartgrids.eu