Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution...
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Transcript of Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution...
![Page 1: Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution has now made new build Distributed Electricity Storage.](https://reader031.fdocuments.net/reader031/viewer/2022020306/551aaef7550346e0158b6188/html5/thumbnails/1.jpg)
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incoteco
What Can 1,000 MW of Battery as Distributed Storage
do for UK?PROPOSAL
Price Evolution has now made new build Distributed Electricity Storage economically feasible in UK
![Page 2: Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution has now made new build Distributed Electricity Storage.](https://reader031.fdocuments.net/reader031/viewer/2022020306/551aaef7550346e0158b6188/html5/thumbnails/2.jpg)
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Executive SummaryUK electricity fundamentals are:• Demand keeps growing• Low cost generating capacity is shrinking• The N. Sea gas bubble has gone and UK must
now compete with World for access to international gas supplies...
• ...where other fundamentals will keep gas prices high
• …and daily peak demand will have to be met with high cost CCGTs
1000 MW of Batteries can supply part of this peak
![Page 3: Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution has now made new build Distributed Electricity Storage.](https://reader031.fdocuments.net/reader031/viewer/2022020306/551aaef7550346e0158b6188/html5/thumbnails/3.jpg)
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Recent Price History - SBPAVERAGE SYSTEM BUYING PRICE
November 2004 thro December 2005 - £/MWh
0
50
100
150
200
250
300
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004 October, 2004 November, 2004 December, 2004
January, 2005 February, 2005 March, 2005 April, 2005
May, 2005 June, 2005 July, 2005 August, 2005
September, 2005 October, 2005 November, 2005 December, 2005 (1st 13 days)
Nuclear & coal offpeak
Peak supplied by CCGTs
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Recent Price History - SSPAVERAGE SYSTEM SELLING PRICE
September 2004 thro December 2005 - £/MWh
0
20
40
60
80
100
120
140
160
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004 October, 2004 November, 2004 December, 2004
January, 2005 February, 2005 March, 2005 April, 2005
May, 2005 June, 2005 July, 2005 August, 2005
September, 2005 October, 2005 November, 2005 December, 2005 (1st 13 days)
These differentials could not justify new storage
investments – hence previous failure of Regenesys
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Differences between selling & buying price
Average Difference SBP vs SSP November 2004 thro December 2005 - £/MWh
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004 October, 2004 November, 2004 December, 2004
January, 2005 February, 2005 March, 2005 April, 2005
May, 2005 June, 2005 July, 2005 August, 2005
September, 2005 October, 2005 November, 2005 December, 2005 (1st 13 days)
Buy Buy
Sell Sell
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Are we seeing the future?
• Gas is now a global commodity• Gas and oil reserves are concentrated in
Russia and OPEC countries• Gas prices are likely to converge with oil
prices and any way...• ...OPEC will cartelize OPEC’s gas
production...• Covertly supported by Russia and Norway
Expect gas prices over $10/mmBtu for indefinite future
![Page 7: Incoteco 1 What Can 1,000 MW of Battery as Distributed Storage do for UK? PROPOSAL Price Evolution has now made new build Distributed Electricity Storage.](https://reader031.fdocuments.net/reader031/viewer/2022020306/551aaef7550346e0158b6188/html5/thumbnails/7.jpg)
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What other Options?
• More nuclear capacity– Unavailable for 10 – 15 years
• Clean coal (with CCS)– Unavailable for 5 – 10 years
• Renewable energy?– Only supplying firm capacity with storage
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Storage Options
• More Pumped Hydro ?– Out of the question for environmental reasons
• Compressed air energy storage ?– Salt domes are needed to increase gas storage
capacity
• Flow batteries– Only VRB can be realistically rolled out in
immediate future– VRB owns Vanadium and Regenesys processes
It looks like VRB
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VRB Demonstration Plants World-widePlace Application Specification Start dateKashima Kita PS, Japan Load levelling 200 kW x 4 h 1996
Office building, Osaka Load levelling demo 100 kW x 8 h 2000
Sanyo factory Voltage sag,
load levelling
3000 kW x 1.5 sec
1500 kW x 1 hour
2001
Wind power, Hokkaido Stabilization wind turbine output
170 kW x 6 h 2001
Dunlop Golf Course PV hybrid, load levelling 30 kW x 8 h 2001
University, Japan Load levelling 500 kW x 10 h 2001
Stellenbosch U, SA Load levelling 250 kW x 2 h 2001
EPRI, Italy Peak shaving 42 kW x 2 h 2002
Pacific Corp, Utah End of line peak shaving 250 kW x 8 h 2004
King Island, Australia Stabilization wind turbine 250 kW x 8 h 2004
Tomamae Wind farm, Hokkaido
Stabilization wind turbine 4000 kW x 2 h 2005
Nine Years - no re-invention of wheel needed
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Large batteries are in daily use
VRB battery at 30.6 MW Tomamae wind
park, Hokkaido
4 MW, 6MW Pulse6 MWh
Smoothing spiky windfarm output
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0
Pow
er
rati
ng
0 10s 1 h 2 h 8 h
10 kW
100 kW
1 MW
10 MW
100 MW
Storage inventory
1s 1 min 4 h30 min
Power quality
Un-interruptiblepower supplies
Frequencycontrol
Voltagesupport
VAR support
Peak shaving
Transmission stability
Spinning and standby reserve
Black startLoad levelling/following
Tariff trading
Load factor increase Capacity deferral Integration of renewables
Multi-Applications & Benefits
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Storage is Necessary for Development of Renewables
Experience in Denmark & Germany shows:
• That the threshold capacity of intermittent renewables is very low before…
• …use of balancing capacity becomes significant
• When balancing capacity is fossil, fuel and CO2 savings are reduced
Nuclear and ”clean coal” cannot be cycled
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Storage is necessary for the development of off-shore wind - 1
5 Minute Ramping as % Capacity over 1080 hours
-50%-40%
-30%-20%
-10%0%
10%20%
30%40%
50%60%
Behaviour of wind farm offshore DK is certain offshore UK
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Storage is necessary for the development of off-shore wind - 2
Number of "5 minute" spiking incidentsat a 160 MW Offshore Wind Farm
66
167 5 2
48
7 4 2 0
304 304
0
50
100
150
200
250
300
350
>25 MW/5 min >50 MW/5 min >75 MW/5min >100MW/5 min >125MW/5 min >150 MW/5min
Change of Output in 5 minutes, MW
Ramping up Ramping down
16% capacity 31 % capacity 47 % capacity 63 % capacity 78 % capacity 94 % capacity
..in 8 months winter 2004 - 2005
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incotecoPreliminary Calculation(discounting other ancillary services)
1000 MW Storage Plant 365 days per year
AssumptionsOutput - Capacity of Plant MW 1,000 Storage capacity of plant MWh 8Round trip Efficiency 70%
Calculation assumptionsMWh of buyable storage 8,000 MWh of saleable storage 5,600 Primary & Secondary Reserve Power £ per MW per year 200,000 Reactive power £ per MW per year 10,000
Price AssumptionsAverage Peak Selling price £/MWh 60 80 100 120Average Offpeak Buying price £/MWh 30 30 30 30Selling price of battery, 8 hours storage £/MW 1,400,000 1,400,000 1,400,000 1,400,000
Arbitrage incomeDaily net income £/day 96,000 208,000 320,000 432,000 Daily net cost MWh 8,000 8,000 8,000 8,000 Specific O&M cost £/MWh 1 1 1 1 Net daily income, excluding staff £/day 88,000 200,000 312,000 424,000
Days of trading per year, say 350 350 350 350Annual income (arbitrage) £/year 33,600,000 72,800,000 112,000,000 151,200,000 Reserve power application £/MW/year 200,000,000 200,000,000 200,000,000 200,000,000 Other ancillary services (reactive power) 10,000,000 10,000,000 10,000,000 10,000,000 Total income £/MW/year 243,600,000 282,800,000 322,000,000 361,200,000 Upfront cost based on €2000/kW 1,400,000,000 1,400,000,000 1,400,000,000 1,400,000,000
Pay-off years 5.7 5.0 4.3 3.9
There seems to be a case!
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incotecoNext Steps
1. Agree technical feasibility
2. Agree economic feasibility
3. Agree presentation documents
4. Presentations to, dialogue with• National Grid• OFGEM• DTI• Potential Investors
5. “Go” – “No go”!
6. If “go” – develop early cases on fully commercial grounds
In modules of at least 5 MW or larger