Energy storage minimizes fluctuations due to inconsistent wind and radiation

Engineer José Wanderley Marangon Lima, a specialist in generation, transmission, distribution and commercialization of electrical energy, works mainly in research on restructuring the electrical sector, electrical energy market, transmission and distribution pricing, operation of electrical systems and composite reliability.

The specialist has a master's degree in electrical engineering from the Federal University of Itajubá and a doctorate in electrical engineering from the Federal University of Rio de Janeiro.

He was coordinator and researcher in more than 20 R&D projects at ANEEL and currently teaches several courses in these areas and is a consultant for government agencies and private companies. O Canal Solar spoke with the engineer to find out his perceptions about the electrical sector and the energy storage segment in Brazil.

How can storage systems participate in the Brazilian electricity sector?

With the entry of renewable plants, notably wind and solar plants, intermittency begins to represent a challenge for the operation of the system.

In this sense, storage can help to minimize these fluctuations arising from the inconstancy of the wind and solar irradiation. We can classify these as three large markets depending on the amount of energy stored and the discharge power.

• Large market (seasonal), where large amounts of energy are needed to be stored for a long period of time (weeks and months). Necessary to face the continuous reduction of our reservoirs and the large concentration of wind farms in the Northeast.
• Medium-sized market (weekly), to stabilize fluctuations between days and weeks, taking advantage of climate and calendar variations.
• Small or short-term market (daily), to stabilize hourly fluctuations derived from load curve fluctuations. 

For each type of application there is a more appropriate set of technologies. 

How have storage systems been used abroad?

Electrochemical batteries (for example, lead-acid or lithium), due to their ease of installation, modularization and mobility, have been the most used in consumer applications and in some substations in the distribution network. 

In the case of residential consumers, many companies have supplied lithium batteries in conjunction with solar panels to control demand from the grid or even offer services to the grid. 

For commercial and even industrial consumers, they have the function of flattening the power peak, minimizing the payment of demand charges. Applications in distribution networks and even transmission have been observed in California and Australia, but with government incentives. 

Are storage systems viable?

The cost of implementing storage devices is still high when compared to the revenue obtained, either through services provided to the networks, or even through price arbitration in the energy market. There is a huge research effort to reduce these costs. 

Even technologies associated with gravitational energy, which are already mature, such as pumped storage plants, require investment in civil works and suitable locations. In Brazil, in some cases where the difference between peak and off-peak tariffs is very high, lithium batteries are being used in commercial applications to replace diesel generators.

Where is this type of project most profitable?

One of the challenges of the moment is to evaluate the benefits brought by storage in the operation of the electrical grid, in the postponement of network investments, in the provision of ancillary services, etc.

By quantifying these benefits, it is possible to price them and then assess where these storage units are profitable. In many studies already carried out, as already mentioned, the cost of these units is high compared to the benefits they bring. 

However, with increasing penetration of renewables these benefits are beginning to be significant. For example, in England they are building a pumped storage plant (pumped hydro) of 450 MW to stabilize wind energy offshore

Is it possible to reconcile energy storage and the white tariff?

As the white tariff is basically aimed at residential consumers, electrochemical batteries are the most recommended. With the cost of these batteries in Brazil (1 kWh around R$3,5), the battery life  payback ends up being very long.

What is the market potential for national industries in the energy storage production sector?

Some manufacturers that are already in the battery market in Brazil are beginning to see opportunities, especially for lithium batteries, but everything will depend on government incentives and the intensification of the entry of renewable sources into the country. 

A great opportunity is isolated systems, especially in the Amazon region. On the other hand, REN 482/12, despite having given a great boost to photovoltaic generation, ends up inhibiting the entry of batteries. 

Can you comment on the main aspects of the most mature international markets in this segment?

With the decarbonization of the electricity sector, the entry of renewable energy has been notable in several countries that had thermal generation (mainly coal) as the main part of the energy matrix. This change in the generation profile has caused problems in operations in several countries. 

In many cases, thermal generation itself has been the stabilizing agent for intermittency. In Europe, natural gas is still very important both for effective generation and for playing the role of backup of renewable plants. 

Storage is becoming increasingly present as policy and regulatory instruments such as CO₂ emission reduction targets are being used, often without considering actual costs.

There is currently a lot of talk about the lack of specific regulation for the insertion of storage in Brazil. How is that?

The 11/20 subsidy is open, which deals precisely with storage. ANEEL has analyzed what is happening in some countries and asks agents to make suggestions. This survey has a set of questions that agents can answer and contribute to.

Is there a schedule or forecast for publishing a regulatory resolution for hybrid systems with batteries?

One of the applications of storage systems is related to their combination with renewable generation systems (hybrid generation-storage systems).

There is great potential in this area, as storage allows the generator to supply, in addition to energy, power in wind and solar systems. I believe that in the case of generators with batteries attached there would be no need for specific regulation as they would be “behind the meter” applications.

Is the absence of a normative resolution holding back the development of these technologies in Brazil?

Brazil has always had inertia and natural storage provided by hydroelectric reservoirs, in addition to a transmission system with the capacity to transfer energy between its regions. The NE wind farms themselves are using the SE virtual battery to maintain their energy.

However, the reservoirs are decreasing due to environmental restrictions and low hydrology in recent years, which encourages the appearance of monthly and seasonal storage.

In the field of low and medium powers, there is [normative resolution] 482 of 2012, which uses the electrical system as a virtual battery but which sooner or later will undergo changes that will boost electrochemical batteries. In short, I think that regulation is not yet the main barrier but it could become so.

What is regulation like in countries where storage has taken off (Asia, Europe, Australia, USA)? Which of these initiatives could be applied in our market?

I would say that it didn't take off because there is no specific regulation. In England there is even debate about whether to continue to characterize the storage unit as a generator. There are tax incentives in financing for renewables coupled with storage in the US and some specific directives like that from CAISO (California Independent System Operator) for utilities to install 450 MW (4 hours) storage in California to avoid what happened in the summer past. Australia and China have major plans to become hydrogen providers.