Flush with RE sources of power, EU recognizes the risk it brings to the grid without the appropriate balance of storage.
Europe’s electricity system is undergoing profound changes. The EU is planning a
decarbonisation path that will see the EU and other industrialised countries reduce their
emissions by up to 95% by 2050. To reach this ambition of a carbon-neutral power supply,
the electricity sector will see an increase of variable renewable energy sources (RES) like
wind and solar power in the energy generation portfolio.
As a consequence, the electricity system will not only continue to face varying electricity
demand throughout the day, but increasingly experience generation-driven fluctuations.
This will lead to challenges in ensuring the stability of electricity supply. Electricity storage is one of the flexible solutions to reduce temporary mismatches between supply and demand.
Conventional and pumped hydropower already support the integration of increasing
amounts of RES by providing the necessary flexibility and storage capacity to balance
fluctuations. However, peak production of intermittent renewable sources that feed into the medium and low voltage grid will require additional small-scale, grid-connected electricity storage solutions.
This ‘decentralised’ storage can support the development of distributed generation. It can also provide a range of applications and services to the distribution system operators (DSOs) facing challenges such as increasing peak loads and stricter power quality requirements.
It is therefore high time to outline the role of decentralised electricity storage in the
electricity grid, focusing on the impact of those technologies on the distribution grid and
their implications for the DSO business.
Decentralised storage systems could affect the management of the distribution grid in a number of functional areas, including energy management, system services and the internal business of the DSO:
Energy management refers to energy arbitrage by decoupling electricity generation
from its instantaneous consumption, as delivered by electricity storage facilities.
System services cover the support storage could offer to quality of service and
security of supply in the electric power system.
Finally, for some special and well defined applications which cannot be provided by
the market, storage devices could be installed as a grid asset to primarily support the
core operational tasks of the grid operator.
Situated within the low- and medium voltage grid or on the customer side of the network, the present small-scale storage technologies could provide a large spectrum of performances and capacities to support and optimise the operation of the distribution system. However today there are very few indications and rules as to how to integrate decentralised storage into the distribution grid. This creates uncertainty among DSOs and storage providers regarding the necessary agreements between actors as well as storage connection and access rights.
In this paper EURELECTRIC therefore addresses the industry needs related to storage by presenting its view on the necessary division of responsibilities for each of the three areas mentioned above. Decentralised storage is not a natural monopoly. As a general rule, it should therefore be owned and operated by market actors. Depending on the storage technology and on commercial and regulatory incentives, these actors would use their storage facilities for market-driven energy management purposes and to provide system services to the distribution grid.
However, for very specific applications which cannot be provided by the market and which are exclusively used to ensure system stability, thereby optimising DSOs’ internal business operations, storage could be seen as part of the grid operator’s assets. These applications should of course not interfere with market arrangements.
It is against this background of storage’s potential contribution to security of energy supply and CO2 emissions reductions that policymakers should assess the requirements for future decentralised storage, thereby clarifying roles and responsibilities of the actors involved.
Key issues for policymakers: what do we need for decentralised storage to take off?
1. Decentralised storage should be seen as a part of the development of a smarter
2. Decentralised storage could serve the business of market agents as well as of DSOs.
Therefore market models, roles and responsibilities of the actors involved need to be
3. Decentralised storage is not the silver bullet for a more efficient and stable grid, but
should be assessed and compared to other flexibility options such as demand-side
participation or back-up generation.
4. European research funding on storage should focus on key technologies that
encourage the integration of decentralised storage systems into the electricity grid.
5. A holistic approach considering all costs and benefits is needed in order to achieve the
EU’s energy targets and smoothly integrate distributed generation technologies into
the smart electricity system.
6. The system of grid tariffs should be reconsidered within the smart grid context.