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The essence of energy storage

S4 Energy is a world leader in energy storage. Dominique Becker Hoff, project director, explains how energy storage will play a key role in energy transition in the coming years.

Dominique Becker Hoff

Is energy storage essential?

‘Yes. At the moment, there is a shift in balance from traditional sources to renewables and the decentralization of energy generation. However, in terms of logistics, the electricity grid has been designed for ‘just-in-time’ delivery. At the same time, energy consumption is intensifying. This creates the risk of an imbalance in the transmission network.

‘Traditionally, the required energy is generated centrally by fossil-fuel power plants in a demand-driven production process. However, new sources of sustainable energy, such as the sun and wind, cannot be controlled. This naturally leads to a mismatch between the demand from the market and the timing of the supply. As a result, we will inevitably have to start working with buffers in the future.

‘Of all the market parties, it will be the grid operators who will have to face the biggest challenges. Grid operators have the mission to maintain the quality of the transport and distribution, despite all the changes that the transition entails.’

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Centralized or decentralized storage?

‘Both. The sun peaks in the summer and the wind blows in the winter. Yet there are always discrepancies between supply and demand. We’re not just talking about temporary shortages or surpluses, but about differences that can continue for weeks at a time. Large-scale centralized storage solves this problem.

‘In addition to centralized storage, the grid benefits from decentralized power buffers for short-term energy exchange, for example to maintain the grid frequency. Together, components operating synchronously in the grid, such as the major power plants, produce 50 Hz. However, if there are fluctuations in supply and demand, then the frequency will fluctuate accordingly. Frequency is therefore the main indicator used to check whether supply and demand are in balance with one another. If a power plant breaks down in Spain, this would cause a drop in the grid frequency in the Netherlands.

‘We can assume that these fluctuations will increase the more solar energy and wind energy we use. This problem can be resolved with decentralized buffers, so that you can quickly inject or absorb power to prevent congestion.’

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Is hyperlocal storage feasible? Could every home have its own battery?

‘In theory, this could be feasible, but is not yet possible with the current price dynamics. ‘People who currently use solar panels and who therefore feed back into the grid, do this on the basis of a fixed kWh rate. You supply energy at the same price for which you purchase it since this has been determined by the government. As a consequence, consumers use the grid as they would a battery. This means that there is no essential incentive for storing energy in the home.

‘It would be different with a dynamic pricing strategy, based on supply and demand. When the sun shines, you would feed back electricity, but receive less money per kWh. As soon as the sun disappears, you would pay a higher rate and would wish you had stored the energy instead of selling it. This makes it attractive to invest in a battery.

‘Although home energy storage is conceivable, the incentive must come from a more dynamic energy market.’

windmill

What is the advantage of energy storage for the market?

‘If you make smart use of buffers, you can use large parts of the existing infrastructures. This is good news for grid operators. It is considerably cheaper to install buffers in strategic locations than to replace miles and miles of cable routes.

‘The advantage of energy storage for customers is that customers can produce under economically favourable conditions: affordable and with a quick payback period. This sometimes calls for quite a bit of creativity. A good part of my work therefore consists of developing unique technical combinations and sometimes devising additional revenue models, such as finding new uses for an existing application.’

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