Balance on the electricity market- there is a solution

Our main objective is to create the conditions for achieving 100% renewable. There are many hindrances to overcome along the way. One of them is the "green-coal paradox", which is as follows. We are building up the "green" generation in order to reduce CO2 emissions. However, due to the dependence of the renewable energy sources generation (hereinafter - RES) on the natural conditions, the electricity produced does not coincide in time with the consumption of the power system, so there is a need to apply balancing capacities. Balancing of the daily generation schedule is provided by thermal (hereinafter - TPP) and hydroelectric power plants (hereinafter - HPP). The capacity of HPPs is limited, and with the increase in the share of RES - the inequality of the daily balance of generation increases. Therefore, the required amount of regulatory capacity of TPPs is also increasing, and this displaces nuclear power plants that do not emit CO2 from the energy balance. Thus, there is a situation in which with the growth of RES, the amount of CO2 emissions increases, which is a paradox.

In order to balance the system it is necessary to use accumulating capacities or maneuverable generation. The example of maneuverable generation is gas reciprocating power plants. They are like an engine in a car - they can be put into operation and shut down as needed. However, there are a few "buts". Firstly, they run on gas, which is more expensive than coal and emits CO2. Secondly, when solar plants together with base generation (such that cannot be decreased) generate more energy than is consumed - maneuverable generation will not help. All that remains is to transfer the excess energy over time with the help of batteries. Is there such an opportunity in Ukraine?

Reported to SunTimes by Yevhen Didichenko- Chief Business Development Officer, KNESS Group

Introduction to balancing problems

Any electric energy system needs a constant balance between consumption and generation.There There are traditional generation facilities: nuclear, hydro and thermal power plants. The energy here is accumulated in the fuel (in the case of hydropower plants - in the potential energy of water), respectively, their management is aimed at generating at any given time as much energy as currently is being consumed. It is simple enough: the plants are large, there are few of them, a certain staff of system operators manages them in the "increase/decrease generation" mode according to the forecasted schedule of energy consumption. In case of changes in consumption, system operators regulate generation.
Everything is different with the Sun and wind generation. Energy production from these sources is forecasted, but it is possible to influence the amount of energy generated only by limiting the plant operation. So, the traditional ways of balancing do not work here. Accordingly, it remains either to limit the consumers, so that they adjust to the generation schedule, or to accumulate excess energy, which is not needed by the consumer at this time, to use it in the case of increased consumption or decreased generation.
But energy production and consumption balancing is needed in different time horizons: within an hour, a day, a week and a year.

Short-term balancing- frequency and capacity control

The regular response speed of a human system operator is 15 minutes: this is the time to make a decision, communicate, receive and execute a command. Therefore, it is important for processes that take less than 15 minutes to be automated. The fastest - primary and secondary frequency control, when the person does not interfere with the system. Automated control constantly maintains capacity and frequency in the system. Usually, separate hydropower plants are used for automatic frequency and output control, as they can increase or decrease the required capacity very quickly.
When the system operator sees that the reserves of automatic regulation are decreasing - they must be promptly updated. This is already tertiary regulation, it is currently occuring on the balancing market, but they are also more or less fast processes with a 15-minute step per hour.

An effective solution for all levels of automatic frequency and capacity control is a battery energy storage system implemented on LFP (LiFePO4) technology, which is able to accumulate or supply a significant amount of electricity in a short period of time. The alpha version of such a Ukrainian-made storage battery has already been developed and tested by the KNESS's research and development center.

The Battery Energy Storage System is developed by KNESS RnD Center - a set of series-connected battery cells. It contains its own intelligent charge balancing system and cells parameters monitoring.

The owner of the energy storage battery can participate in the ancillary services market under the automatic regulator and then it will be controlled by the automation of the transmission system operator, or they can enter the balancing market, apply for increasing/decreasing generation.

In addition, this storage system can be used not only for rapid response, but also for the transfer of small amounts of energy over the time.

Daily balancing

Nuclear power plants have the largest share in the Ukrainian generation balance (more than 15%), but their capacity may not be changed during the day. Thermal power plants are the same uncontrolled source. The amount of electricity they produce depends on the heat production schedule, as the electricity is a by-product for them.
Thus, there are only 2 sources of regulatory power left - TPP and HPP.
The hydroelectric power plant is the most maneuverable, because it can be put into operation and shut down during the day as much as needed: it quickly increases and decreases generation capacity. The capacities of hydroelectric power plants could be used freely and cover all the balancing needs, but, unfortunately, they are scarce. Therefore, we can use HPPs to regulate only consumption peaks when another generation is missing.
The situation is difficult with thermal power plants as well. Commissioning a thermal unit is a complex and resource demanding process. They cannot be put into operation and shut down daily. This is done only in emergency situations, but it significantly affects equipment runout and is economically impractical.
Common in Ukraine, the TPP with a capacity of 300 MW operates in the range from 170 MW to 250-300 MW (depending on its technical condition). It cannot work below 170 MW, this is its base.
Thus, the minimum level of daily consumption is covered by the base of atomic and thermal generation. The minimum composition of TPP units is determined by their maximum capacity during peak hours of the day, taking into account the capacity of HPPs. When we want to put into operation many nuclear power plants, the balancing problem is not always solved, because TPP units during peak hours cannot always fit with their minimum capacity in the energy balance during minimum consumption hours. Increasing the capacity of solar power plants further complicates the problem. With a significant increase in solar power capacity during the day, consumption for other power plants remains even lower than at night, so the inequality of the daily schedule increases, and the required balancing capacity also increases. More thermal units have to be put into operation and more nuclear ones have to be shut down.
Hydroaccumulation stations also operate in the power system. Their principle of operation is based on the fact that in the charging mode the water is pumped into the upper reservoir, and in the generation mode it is discharged into the lower one. They are used for daily balancing: in the mode of generation surplus, they work as a consumer, and in the mode of generation deficit, as generators. This is a convenient system, but requires a long construction period and large capital investments.
There is an urgent need for energy transfer technologies over time during the day. Batteries handle this perfectly. However, with batteries based on lithium cells, this is still not economically justified. In the current situation (market without market conditions), the minimum and maximum energy price is fixed, so when there is a deficit, there are no volunteers willing to close this deficit - because the price is limited. Conversely, when there is a surplus, and it seems possible to sell cheaper, but conditions do not allow. There is a paradox. When the market really works, with a significant difference in price during periods of surplus and generation deficit - it will be profitable for the owners of the storage capacities to provide their services.
A flow-through battery is ideal for daily balancing. It is an electrochemical converter that has a certain capacity. The numbers of hours it works is determined by the amount of electrolyte that flows through it. An electrolyte of one chemical form enters it, and another flows out. When this conversion occurs - it generates current, and vice versa, when the same electrolyte flows in a different direction - current is consumed. The capacity of such batteries is limited only by the size of the electrolyte tanks. This technology can compete with maneuverable generation. The flow-through battery developed at KNESS RnD Center has already passed the stage of laboratory tests - the technology works.
In the future, flow-through batteries can play the role of weekly regulator.

Annual balancing

In winter, energy consumption is higher than in summer. Although wind power plants generate more in winter than in summer, there are not many of them. The situation with solar power plants is the opposite. The problem arises: how to transfer energy during the year? Here it is necessary to move into the direction of hydrogen technology. Why? Because hydrogen itself as a chemical source is worthless, as it is obtained from water - the most common resource on the planet. The process of converting water into hydrogen and what hydrogen is stored in costs money, but the source of hydrogen itself is "free". Therefore, this is the main direction for seasonal accumulation, KNESS also works in this direction, and the market technology is not that far.
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The world is focused on market relations. Any services can be provided on the market, including electricity balancing. When talking about ancillary services, fast processes and automation are normally meant. There is a balancing market working within an hour, which is controlled by the transmission system operator's teams. In advance, the balancing service providers shall declare to the system operator the increase/decrease generation price at which they are ready to sell or buy balancing electricity. Therefore, the system operator selects such balancing market participants by rank when necessary.
During the day it is possible to sell or buy electricity in the intraday market, where the price a few hours in advance or on a day-ahead market may be adjusted. Moreover, on the market of bilateral agreements a cyclic purchase and sale may be formed for longer periods of time.
With the help of LFP batteries, ancillary and balancing services can be provided and electricity can be traded within the day. Or, for instance, a flow-through storage device can be created that could store energy for a week, alternating with a thermal power plant: a thermal power plant works for a week while the battery accumulates, and the next week the TPP is shut down and generation comes from the battery.

There are already some companies in Ukraine interested in using the Battery Energy Storage System. There is a desire to create and provide a balancing service, as soon as there is a legally justified opportunity.

The legislation does not yet define such a separate market participant as an energy storage system. Under the existing rules of the energy market, the energy storage system becomes unprofitable, because charging it is formally considered a consumer. And the final consumer must pay for the final distribution and electricity transmission, i.e. there is a double payment for the accumulated electricity by the energy storage battery, and then for the electricity consumed. But the payment of these tariffs at current prices on the balancing and ancillary services market neutralizes the economic effect of the battery.
By logic, storage devices are not consumers, they are a buffer that accumulates to give away. This must be officially regulated. That share of the electricity that went in and out should not be paid for. Only losses of electricity in the battery have to be paid for as consumed. The concept that only the final consumer pays for distribution and transmission should remain.
But the scope of batteries is not limited to balancing the market. They can be used as a primary regulator in a microgrid - a grid that operates separately from the general grid. And also as an uninterruptible power supply source in case of emergency disconnection of the consumer from the electric grid.
Nowadays , KNESS Group is very optimistic about the future development of renewable energy and is actively involved in the development of legislative and regulatory solutions to create opportunities for effective implementation of energy storage systems in the electricity market of Ukraine.