Periodic Reporting for period 1 - HESS (Hybrid Energy Storage System) Reporting period: 2015-02-01 to 2015-07-31 Summary of the context and overall objectives of the project Win Inertia´s HESS technology addresses the topic “Stimulating the innovation potential of SMEs for a low carbon energy system”. The HESS technology aims at developing and bringing to market affordable, cost-effective and resource-efficient solutions to decarbonise the energy system in a sustainable way, secure energy supply and complete the energy market.In order to push HESS technology innovation from a TRL 6 to a commercial stage a set of hypotheses related to HESS’s envisaged business model have been previously identified (clients and partners, revenue streams, value proposition, etc.). Thus, this proposal aims at validating these hypotheses by carrying out a feasibility study. Potential clients will be surveyed about applications for energy storage and barriers for its implementation. HESS solution value proposition will be presented in order to assess whether it can solve their needs and, therefore, whether it is commercially feasible. Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far Information gathering for hypothesis validation has been carried out through interviews with potential clients, end users and partners. Most of the interviews have been conducted face to face and the rest have been conducted via telephone and videoconference. A semi-structured interview approach was followed using a questionnaire as the basis of the study but elaborating on the comments brought up by the participant. This approach has enriched the results and allowed identifying new perspectives for the analysis and new opportunities for the technology.Four types of entities have been interviewed: TSOs, utilities, Engineering, Construction and Procurement companies (EPC) and research centres:•TSOs and utilities (3 participants): TSOs and utilities are potential end users of energy storage technologies. Main advantages for them include improvements in the reliability and quality of the supply and flexibility in power generation scheduling, including a bigger share of renewable energy•EPCs (6 participants): EPCs are responsible for the supply of energy storage solutions that best matched their client’s requirements. They usually work for utilities and TSOs and, as a consequence, they are aware of their needs. EPCs can also provide information about energy storage in industrial applications, microgrids and also as part of generation assets that need energy storage to comply with grid codes.•R&D centres (1 participant): with the exception of lead acid batteries, grid tied advanced electrochemical energy storage is a relatively recent development and its long term performance still needs to be assessed. R&D centres can offer a wider perspective both in terms of commercial solutions and technologies under development. R&D centres work along with grid operators, utilities, EPC and manufactures of electrochemical storage technologies and can provide a cross-perspective that it couldn’t be obtained otherwise.Primary focus of the research is assessing the needs for the European market. However, since EPCs consulted have worldwide operations, information provided from non-European energy storage projects has been gathered. TSOs have also provided relevant information from non-European markets by contrasting their approach with foreign counterparts. Main Results Thanks to the semi-structured nature of the interviews, information gathered exceeded the answers of the questionnaire. General qualitative perceptions from the stakeholders participating in the research and their impression on their experience and awareness about energy storage are summarised before:Limited experience in real deployment of the technology: although all participants in the industry are aware of energy storage advantages, in depth knowledge about implementation and exploitation strategies is rare. This is the main causes why some participants were not able to give their opinion on some of the topics surveyed.Turnkey systems are the standard: utilities, TSOs and EPCs agreed that the preferred option for acquiring energy storage systems are turnkey systems. With the exception of Lead Acid batteries, electrochemical energy storage integration is not well known. Battery design and dimensioning depends on the chemistry chosen and the expected use. Therefore, EPCs rely on turnkey systems provided by a third party (battery integrators). EPCs are now working closely with technology suppliers in the system requirements in order to prevent inadequate performance or early degradation of the system. Suppliers can differentiate not only by their technology but also by the technical assistance provided during the design phase.Cautious approach from TSOs and utilities: In general terms, utilities and TSOs (with notable exceptions though) have not gone beyond pilots ranging from the kWh range to a few MWh range. The degree of grid integration and battery use in each pilot varied between projects due to the precautions adopted to prevent disturbances in the grid and the need to preserve battery life due to the lack of experience in its operation.Reactive approach from EPCs: EPCs have adopted a reactive approach towards energy storage due to the lack of experience in their long term operation and the need to provide warranties on the systems deployed on behalf of the battery supplier. Warranties are a cause of concern due reported rapid degradation in cases of intensive use. One EPC reported having recently turned down an opportunity for the deployment of an energy storage system due to the uncertainties in terms of full life cycle cost and the reliability of the system.Legal framework is not adapted to energy storage capabilities: TSOs confirmed that energy storage could be very helpful in order to solve some of the problems they are facing to optimally stabilise the grid, but storing energy and releasing it shortly afterwards is considered a distortion in the energy markets which is not possible for TSOs. Third parties providing this kind of services could be interesting for TSOs but it was considered unlikely due to the lack of suitable market conditions that create profitable business models. In some countries, energy storage (among other demand side management alternatives) is restricted for grid stabilisation. Utilities had a mixed perspective, while some considered that a central European market for ancillary services was attractive enough, others said that with the current costs of energy storage and market conditions, other alternatives were more favourable. Cost reductions in energy storage will create attractive business cases in the mid-term. EPCs see few opportunities in Europe and consider that the United States offers better opportunities thanks to a favourable legal framework for fast acting accurate systems such as batteries.Energy storage applications not originally considered in this study: EPCs provided additional examples of applications for energy storage. Most of the cases were specific for microgrids such as the case of mines or antennas in isolated areas. Other applications were power firming and black-start services in coal fired power stations, power quality improvement in harbours and diesel back-up substitution for PV feed irrigation systems. Two of the EPCs considered that the technology could be applied as part of railway infrastructure for energy harvesting from the braking trains, investment deferral in substations or distributed generation Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far) Based on the feedback gathered from the interviewees, it can be concluded that Win Inertia’s HESS solution solves most of the problems reported by end users. Current technologies are limited for high power applications. Standard Li-ion solutions suffer from thermal degradation under frequent high charge/discharge rates. If the battery is oversized to minimise degradation, CAPEX significantly increases. High CAPEX was the main barrier for energy storage reported by the participants. HESS’s UC storage unit is especially suited for short frequent high power events while Li-ion can cope with high energy requirements. Participants informed that the most common frequency regulation events lasted less than 10 seconds. UCs stacks can be dimensioned to provide responses of up to a minute thus reducing the need of oversizing the electrochemical storage unit and decreasing the CAPEX between 10 and 40% depending on the application. The HESS system is suited for reducing the use of fossil fuel back-up generators to provide ramp-up capacity in renewable energy power plants or as back-up systems in microgrids. Diesel generators do not need to be switched on permanently because UCs can cover generation dips until a diesel generator starts and ramps its power output (around 30 seconds). Significant fuel costs savings and pollutant emission reductions are achievable. Premature degradation of Li-ion storage systems subject to frequent fast charge/discharge cycles was a barrier for participants. The HESS solution minimises cycling of the battery thanks to UCs dealing with high power short duration events and decreasing the battery charge/discharge rates that would induce thermal degradation. Cell replacement is reduced and maintenance intervals increase. HESS modular architecture simplifies maintenance as only defective modules need to be replaced. All this features reduce the OPEX up to 25% compared with conventional batteries and increases the system lifespan which can now exceed 10 years. The HESS solution solves another of the problems reported by end users which was the monetisation of energy storage systems. Electrochemical energy storage systems are suited for either energy intensive applications such as load balancing or arbitrage or power intensive applications such as frequency regulation or power smoothing. HESS solution can provide both types of services. Service stacking increases revenue generation which, combined with CAPEX and OPEX reductions, contributes to higher return on investment and shorter paybacks.Based on the previous analysis, it can be concluded that there is a clear fit between the problems expressed by the participants in the study and the features of the HESS solution. Therefore, the HESS solution is considered commercially feasible. Moreover, some of the EPCs admitted that the HESS solution exceeded the technical requirements of real projects where energy storage could be used. Furthermore, some EPCs expressed their willingness to consider the HESS for future projects. Despite the positive feedback on the HESS technology, it is considered necessary to carry out further testing in grid connected systems or microgrids. Grid Tied Energy Storage Energy storage systems in microgrids Energy storage systems for renewable energy integration Barriers for Energy Storage
