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What Can 1,000 MW of
Battery as Distributed Storage
do for UK?
PROPOSAL
Price Evolution has now made new build
Distributed Electricity Storage
economically feasible in UK
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Executive Summary
UK electricity fundamentals are:
• Demand keeps growing
• Low cost generating capacity is shrinking
• The N. Sea gas bubble has gone and UK must
now compete with World for access to
international gas supplies...
• ...where other fundamentals will keep gas prices
high
• …and daily peak demand will have to be met
with high cost CCGTs
1000 MW of Batteries can supply part of this peak
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Recent Price History - SBP
AVERAGE SYSTEM BUYING PRICE
November 2004 thro December 2005 - £/MWh
Peak supplied by CCGTs
300
250
Nuclear & coal offpeak
200
150
100
50
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004
January, 2005
May, 2005
September, 2005
October, 2004
February, 2005
June, 2005
October, 2005
November, 2004
March, 2005
July, 2005
November, 2005
December, 2004
April, 2005
August, 2005
December, 2005 (1st 13 days)
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Recent Price History - SSP
AVERAGE SYSTEM SELLING PRICE
September 2004 thro December 2005 - £/MWh
160
These differentials could not
justify new storage
investments – hence previous
failure of Regenesys
140
120
100
80
60
40
20
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004
January, 2005
May, 2005
September, 2005
October, 2004
February, 2005
June, 2005
October, 2005
November, 2004
March, 2005
July, 2005
November, 2005
December, 2004
April, 2005
August, 2005
December, 2005 (1st 13 days)
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Differences between selling & buying price
Average Difference SBP vs SSP
November 2004 thro December 2005 - £/MWh
100
90
Sell
Sell
80
70
Buy
60
Buy
50
40
30
20
10
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Trading Period
September, 2004
January, 2005
May, 2005
September, 2005
October, 2004
February, 2005
June, 2005
October, 2005
November, 2004
March, 2005
July, 2005
November, 2005
December, 2004
April, 2005
August, 2005
December, 2005 (1st 13 days)
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Are we seeing the future?
• Gas is now a global commodity
• Gas and oil reserves are concentrated in
Russia and OPEC countries
• Gas prices are likely to converge with oil
prices and any way...
• ...OPEC will cartelize OPEC’s gas
production...
• Covertly supported by Russia and Norway
Expect gas prices over $10/mmBtu for indefinite future
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What other Options?
• More nuclear capacity
– Unavailable for 10 – 15 years
• Clean coal (with CCS)
– Unavailable for 5 – 10 years
• Renewable energy?
– Only supplying firm capacity with storage
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Storage Options
• More Pumped Hydro ?
– Out of the question for environmental reasons
• Compressed air energy storage ?
– Salt domes are needed to increase gas storage
capacity
• Flow batteries
– Only VRB can be realistically rolled out in
immediate future
– VRB owns Vanadium and Regenesys processes
It looks like VRB
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VRB Demonstration Plants World-wide
Place
Application
Specification
Start date
Kashima Kita PS, Japan
Load levelling
200 kW x 4 h
1996
Office building, Osaka
Load levelling demo
100 kW x 8 h
2000
Sanyo factory
Voltage sag,
load levelling
3000 kW x 1.5 sec
1500 kW x 1 hour
2001
Wind power, Hokkaido
Stabilization wind turbine
output
170 kW x 6 h
2001
Dunlop Golf Course
PV hybrid, load levelling
30 kW x 8 h
2001
University, Japan
Load levelling
500 kW x 10 h
2001
Stellenbosch U, SA
Load levelling
250 kW x 2 h
2001
EPRI, Italy
Peak shaving
42 kW x 2 h
2002
Pacific Corp, Utah
End of line peak shaving
250 kW x 8 h
2004
King Island, Australia
Stabilization wind turbine
250 kW x 8 h
2004
Tomamae Wind farm,
Hokkaido
Stabilization wind turbine
4000 kW x 2 h
2005
Nine Years - no re-invention of wheel needed
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Large batteries are in daily use
VRB battery at 30.6
MW Tomamae wind
park, Hokkaido
4 MW, 6MW Pulse
6 MWh
Smoothing spiky windfarm output
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Multi-Applications & Benefits
Spinning and standby reserve
Power rating
100 MW
Frequency
control
10 MW
1 MW
100 kW
Power quality
10 kW
Black start
Load levelling/following
Un-interruptible
power supplies
Voltage
support
VAR support
Transmission
stability
Peak shaving
Load factor increase
Capacity deferral
Integration of renewables
Tariff trading
0
0
1s
10s
1 min
30 min
1h
2h
4h
8h
Storage inventory
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Storage is Necessary for
Development of Renewables
Experience in Denmark & Germany shows:
• That the threshold capacity of intermittent
renewables is very low before…
• …use of balancing capacity becomes
significant
• When balancing capacity is fossil, fuel and
CO2 savings are reduced
Nuclear and ”clean coal” cannot be cycled
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Storage is necessary for the
development of off-shore wind - 1
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
-50%
5 Minute Ramping as % Capacity
over 1080 hours
Behaviour of wind farm offshore DK
is certain offshore UK
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Storage is necessary for the
development of off-shore wind - 2
N um ber of "5 m inute" spiking incidents
at a 160 M W O ffshore W ind Farm
350
304
304
300
250
..in 8 months winter 2004 - 2005
200
150
100
66
48
50
16
7
7
4
5
2
2
0
0
>25 M W /5 m in
16% capacity
>50 M W /5 m in
31 % capacity
>75 M W /5m in >100M W /5 m in >125M W /5 m in >150 M W /5m in
47 % capacity 63 % capacity 78 % capacity 94 % capacity
C hange of O utput in 5 m inutes, M W
R am ping up
R am ping down
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Preliminary Calculation
(discounting other ancillary services)
1000 MW Storage Plant 365 days per year
Assumptions
Output - Capacity of Plant
Storage capacity of plant
Round trip Efficiency
MW
MWh
Calculation assumptions
MWh of buyable storage
MWh of saleable storage
Primary & Secondary Reserve Power
Reactive power
£ per MW per year
£ per MW per year
Price Assumptions
Average Peak Selling price
Average Offpeak Buying price
Selling price of battery, 8 hours storage
£/MWh
£/MWh
£/MW
Arbitrage income
Daily net income
Daily net cost
Specific O&M cost
Net daily income, excluding staff
£/day
MWh
£/MWh
£/day
Days of trading
Annual income (arbitrage)
Reserve power application
Other ancillary services (reactive power)
Total income
Upfront cost based on €2000/kW
Pay-off
per year, say
£/year
£/MW/year
£/MW/year
years
1,000
8
70%
There seems
to be a case!
8,000
5,600
200,000
10,000
60
30
1,400,000
96,000
8,000
1
88,000
80
30
1,400,000
100
30
1,400,000
120
30
1,400,000
208,000
8,000
1
200,000
320,000
8,000
1
312,000
432,000
8,000
1
424,000
350
350
350
350
33,600,000
72,800,000
112,000,000
151,200,000
200,000,000
200,000,000
200,000,000
200,000,000
10,000,000
10,000,000
10,000,000
10,000,000
243,600,000
282,800,000
322,000,000
361,200,000
1,400,000,000 1,400,000,000 1,400,000,000 1,400,000,000
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5.7
5.0
4.3
3.9
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1.
2.
3.
4.
Agree technical feasibility
Agree economic feasibility
Agree presentation documents
Presentations to, dialogue with
•
•
•
•
5.
6.
Next Steps
National Grid
OFGEM
DTI
Potential Investors
“Go” – “No go”!
If “go” – develop early cases on fully commercial
grounds
In modules of at least 5 MW or larger
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