1) how the MW procured for aFRR compare with the MWh traded on the wholesale market, to see what % of the capacity would sufficie/be required to saturate the aFRR market?
2) whether renewable suppliers would always be able to meet the contractual guarantees for aFRR, given the uncertainty over their output?
The iron-air batteries from Form Energy should be coming out of the plant being built in Virginia, next year. Their target was a capex of $20/kWh, and the reaction runs for 120 hours, meaning the capex is $1700/kW of power output. They'll struggle to find large markets, at first, but as solar gets cheaper and overbuilt, iron-air may sell well.
But the big deal is to change every hydro dam that isn't already built to have far more capacity than it has yearly water, to be able to save up water at least half the time. That's a lot of storage.
Offshore wind is already playing a role in power reserves, at least for downward regulation in Belgium and in Germany. I do not know if they participe already to upward regulation.
Seasonal thermal storage for heating or cooling can create large new markets for solar energy that can reduce the potential for price collapses, while continuing to offer grid services. Underground thermal energy storage can be very low cost.
I am a big fan of thermal storage and I am sure that it will have a place.
But, I do not think that thermal storage will really offer a much better price to solar. I think that it will limit the price collapse as you say but prices offered will be really low still for ther;a storage to make economic sense.
Its about selling increased volume, cannibalising other markets e.g. A/C which must increase. If 20% of solar output that would otherwise be wasted is sold for a quarter of the average price, this increases revenue by 6.2%. And the cost of fossil heating is often about a quarter of retail power prices, with electric heat pumps still able to improve on direct resistance heating. The economics of cooling (always done with heat pumps) are even better, both despite losses from storage over time.
As soon as enough VRE capacity (PV in particualr) gets put on incentive aligned contracts, both up and down regulation as well as volume will be priced at essentially 0 whenever residual load is negative.
Storage doesn't fundamentally charge this, but it does make the averaging duration longer.
This is true, indeed. Currently, at least in BE/NL/DE, we observe a large price increase for regulation when residual load is low/negative, which indicates that incentives are not really well aligned for VRE capacity to take a major part in regulation. Hopefully it will change.
And thanks partly to that, business cases for batteries are getting better by the way. If renewables start providing large parts of regulation, business cases for batteries will be impacted.
Thanks @Julien - have you already looked at:
1) how the MW procured for aFRR compare with the MWh traded on the wholesale market, to see what % of the capacity would sufficie/be required to saturate the aFRR market?
2) whether renewable suppliers would always be able to meet the contractual guarantees for aFRR, given the uncertainty over their output?
Would love to hear your thoughts!
Elian
The iron-air batteries from Form Energy should be coming out of the plant being built in Virginia, next year. Their target was a capex of $20/kWh, and the reaction runs for 120 hours, meaning the capex is $1700/kW of power output. They'll struggle to find large markets, at first, but as solar gets cheaper and overbuilt, iron-air may sell well.
But the big deal is to change every hydro dam that isn't already built to have far more capacity than it has yearly water, to be able to save up water at least half the time. That's a lot of storage.
It looks like offshore wind played business case #1 in July in France: https://www.linkedin.com/posts/galileo-barbieri-7387343_l%C3%A9olien-off-shore-participe-%C3%A0-la-flexibilit%C3%A9-activity-7230209375192166400-UdEg The comments to the LinkedIn post indicate that more explanations are needed…!
Offshore wind is already playing a role in power reserves, at least for downward regulation in Belgium and in Germany. I do not know if they participe already to upward regulation.
Seasonal thermal storage for heating or cooling can create large new markets for solar energy that can reduce the potential for price collapses, while continuing to offer grid services. Underground thermal energy storage can be very low cost.
I am a big fan of thermal storage and I am sure that it will have a place.
But, I do not think that thermal storage will really offer a much better price to solar. I think that it will limit the price collapse as you say but prices offered will be really low still for ther;a storage to make economic sense.
Its about selling increased volume, cannibalising other markets e.g. A/C which must increase. If 20% of solar output that would otherwise be wasted is sold for a quarter of the average price, this increases revenue by 6.2%. And the cost of fossil heating is often about a quarter of retail power prices, with electric heat pumps still able to improve on direct resistance heating. The economics of cooling (always done with heat pumps) are even better, both despite losses from storage over time.
Also, the solar or wind are available to provide valuable grid services more of the time.
As soon as enough VRE capacity (PV in particualr) gets put on incentive aligned contracts, both up and down regulation as well as volume will be priced at essentially 0 whenever residual load is negative.
Storage doesn't fundamentally charge this, but it does make the averaging duration longer.
This is true, indeed. Currently, at least in BE/NL/DE, we observe a large price increase for regulation when residual load is low/negative, which indicates that incentives are not really well aligned for VRE capacity to take a major part in regulation. Hopefully it will change.
And thanks partly to that, business cases for batteries are getting better by the way. If renewables start providing large parts of regulation, business cases for batteries will be impacted.