A new energy storage business cases for the electricity ancillary services market

NEC Italia SpA, the smart energy competence center for the EMEA market and Ricerca Sistema Energetico SpA (RSE), a company with a solid national and international track record of electro-energy research, tomorrow released details of a new study into the new ancillary service business models that will be enabled by the Non-Predictable Renewable Energy Sources (NPRES), coupled with Energy Storage Systems (ESS).

With recent policy changes across Europe to reduce feed-in tariffs, there is an urgent need to make more efficient use of NPRES in the electricity market by storing and monetising excess energy. Moreover, as more intermittent solar and wind power sources are integrated into transmission and distribution networks, energy storage and dispatching services will be required to ensure the reliability and safety of the electrical system in light of the increased volatility in loads and generation.

Using the algorithms that RSE has developed to efficiently manage renewable energy parks and energy storage systems, NEC has defined the business case for a new type of ancillary services provider. NEC is highlighting how renewable power plants will be able to provide a variety of ancillary services – such as primary frequency regulation, negative balancing power, local congestion relief and local voltage regulation – to the Distribution System and Transmission System Operators (TSO/DSO).

NEC and RSE published a paper entitled, “Enabling a distributed generation and energy storage system to provide ancillary services” at the AEIT (the Italian Federation of Electrical Engineering, Electronics, Automation, Computer Science and Telecommunications) annual conference in Trieste, Italy on 18-19 September 2014 outlining the new business cases.

The paper underlines that NPRES coupled the ESS will achieve positive business case only if they will operate simultaneously several applications with different priority scales assuming that energy coming from renewable power plants will continue to benefit from feed-in tariffs.

In the future, NEC predicts distributed demand response assets will provide ancillary services at a cost and quality competitive with traditional gas and coal generators, which today are the primary ancillary service providers. The dispatchingservices provided by distributed generation is a cornerstone of a smart grid, where the TSO/DSO is able to manage any type of traditional and renewable generator, ESS and variable loads, which in turn automatically react to the changes of critical parameters, such as frequency and voltage, in the grid. NEC and RSE’s business cases demonstrate how ancillary services relating to the safety and reliability of the power grid could provide additional revenue streams to renewable energy plants in future regulatory frameworks. With its subsidiary company NEC Energy Solutions Inc., NEC is the world’s leading supplier of lithium-ion grid energy storage systems.