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Battery storage and its use in the reserve market is increasing – why?

Wind farms are being built all over Finland, perhaps with the exception of the easternmost regions, and solar power is gaining popularity, both among private households and on an industrial scale. At the same time, Fingrid is building new connections and substations. Grid energy storage is increasing at an accelerating pace, especially in terms of capacity. These developments are somehow linked.

Energy production has become more difficult to predict. Traditional centralized production has sought to either drive the load as evenly as possible at all times or to match consumption to the extent possible. Certain renewable forms of energy production, such as solar and wind power, on the other hand, generate electricity for the grid regardless of consumption and user. They are heavily dependent on the weather. As a result, the grid frequency increasingly deviates from the target value. Or, to put it more plainly, consumption and production are not in balance. This is particularly true for consumption and production peaks.

Industrial-scale electric batteries have become one of the essential technologies for combating grid imbalances. In Finland, they have the opportunity to participate in the reserve market maintained by Fingrid, where they adjust their charging or discharging capacity on the basis of the grid frequency. Batteries can also be used in connection with the production of renewable energy, affecting decisions on when to supply the grid with more (or less) power than the power plant's current capacity. The most recent example of the significant growth of battery capacity in Finland is the French company Neoen’s project: the largest battery storage in the Nordic countries, currently under construction in Yllikkälä, Southeast Finland. The energy storage, Yllikkälä Power Reserve One, has a storage capacity of 30 MWh and a rated output of 30 MW. Its purpose is to enhance the stability of the electricity grid.

Development will not stop here, either. The advances in electricity storage go hand in hand with the development of renewable energy. Batteries are excellent tools for daily frequency control. In contrast, they do not normally have sufficient volume to compensate for large consumption peaks or production lows. Electricity storage and other capacity capable of frequency control are increasingly needed as we move towards cleaner energy production. Intelligent and resilient solutions are vital for the energy system of the future. At the same time, these solutions make for a lucrative business.

Studies have been made in which the total price tags of the various forms of electricity generation were calculated so that they included the costs related to the power management of the electricity grid, the necessary reserve power and the reinforcement of the grid. The system price calculated in this way is clearly higher than the normal price of solar and wind power in particular. This confirms the conclusion that the increasing popularity of renewable energy will inevitably lead to an increase in the need for balancing solutions.

Even after all these solutions, we cannot sigh with relief. The electricity system has moved in a greener direction, but there is still a long way to go. New solutions will likely emerge to maintain balance but, at the same time, we need to build increasingly efficient, intelligent and flexible solutions on the existing systems. In this development, digitalization is an enabling force.

These things are being frequently discussed in the workplace. We already have experience of an EMS solution that enables an electric battery to operate in the reserve market. We are, however, constantly thinking about how to develop our software solutions for the changing electricity market. We see new developments all the time. And when you develop the software, you develop yourself at the same time. Which is just as well. Embracing new things and finding more effective solutions are signs that the industry is evolving. And you have to evolve with it. The future cannot be predicted with certainty, but what is clear is that we will continue to invest in these solutions.

Psst, if you wish to find out what new features our latest version of SyncWare 13 includes with regard to battery storage, see here (link).


Blog author is Energy expert M.Sc. Tommi Siponen

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