HomeIndustry SectorsFuture EnergyWhy battery energy storage systems should not be overlooked

Why battery energy storage systems should not be overlooked

As business owners from all industries investigate installing renewable energy technologies to instil energy security, it is also essential to examine the uses and benefits of typical applications of battery energy storage systems.

The article appeared in ESI Africa Issue 2-2021.
Read the mobile-friendly digital magazine or subscribe to receive a free print copy.

Despite historic declines in economic activity in 2020, South Africa still saw a high intensity of loadshedding. The trend of increasing hours of loadshedding has continued into most of 2021. At Eskom, the problem of unreliable generation capacity gets exacerbated by operational issues, resulting in unplanned outages at multiple generation plants – primarily because of a lack of maintenance. Eskom’s ageing fleet of power stations and unplanned outages have hurt the power producer’s generation capacity for years, and these constraints remain a challenge for future growth.

Increasing loadshedding days since 2018 highlights the challenges that Eskom faces – a constrained power system with an old unreliable and poorly maintained generation fleet and the need for new generation capacity. Until undertaking investment in substantial new power capacity, the risk of loadshedding will remain.

Figure 1: Trend of increasing days of load shedding (Source: Absa RBB Sectors)

In addition to loadshedding, increasing tariffs by Eskom (15%) and municipalities (18%) have further improved the investment case for businesses into renewable energy generation and energy-efficient interventions. A growing number of business owners are also looking at the option of installing renewable energy technologies to power their daily operations to hedge against steep increases in electricity costs. Absa has also seen a growing trend of businesses looking at and investing in battery energy storage systems (BESS) to mitigate some of the effects of loadshedding. The decline in prices of batteries (in this case lithium-ion) and their benefits at times of loadshedding have made for a more robust business case.

Figure 2: Lithium-ion price outlook. (Source: Bloomberg New Energy Finance)

As a storage system, BESS is of interest because of its flexibility of use in many different applications independent of location – in contrast, for example, to pumped hydro storage.

The type of BESS application needs to be aligned with the right BESS technology to maximise value. Different BESS technologies are now available, such as lead-acid, lithium-ion (with many subtypes), sodium-sulphur and vanadium redox. The BESS technologies have their key strengths, weaknesses, and performance characteristics. The characteristics include depth of discharge, power output, weight, energy density, response time, safety, and thermal performance. The technology evaluation is usually done on a case-by-case basis to maximise value from the BESS.

The primary uses for BESS are grouped into two categories. Firstly, in stationary applications, such as backup power and peak demand shaving. Secondly, in mobile applications, such as portable machinery, electric vehicles and cell phones.

Some of the more typical applications of BESS for businesses and farmers are discussed below: increased photovoltaic (PV) self-consumption, peak shaving and arbitrage.

Increased PV self-consumption

The challenge with renewable energy, including solar PV panels, is that resource availability (e.g. the sun) does not always coincide with demand. This difficulty is especially problematic for residential or commercial customers, who are often not allowed to supply their excess PV energy back to the utility (generated when there is more solar supply than demand at their premises). BESS systems enable these customers to save this excess PV energy for later use (illustrated in Figure 3), increasing these customers’ consumption of their PV energy.

Figure 3: PV self-consumption. (Source: www.redelectrical.co.uk)

Peak shaving

As the demand for energy increases, so too does the cost of delivering this energy. The country’s demand is often so high that peaking generation power plants, such as gas turbines, need to be used to meet demand. Because of the costs of running these peaking generation units, electricity tariffs during these peak times are higher than during off-peak times.

As shown in Figure 4, shaving this peak, through businesses and households discharging their energy stored in batteries to supply their peak needs, can be beneficial to both the utility (which saves on expensive fuel) and the end customer (who saves on monthly electricity costs).

Figure 4: Peak shaving application for BESSs. (Source: EE Publishers)

Arbitrage

The value of energy, as with any commodity, is inherently linked to demand. The higher the demand, the higher the price of energy. This pattern can be capitalised by charging a BESS during low-demand periods at a low cost and selling the stored energy at a competitive price during high demand periods.

This is illustrated in Figure 5 – the maroon zone indicates low energy prices, and the red zone indicates high energy prices. The difference between the two gives the value that can be obtained.

Figure 5: Arbitrage cycle for BESS, demonstrating a value extraction opportunity.
(Reconstructed from: energystorageconsultants.com)

Solar PV and BESSs are likely to be the most viable options for your business’ future energy mix. Given the declining costs of the technology, increasing energy costs, our abundant sunlight availability and the long lifespan of the technology, the business case is increasingly attractive. Solar PV is, therefore, a key enabler – ensuring affordable, reliable and sustainable energy for all. ESI

Experience the renewable energy and battery energy storage journey

To find out more on how an agro-processor could mitigate the constraints with solar systems and battery energy storage, watch the video by Spif Chickens.

www.absa.africa

Guest Contributor
The views expressed in this article by the author are not necessarily those of the publishers and/or association partners. While every effort is made to ensure accuracy, the publisher and editors cannot be held responsible for any inaccurate information supplied and/or published.

LATEST FEATURES