How energy storage works

Large-scale battery systems allow (renewable) energy to be stored and tapped again when needed. Aggregators bring market supply and demand together by trading on Dutch energy markets. This is particularly interesting for owners of larger grid connections (>630 kVA), due to economies of scale.

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How batteries make a financial return

A battery can benefit in several ways. To maximise the return from a battery investment, different revenue models are combined.

Energy trade

It is possible to trade energy from batteries on the wholesale market (also called spot market). A battery can store power when it is cheap, so you can deploy it when the price of power is high. A producer of energy must stick to the production it has forecast in advance. If a producer produces too much or too little energy, there can be penalties. With batteries, you can therefore secure a more favourable power supply contract.

Congestion market

The congestion market is a market managed by the grid operators. They offer compensation for deploying the battery to avoid overloading the power grid, and to enable as much transmission as possible over this grid. A battery system helps grid operators with grid congestion by providing flexibility in the power grid. When wind and sun cause a high supply of electricity and the grid cannot handle it, the battery system can store energy and feed it back when there is more demand. This reduces the load on the grid at peak times and ensures more efficient power distribution. Grid operators offer various forms of contract for battery operators.

Balancing market

In the Netherlands, TenneT is responsible for keeping the the energy grid. Companies that, at the request of TenneT, can purchase and generate power at the moment there is a surplus or shortage of of energy, receive compensation for this (balancing services). Batteries are ideally suited for keeping the grid stable, because they can release or absorb a lot of energy in a short time. The services provided by the batteries for TenneT are called Frequency Containment Reserve (FCR) and Frequency Restoration Reserve (FRR).

Capacity shortage of your grid connection

If your business cannot have the connection capacity required for your operations, a battery system can be a solution. Batteries offer the ability to handle peaks in your electricity demand and thus make more optimal use of the available limited grid capacity. This way, you can still expand your business, even if your grid operator cannot increase the capacity of your connection. Network operators pass on the height of your largest consumption peak to you (kW-max). If the battery can reduce this peak with power from the battery, this will make a considerably on your energy bill.

Decision moments to deploy battery storage

Possible agreements with Network Operators

1. The Capacity Control Contract (CSC):
with this contract, agreements will be made on a capacity limitation or active deployment for energy storage systems to allow them to be grid-neutral for a longer period of time.

2. The capacity limitation contract (CBC):
This contract involves a call for readjustment or switching off the next day. The grid operator makes these agreements with, for example, wind or solar farms to create extra space in the power grid during peak times.

3. The redispatch contract:
This contract allows the grid operator to make adjustments on the day. This contract is usually entered into temporarily to prevent network overload in a congestion area.

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Neem dan contact op met Amanda zhu via +31 (0)622 96 98 91 or e-mail amanda@profinrg.nl. We denken graag met u mee in slimme oplossingen. Volg ons ook op LinkedIn.