Grid operators from throughout Europe imagine vitality storage is an important flexibility useful resource that ought to be incentivised.
ENTSO-E, the affiliation of European transmission system operators (TSOs) weighed in with its views on the European Fee’s reform of electrical energy markets final week. ENTSO-E represents 39 member organisations from 35 nations.
The European Fee opened a public session interval on its Electrical energy Market Design reforms for the European Union (EU) on 23 January, as reported by Power-Storage.information on the time. The session interval closed on 13 February.
The transmission operator group printed its submission to the session a day later. It mentioned that whereas the EU ought to pursue vitality safety as a major goal of the reforms, it must also “speed up the transition to a resilient and reasonably priced carbon-neutral energy system”.
ENTSO-E final October launched its ‘imaginative and prescient’, referred to as ‘A Energy System for a Carbon Impartial Europe,’ that set out how that could possibly be achieved by way of carbon impartial vitality sources, mixed with sources for system flexibility, and an interconnected energy grid underpinning an built-in vitality market throughout the continent.
Power storage will doubtless play a task in every of these areas, however it’s within the flexibility sources half that the grid operators put most emphasis on the know-how in its response to the brand new session.
Because the share of variable renewable era from sources like photo voltaic PV and wind grows, so too does the necessity for balancing the system to extra intently match provide with demand. With this being accomplished largely through fuel right now, the EU itself recognises that vitality storage, in addition to demand response, can add a lot of that flexibility as an alternative.
How that flexibility ought to be added, nevertheless, is the massive query. Market constructs in Europe and in most different elements of the world are nonetheless primarily based on the previous paradigm of centralised thermal energy era and regulation and coverage has not but caught up with know-how.
Whereas ENSTO-E’s place on the session is broad and gives enter on varied completely different areas of the reforms, listed below are among the takeaways pertaining on to vitality storage:
Hybrid auctions
One technique of incentivising funding into vitality storage by way of market design could be to carry auctions for hybrid property i.e., variable renewable era paired with vitality storage, which might give photo voltaic and wind extra steady electrical energy provide profiles, ENTSO-E mentioned.
Market frameworks
Over the longer-term, the worth of flexibility sources could possibly be higher recognised with stronger locational and temporal pricing alerts. These would offer stronger incentives for dispatching and siting of versatile sources, and would align vitality system planning in every territory of Europe nearer to what it wants.
Different solutions included elimination of technical and regulatory obstacles for storage and different flexibility sources to take part in vitality and energy markets, together with vitality, congestion administration, ancillary companies and capability markets. That would come with permitting aggregated customer-sited behind-the-meter (BTM) sources to take part extra broadly.
There is also mounted value contracts for versatile era or flexibility companies that prime up the distinction from what an asset can earn within the spot wholesale market, akin to a contract for distinction (CFD).
Elsewhere, ENTSO-E additionally mentioned that grid operators’ investments in upgrading and modernising their grids are usually not correctly incentivised, leaving a spot between what they should do and what they’re allowed to do, or allowed to do and receives a commission for.
There may be “widespread and structural under-remuneration” of investments by TSOs into balancing and congestion administration prices. The precise funding necessities shall be “huge,” and the affiliation argued that TSOs in lots of instances are usually not capable of get better their prices for what are sometimes massive cross-border initiatives that profit shoppers in Europe past their very own service areas.
Trade view on reforms
In a latest article for our quarterly journal PV Tech Energy (Vol.33), progress and market growth director Julian Jansen and Lars Stephan, coverage, and market growth director at vitality storage firm Fluence supplied their tackle the Electrical energy Market Design reforms.
Lots of the pair’s arguments and proposals echo these carried by ENTSO-E. As an example, the article additionally highlighted that procurement of hybrid sources, maybe by way of tenders, could possibly be an choice, as might a CFD-like construction for giving builders and buyers long-term certainty on their returns or revenues.
Jansen and Stephan wrote additionally that Europe’s Capability Mechanism design ought to have a compulsory low-carbon element, with funds increased for much less polluting sources and changing into progressively extra so, and valuing decrease carbon depth with every operating of procurements.
There has already been some exercise on this space by way of European grid operators, most notably with Italian TSO Terna operating low-carbon Capability Market auctions on a pilot foundation.
Power-Storage.information’ writer Photo voltaic Media will host the eighth annual Power Storage Summit EU in London, 22-23 February 2023. This yr it’s transferring to a bigger venue, bringing collectively Europe’s main buyers, policymakers, builders, utilities, vitality consumers and repair suppliers multi functional place. Go to the official website for more information.
