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OPPORTUNITIES ON THE EMERALD ISLE
Although its grid is smaller than those of other EU markets, the island of Ireland has managed to set a course for its growing energy storage market, but there are challenges that have to be navigated.
Ireland has plenty of wind resources to tap, and onshore wind power has now become one of the island’s cheapest forms of electricity. Developers are also setting their sights on offshore wind capacity, which points to wind making up a greater and greater share of the power mix.
This will improve the island’s energy security, reducing reliance on fossil fuels and lowering carbon emissions, but it will mean that grids will need more flexibility and resilience because of the nature of non-synchronous penetration.
In September 2020, industry association Energy Storage Ireland (ESI) published the results of a survey of its members, revealing a 2GW pipeline of 54 projects at various stages of development.
Almost 700MW of the projects are at an advanced stage and looking to come online in the next 12 to 18 months.
The projects are part of a DS3 (Delivering a Secure Sustainable Electricity System) programme, which was ignited by a set of studies back in 2010 — the ‘All Island TSO Facilitation of Renewables’ studies, and aims to in-
crease the amount of renewables in Ireland’s grid.
The studies were carried out by EirGrid, the transmission system operator for the whole island of Ireland, working withits subsidiary SONI (System Operator for Northern Ireland).
By 2018, 14 services were included in DS3, all to maintain resilience in
Emerging need for longer duration batteries
Opportunities for longer duration batteries should emerge, thanks to falling battery costs and price trends in the power market.
“Opportunities for longer duration batteries, up to two hours, could emerge but the market isn’t quite there yet, it could be from 2024 onwards. We can already see the GB market moving to two-hour duration, but this requires many more modules compared with a battery with a half hour duration,” says Statkraft grid manager for Ireland Bernice Doyle.
“The system also needs the same import connection as export so that it can recharge more rapidly. In current systems, batteries can inject power rapidly into the grid for balancing services as they don’t need to discharge too much — these are shallow cycles,” she says.
Nigel Reams is the co-founder of energy storage developer Lumcloon Energy, which has the largest storage portfolio in the country, with 100MW in Lumcloon and another 100MW project in Shannonbridge.
“Longer term there is an opportunity for batteries to earn revenues from provision of system services and also arbitrage and energy balancing,” he says. “The combination of more renewables on the grid, impact on energy prices and falling battery and storage costs will unlock more opportunities for new batteries to come online from 2023-2024 onwards.”
“The future is longer duration energy storage, such as two or more hours rather than the 30 minutes shorter duration systems, which are optimised for the fast responding DS3 services,” says Samuel Harden, chair of ESI.
“Longer duration storage can be deployed to alleviate constraints and further reduce curtailment, as well as play a greater role in energy trading arbitrage and balancing the system, as well as providing frequency response.”
The DS3 market is well designed, so could allow batteries to execute a range of different services and revenue streams.
“It incentivizes services by valuing speed of response and incentivizes them when the grid requires them, such as times of high levels of renewable generation. Storage assets are then free to search for wholesale and arbitrage opportunities outside of these.”
Harden points to similar approaches by other grid operators that are helping to allow grid batteries to provide multiple benefits and value streams.
“In Italy, the TSO Terna, for example, only requires 1,000 hours of storage a year, which can free up batteries to earn revenues at other times,” he says.
Harden says ESI would ideally like Ireland’s market for energy storage to develop in a way that incentivizes where value can be added, as other markets have begun to do.
“For example, incentivizing storage to co-locate with new renewable capacity, which can deliver a number of benefits, the most obvious being reduced grid development costs.
“Storage and renewables are becoming more and more competitive and cheaper than other forms of generation. In some US states we’re starting to see solar tenders which pay more for projects with energy storage as a component, because it is still cheaper compared with building more standalone solar capacity and having to ramp up fossil fuel generation to cover the peak when solar generation drops off but demand kicks in.”
— Samuel Harden, chair of ESI
LOW PROFILE
FOR EACH CELL SIZE
the power system as more renewables came onto the grid. EirGrid said it expected batteries to offer reserve services, such as fast frequency response, primary and secondary operating reserve.
The system as a whole is viewed by many as one of the most sophisticated grid services markets in the world. But there are problems.
Obstacles
“The main issue is that we want clarity on what is going to happen after 2023. There is going to be an ongoing need for more flexibility in the system, and storage, but it is not clear in terms of how much and what framework will support it,” says ESI chair Samuel Harden.
“We are fairly confident that there will be something to replace the current DS3 arrangements, but we’re not sure what.”
While in the UK there is no limit to the number of grid connection offers that DNOs can make, in Ireland the enduring connection process (ECP) caps the number and type of offers.
“In the first ECP round (ECP-1), the volume of offers was capped at 1GW with about 400MW of this prioritized for storage, which was seen as a clear acknowledgement by the TSO that storage needed to be connected to the grid with some urgency. Most of the 692MW of the capacity in advanced stages came via ECP-1,” says Harden.
“The second round of grid connection awards, ECP-2, which closed recently, did not prioritize storage and in fact limited the number of offers for system services, which reflects the fact that there is currently sufficient storage being developed, albeit to meet demand through DS3 services.”
However, without any of the prioritization that happened in ECP-1, timelines for grid connection works can be lengthy for storage.
“What we are trying to do is work with various stakeholders, including EirGrid, to move beyond the mindset that storage is only good for providing fast response grid services,” says Harden.
“For example, we know that as grids see higher penetration of windgenerated electricity, especially Ireland’s grid, which is not as well interconnected as other grids on the EU mainland, then curtailment and congestion issues increase, which energy storage can alleviate.”
Harden says storage can provide multiple services and earn its keep in different ways in a renewables-heavy market, where more flexibility is required, and not simply be limited to providing fast response grid services.
“Two technologies — wind and storage, for example — cannot share a grid connection, so you have to have separate MWs for wind and separate MWs for battery storage, which could act as a barrier to hybrid projects from getting through the grid connection process. This has been one of our key issues to address in our workstreams with EirGrid,” Harden says.
He says that engagement with both EirGrid and the regulator has been good.
“There’s good dialogue and feedback from both. DS3 is one of the most advanced grid services systems in the world. Consultations are now focusing on 2023 to 2030.”
As more non-dispatchable renewable electricity comes on line, without energy storage and demand side response to provide the necessary flexibility in the system, it will be more expensive and carbon-intensive to rely on conventional generation to provide the reserve and system services, he says.
“We are presenting energy storage technology as the best value solution to provide the required flexibility through avoiding the costs that would otherwise be incurred through increased curtailment as more wind is added and the cost of running fossil fuel generation, as well as delivering savings in terms of carbon emissions.
“Energy storage is a clean resource. Savings are in relation to the cost of grid operation as energy storage is the most efficient mechanism for providing these.”
Chasing the wind
Gore Street Energy Storage Fund has a 160MW portfolio of battery projects in Ireland, valued at £77 million ($100 million), in the DS3 programme.
“We saw lots of players developing and acquiring wind projects, such as Statkraft, and saw that energy stor-
vices” — Samuel Harden, ESI chair
— Samuel Harden, ESI chair
age would follow this wind buildout, because the grid operator would need to contract for services to provide grid balancing and stability,” says Gore Street Energy Storage Fund chief executive Alex O’Cinneide.
“The capped market in mid-2019 definitely helped seed the market for storage in Ireland and attracted a lot of competition.”
The projects comprise two 50MW facilities in Northern Ireland, in Drumkee in County Tyrone and Mullavilly in Armagh, plus two 30MW plants in the Republic of Ireland, in Portersdown, County Kildare, and Kilmannock, County Wexford.
All the projects are expected to be operational by 2021, O’Cinneide says.
“In the uncapped market we’ll be moving assets from one service to another, making tactical decisions about how best to deploy those batteries.”
He says DS3 is a high-spec market for energy storage in terms of availability of assets and speed of response.
“In global terms EirGrid is imposing a very high bar to obtain a very highquality service.
“This places us in a good position as we expand into other markets, such as the US, because we own assets that are capable of meeting high-spec grid service products with our business models.”
a lot of competition” — Alex O’Cinneide, Gore Street Energy Storage Fund chief executive
Starter for Statkraft
A portion of the 21MW of energy storage online in Ireland is an 11MW battery owned by Norwegian energy company Statkraft.
The battery is installed on the same site as a 23MW onshore wind farm at Kilathmoy on the Limerick/Kerry border in the south-west Ireland.
Statkraft partnered Fluence to deliver the storage, with battery modules produced by LG Chem.
According to Statkraft grid manager for Ireland Bernice Doyle, the reserve services are suited to short-duration battery assets, typically with a 30-minute duration, which can also provide reactive power.
She says realistically there will be about 400MW of capacity for storage under the DS3 uncapped volume market, which could potentially increase to 500MW.
“It’s not going to be a massive market.”
She says Statkraft wants to be involved with batteries to deliver its renewables ambitions where it plans to build out 6GW of wind and solar by 2025 in markets that include GB, Ireland and others in Europe.
“In markets like Ireland, storage is going to be a key enabler to help reach renewable energy targets. If you don’t have enough storage you have to curtail. Storage is going to help us reach our target but also manage curtailment levels of the generation asset,” says Doyle.
“The Kilathmoy battery is going to provide us with knowledge of how to do some things in practice. Though it is a 30-minute battery, we’ll use it to figure out issues as we go along so that when it is time to build more battery capacity we’ll have gathered expertise.”
The battery went live in April 2020.
“What’s interesting for us ‘techno geeks’ is seeing how it is responding. Most are under frequency events, so very short and shallow responses. The longest we have seen is less than 10 seconds. The dynamic response is relative to the frequency event so it is going low but is not quite maxed out. In general the battery is sitting, ready and doing what it should be doing,” says Doyle.
Statkraft has a portfolio of sites around Ireland, which Doyle says will be built out when the time is right.
She thinks post 2023, when the DS3 programme ends, there will be an investment hiatus under the current market framework.
