A growing share of intermittent renewable generation in the electricity system is increasing the need for flexibility. At the same time, decreasing battery prices are opening up new opportunities for energy storage. Battery energy storage can be used for multiple applications, such as storing excess generated energy from renewable generation for later consumption, wholesale market arbitrage or providing ancillary services to the grid operators. Nevertheless, the return of investment of battery storage is often perceived too low and uncertain. Selecting the right application, or even combining applications, optimising the control and size of the battery storage are important steps to reduce uncertainty and increase the return on investment.
This dissertation addresses how flexibility from battery energy storage can be used optimally in electricity markets and the power grid. The thesis provides an overview of the different applications battery storage can be used for and gives a quantitative estimation of the value battery storage can bring when delivering each of these applications. Results show that frequency containment reserve is one of the applications that has the highest value for a battery storage system. Arbitraging on short-term wholesale and imbalance markets shows a high theoretical potential. However, achieving this value requires a perfect hindsight knowledge of the market prices, so that the practically achievable value lies a lot lower. Finally, there can also be considerable value in battery storage installed behind the meter, providing direct services to the electricity consumer, such as self-consumption or peak shaving.
As battery storage systems have a limited energy content, they have to be operated in a different way than traditional power plants. When providing frequency containment reserves, a battery energy storage system needs to control its state of charge to ensure the battery is never empty nor full, as this would mean the symmetric frequency reserve capacity is not available any more. This thesis presents a detailed, holistic framework to optimise such a state of charge controller and determine the optimal size of a battery storage system used for frequency reserves, taking degradation and regulatory requirements into account. As a case study, the optimisation framework is applied to the German frequency containment reserve market, providing some relevant insights into the economics and sizing of a battery storage system in this market.
Consecutively, this thesis looks at combining multiple applications simultaneously with behind-the-meter battery storage installed with residential and industrial consumers. The thesis presents optimised control strategies which allow the use of battery storage for the combination of frequency reserves and self-consumption or peak shaving. Stochastic optimisation techniques are used with robust optimisation as a safe approximation to probabilistic constraints, while dynamic programming is adopted to combine the longer-term objective of peak shaving with the daily decision making in the frequency reserve market. Case study results using real data show that synergies exist when combining frequency reserves with self-consumption or peak shaving and the resulting controllers are able to increase value of a battery storage system significantly compared to using the battery storage system for one application only.
Finally, the thesis discusses the impact of distribution grid constraints on the aggregated flexibility from battery storage or other flexible assets connected to the low-voltage distribution grid. The thesis focusses on a new regulatory constraint which has been put in place in Belgium to prevent congestion of the distribution grid, limiting the amount of these assets participating in frequency reserves. A distributed optimisation algorithm is proposed to coordinate the low-voltage grid connected flexible assets, maximising the total frequency reserve capacity while respecting these distribution grid constraints.
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