RWE 11/30/2015 PAGE 1

German Perspective on Energy Storage

Febeg Energy Storage Seminar

Brussels, 27th November 2015

RWE Research and Development

Dipl. Ing. Christian Metzger

RWE Research and Development PAGE 2

Agenda

Energy Transition in Germany – Challenges and Solutions1

Energy Storage – Options and RWE’s Activities 2

Conclusion3

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Germany’s renewable energy target anticipates 80% of

fluctuating renewable energy generation in 2050

DescriptionRenewable share at Germany’s total electricity generation

> Additional renewable

generation will depend on

the fluctuating

technologies of

photovoltaic (PV) and wind

> Installed power of PV and

wind is expected to double

from 76 GW (2014) to

149 GW in 20501

> For comparison: Germany’s

total power demand is

approximately between 30

and 80 GW (also in future)

in %

80

58

43

28

17

2010 2014 2025

+11% in 4 years

2035 2050

Realised share

Target of German Government

1 According to the German Transmission grid development plan 2015, Scenario „B“

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10

20

0

24

26

28

32

6

14

16

2

30

8

12

18

22

4

28.03. 30.03. 31.03. 01.04. 02.04. 03.04. 04.04. 05.04. 06.04. 07.04. 10.04.

German wind energy production at selected days in March and April 2015

Wind generation in GW

Integration of fluctuating power generation requires a

high degree of flexibility in the energy system

Supply of very high load

Very high load gradients

Provide large amounts of

power for a long period

Potential application for short-term storage

Potential application for long-term storage

09.04.08.04.30.03.29.03.

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Energy storage is just one of four ways to increase the

flexibility of the system

Applications for energy storagePossible technical measures to increase flexibility

> “Energy transition needs no

Energy Storage”1 Several

recent studies agree, that in the

next 10 to 20 years the

flexibility required in the power

system can be provided by

other, more cost-effective

technologies like flexible

power generation, grid

expansion and demand side

management. New storage

capacity will be only required

when renewable energies reach

very high shares

> At the same time a market for

decentral home storage in

Germany (ca. 20.000

installations at the end of 2015) is

growing

> What is the way forward?

Flexible power generation

1

Grid expansion

Energy storage

4

Demand side management

3

2

1 Headline of German Newspaper “FAZ”, September 2014

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Agenda

Energy Transition in Germany – Challenges and Solutions1

Energy Storage – Options and RWE’s Activities 2

Decentral energy storage2.1

Regional energy storage2.2

Central energy storage2.3

Conclusion3

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Decentral energy storage is driving the market growth

Other

ancillary

services

Arbitrage

Frequency

regulation

T&D deferral

E-mobility

Markets and value pools

Flexibility

for

electricity

sector

Grid-

release

Others

Short/mid term profitability

Limited short/mid term profitability

No short/midterm profitability

Service can not be provided

Potential additional application for

already financed storage

Conclusion

> Ramp-up of storage

capacities will be driven by

decentral energy storage

systems

> This trend is driven by

individual profitability

based on increase self-

consumption

> If aggregated decentral

energy storage can offer

additional flexibility and

grid release services at

low marginal costs

> Decentral storage ramp-

up will potentially reduce

the demand for regional

and central storage

capacity

Increase self-

consumption

Potential storage locationsDecentral Regional Central

1

3

Mobile

2

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Home storage increases PV self-consumption and is

close to individual profitability

1

Local PV power generation

and consumption can be decoupled time-wise

For a typical1 B2C customer a battery will

increase the self consumption by about 20 %

1 Family household, 4.500kWh annual consumption, 5 kWh Battery, 5 kWp PV

2423222120191817161514131211109876543210

Houshold

power consumption

PV power

generation

Battery

charging

Battery

discharging

hour of the day

kW

0%

20%

40%

60%

80%

100%

1 2 3 4 5 6 7 8 9 10

PV

self

consum

ption

PV System size [kWp]

15,00 kWh

5,00 kWh

0,00 kWh

+20%

> The economics of batteries rely on the avoided power purchases

> Business case depends on regulation and avoided grid fees, taxes, …

> With decreasing battery prices home-storage will be profitable for the investor

RWE Group R&D

RWE participates in the decentral energy storage market with

a broad product portfolio – Tesla shacked up the marketTesla PowerwallPortfolio RWE HomePowerStorage

Product

Typ

Capacity

(kWh)

Life time

(cycle)

Storage

Eco

Li-Ion

4,5 – 13,5

5000 (20 years)

@80% DoD

Storage

Vario

Li-Ion

4,6 – 10,1

8000 (> 20 years)

@90% DoD

10 kWh

Backup power

Li-Ion

10,0

500

(< 8 years)

7 kWh

Li-Ion

7,0

n.A.

Storage

Flex

Li-Ion

3,9 – 7,8

10000

(> 20 years)

1

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Local grid storage is not the best flexibility option – grid

extension is generally more cost-effective

2

Grid type Description

Medium

voltage

grid

> Medium voltage grid extension cost per kW is even cheaper than in

low voltage

> Although distances are longer, the storage business cases

in the regarded scenarios do not close

> However, in specific situations energy storage is competitive (e.g.

Wettringen)

Low

voltage

grid

> Typical example: increasing PV generation requires more flexibility in

the system – low voltage grid extension (600 m branch length)

competes with the installation of a 100kW/4h battery storage

> Grid extension costs around € 60k, even with branch length as long as

600 m

> Battery storage using a 100 kW/4h Lithium-Ion Battery will still cost

about € 90k assuming a optimistic future specific price of 225 EUR/kWh

> With more than 40 years grids have at least twice the operational life

time compared to storage

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RWE installed a 1MWh-Lithium-Ion-Battery in the

distribution grid for peak shaving

Battery storage near Wettringen Motivation

> Close to Wettringen (100km north of Essen)

the 400V-grid was utilized above design load

due to strong PV feed-in

> Planned 110kV-grid extension will solve this

overload issue in several years

> Temporary grid congestion can be eliminated

cost-competitively with a battery due to it‘s

reusability

2

Technical parameters

> 250 kW/1000 kWh

> 400 V

> Lithium-Ion-Battery-Cells

> Complete system in 40” container

> Autonomous control based on local grid signal

> Minimal expected lifetime: 15 years

Battery racks

Inverter

and

transformer

Climatisation

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Only with a share of RES exceeding 50% significant

storage increase on system level will be required

ActivitiesIncreasing share of renewable generation

3

Today

20 to 25%

2020

35 to 40%

2030

50 to 60%

2050

75% to 100%

Relevance of new storage

New Pumped Hydro

Compressed Air

Long-term storage

(e.g. Power-2-Gas)

> Keep future

options open

> Pursue R&D

projects

> Pursue R&D

projects

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RWE participates in research activities for central energy

storage

P2G

Demo plant

in

Ibbenbüren

ADELE-ING

Adiabatic

compressed

air storage

> Use of Power-to-Gas-technology in intermittent

operation mode – operated exclusively with green

electricity from a wind farm

> Application of innovative PEM (Proton Exchange

Membrane)-Technology

> Standard operating point 150 kW (el. consumption)

> Production of approx. 30 m³N/h hydrogen at 14 bar(g) –Feed-in into the regional gas grid of RWE Deutschland AG

Description

3

> ADELE has reached advanced development stage

– Cost target of 1.300 EUR/kW reached – on par with

pumped hydro storage

– Charge 200 MW, discharge 260 MW, capacity 1-2

GWh (4-8 h), round trip efficiency 70%

> Plans for demonstration plant were suspended due to

insufficient profitability

> Currently working on further improvement of system

design to facilitate market entry. The explored options are

– Downscaling of system (10-30 MW) to access more

applications

– Hybrid-configuration (semi-adiabatic systems using

natural gas)

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Current R&D storage activities cover the complete energy

value chain

Generation Trading Retail Distribution Grid

Short-term

Storage

Long-term

storagePower-to-Gas Ibbenbüren

Neighborhood-Storage

Upgrading of industrial assets via battery storage

Peak-shaving

battery Wettringen

Primary reserve

battery plant

ADELE

Aggregated Decentral Storage

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Agenda

Energy Transition in Germany – Challenges and Solutions1

Energy Storage – Options and RWE’s Activities 2

Conclusion3

RWE Research and Development PAGE 16

Conclusions

The regulatory frame – not the macroeconomic benefit – decides

upon the future success of energy storage technologies

The increasing presence of decentral energy storage will reduce the

demand for regional and central energy storage

Energy storage is installed in Germany rather decentrally and can

serve all markets when aggregated