Friedrich Schulte at BASF Science Symposium 2015

RWE 4/21/2015 PAGE 1

Energy Storage – from a Utility Perspective

Mannheim, 09.03.2015Friedrich Schulte, RWE AG

150 yearsScience symposiumSmart energy for a sustainable future

RWE Research and Development PAGE 2

Agenda

Current situation and upcoming challenges in Germany

Energy storage options

Conclusion

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3


The German Federal Government assumes a decrease of power generation of 45 % until 2050

Source: EWI/Prognos/GWS Studie

Energy concept of the German Federal Government

2010 2020 20502030 2040

Nuclear energy Conventional generation

RES (~ 80% of generation)

Imports

Decrease of power consumption- 45%

17%

25%

58%

45%

10%

20%

25%


15,000

10,000

5,000

0

20,000

12.04. 13.04. 14.04. 15.04. 16.04. 17.04. 18.04. 19.04. 20.04. 21.04. 22.04.

Supply of very high load

Providing large amounts of power for longer time frame

Very high load gradients

German wind energy production at selected days in April 2011Wind generation in MW

Integration of fluctuating power generation requires flexibility


Energy storage is just one of four ways to increase the flexibility of the system

Applications for energy storageTechnical measures to increase flexibility

> For 10…20 a the required flexibility can be provided by other, more cost-effective technologies such as- flexible power generation, - demand side management - and grid expansion.

New storage capacity only required with a very high share of renewables

> Nevertheless, is there a sweet spot for energy storage in the meantime?

Flexible power generation1

Grid expansion

Energy storage4

Demand side management3

2


Agenda



Conclusion

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Decentral energy storageRegional energy storageCentral energy storage


Energy storage can be implemented in different ways –decentral applications are key driver for market growth

Intraday-arbitrage

Day ahead-arbitrage

Ancillary services

Peak production managementT&D deferral

Increase RES consumption on consumer level

Potential application

Flexibility for electricity sector

Grid-release

Others

Decentral Regional Central

Short/mid Limited short/mid in specific

local situations

No short to midterm

Potential additional application for already financed storage

Conclusion> In short and midterm ramp-

up of storage capacities will be driven by decentral energy storage systems(stationary batteries, heat storage, immersion heaters)

> Decentral energy storage devices are driven by local use of RES. If aggregated -additional flexibility and grid release services at very low marginal costs possible.

> Decentral storage potentially reduces the demand for regional and central storage

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Profitability:


> PV-power generation achieved grid parity

> Increase of local consumption by home batteries is feasible and will be economically attractive for inverstors in the near future

> Business Case depends on market distortion due to own consumption privilege and is subject to regulation

DescriptionEconomy of PV

Declining PV-costs and increasing end customer energy prices make battery storage interesting

Decentral energy storage

ConsumeFIT Wholesale market

time

Ener

gy c

ost/

-pric

es

End customerprice

Wholesaleprice

Cost of PV-power generation

Today


Batteries allow for an increase of the local consumptionLocal 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

Housholdpower consumption

PV powergeneration

Battery charging

Batterydischarging

hour of the day

kW

0%

20%

40%

60%

80%

100%

1 2 3 4 5 6 7 8 9 10

PV s

elfc

onsu

mpt

ion

PV System size [kWp]

15,00 kWh5,00 kWh0,00 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 participates in the decentral energy storage market with a broad product portfolio

> Since May 2013 RWE offers home storage solutions for private and small/ medium enterprise customers

> Lead-Acid and Li-Ion-Technologies are available

> Connected to the 230V AC grid

> Integrated into RWE SmartHome suite

DescriptionPortfolio RWE HomePowerStorage

Product

TypeCapacity(kWh)Lifetime(cycles)RetailPrice (EUR)

StorageBasic

Lead-Acid4,9 – 14,8

2500@50% DoD7.599to10.499

StorageEco

Li-Ion4,5 – 13,5

5000@80% DoD7.499to16.999

StorageCompact

Li-Ion4,6 – 60,0

5000@70% DoD12.999to76.699

StorageVario

Li-Ion4,6 – 10,1

8000@90% DoD14.399to25.499



Local grid storage not the best choice to cope with a high share of RES – grid extension is generally cheaperGrid 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

Low voltage grid

> Example: PV generation requires grid extension competing with installation of a 100kW/4h battery storage

> Grid extension costs around € 60k @ 600m branch length> Battery storage using a 100 kW/4h Lithium-Ion Battery will

still cost about € 90k even @ a price of 225 EUR/kWh> With 40 years grids have at least twice the operational life

time compared to storage

Regional energy storage


RWE is about to integrate a local energy storage in Wettringen for grid investment deferral reasons

Motivation

Parameters

Timeframe

Description

> Capacity 1000 kWh> Power 300 kW> Technology Li-Ion

> Clippling peak grid load caused by PV in a rural area

> Distribution grid investment deferral

> Specification: November 2014> Procurement: March 2015> Installation and test operation: Summer 2015> Start of commercial operation (planned): 2nd half of 2015

Regional energy storage


Only with a share of RES exceeding 50 % significant storage increase on system level will be required

ActivitiesIncreasing share of renewable generation

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

Power-2-Gas

> Keep future options open

> Pursue R&D projects

> Pursue R&D projects

Central energy storage


RWE engages in research activities for central energy storage

P2G Demo plant Ibbenbüren

ADELE-ING

Adiabatic compressed air storage

> ADELE has reached advanced development stage – Cost target of 1300 EUR/kW reached – on par with PHS– Charge 200 MW, discharge 260 MW,

capacity 1-2 GWh (4-8 h), round trip efficiency 70%> Plans for demo plant suspended due to lack of business case> Currently working on further improvement of system to facilitate

market entry. Explored options– Downscaling to 10-30 MW aiming at more applications– Hybrid-configuration (semi-adiabatic using natural gas)

> Use of Power-to-Gas-technology in intermittent operation mode in the context of renewable power generation

> Nominal electrolyze power 100 kW

Description

Central energy storage

Project


Agenda



Conclusion

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Conclusion on energy storage

> Storage is just one solution to keep the energy system balanced competing with other measures

> The regulatory frame is the main driver for short and midterm profitability of energy storage systems

> In short and midterm the market for decentral energy storage will grow dynamically due to the own consumption privilege

> Aggregation decentral energy storage can generate additional services for the energy system potentially reducing the need for central storage

> Further effort and success of R&D is necessary to reduce cost, increase life-time and optimize characteristics.