The challenges within the Netherlands‘ grid-scale vitality storage market are quite a few and well-documented, together with a extremely congested grid, ‘double-charging’ of vitality storage as each shopper and producer and a relative lack of familiarity with vitality storage.
Deployment forward of returns
SemperPower’s industrial director Jacob Jan Stuyt explains to Power-Storage.information that the agency’s mannequin for monetising its mission not less than will get across the bankability challenges associated to the third level.
The agency develops and owns its tasks however rents out its capability beneath long-term agreements – 10-15 years – to totally different prospects. This enables SemperPower to offer fastened, contracted revenues when arranging financial institution financing, whereas in most markets a BESS’ service provider mannequin would preserve debt parts of a mission financing comparatively low.
That additionally may imply returns are decrease however, put merely, going the service provider route would decelerate the tempo of deployments that the Netherlands wants, Jan Stuyt says.
“From a returns perspective, it is perhaps simpler to go for the buying and selling mannequin, however your fairness must go up as a result of that utterly modifications the chance profile. We wish to create 1.4GW of BESS capability within the Netherlands and each different route we explored would put extra stress on that focus on being realised.”
The industrial mannequin sees SemperPower take accountability for making certain the tasks have the agreed uptime and availability whereas the client, which rents a portion of the mission for a payment, retains all of the upside (or draw back).
Giga Storage has opted for the same mannequin, which is akin to that seen in some US markets like California and Arizona, the place utilities contract for a portion or the whole lot of a BESS’ vitality beneath a long-term deal whereas the developer owns the mission. The most important tasks within the US are, normally, being inbuilt these states. In Texas and the UK, the mannequin is far more service provider (although mission sizes in Texas are by no means far behind).
SemperPower has a number of prospects for its three tasks – Castor, Pollux and Star, a 9.3MW/9.9MWh system commissioned in late 2021 – however utility Essent is the one publicly-revealed one.
On how its prospects use the BESS tasks, Jan Stuyt says: “They should match provide and demand daily or they go on the imbalance market. With extra wind and photo voltaic within the system, liquidity for flexibility is extra scarce and the predictability of shoppers is more durable due to house photo voltaic, EVs and many others, in order that they want a hedge to cowl the elevated price of doing enterprise. The BESS is a moveable, steerable asset that lets them hedge their imbalance out there.”
“Our different kind of buyer is extra of a dealer, they usually use the asset to work on the imbalance, they go to the markets that want probably the most liquidity.”
Grid and improvement challenges
Jan Stuyt says lengthy grid wait occasions usually are not a big problem for the corporate – its pipeline of BESS tasks have grid connection dates of 2025-28. All are at the moment deliberate as 2-hour batteries though the potential for 4-hour programs is being explored too.
DSOs just lately moved from a first-come-first-served mannequin on grid functions to 1 the place there are extra funds upfront. An inflow of tasks within the final two years noticed a backlog of 45GW of BESS tasks within the queue.
Discovering an appropriate plot of land is a problem, nevertheless, with the Netherlands being a really densely populated nation. Castor and Pollux are on the identical plot of land (though don’t share any electrical infrastructure or grid connection).
Some 60% of SemperPower’s 1.4GW pipeline is greenfield – that means it has accomplished all the event work – whereas the rest is tasks being developed by one other firm that it has agreements with.
On growing within the Netherlands, Jan Stuyt says: “None of it’s straightforward. If one half is straightforward, then you recognize the opposite half might be onerous. For municipalities it’s a brand new world and other people have totally different reactions to the subject.”
DSOs and BESS’ obtainable markets
Power storage can also be comparatively new for the Netherlands’ distribution system operators (DSOs) and there’s a selection within the approaches they’re taking. There’s nonetheless a worry of what batteries may do on the grid, Jan Stuyt says, just like the theoretical chance they discharge onto the grid when photo voltaic PV is at max output.
However, he factors out – as many do – BESS would haven’t any incentive to discharge when that occurs and costs are low or unfavorable, and the controversy is beginning to shift in the direction of this sort of viewpoint. “The mud is selecting this kind of questions and persons are beginning to become familiar with the know-how.”
One answer to this worry that has been explored within the Netherlands and reported on by Power-Storage.information is time-limited contracts the place BESS can solely discharge or cost at sure occasions of the day.
However Jan Stuyt is a bit sceptical of this answer: “In principle it really works, however the query on these occasions is when, how a lot and the way lengthy? You may find yourself with a contract the place plenty of time is roofed by that settlement and the monetary reward of abiding by it’s negligible.”
One space the place BESS might play a big position however at the moment has a restricted one is the GOPACS market. GOPACS is the congestion administration platform run by transmission system operator (TSO) TenneT the place events can purchase and promote energy primarily based on regional imbalances on the grid. Together with GOPACS in a BESS grid connection utility would make it a lot simpler to progress its improvement.
‘No grid-scale BESS coming on-line this 12 months’
Whether or not it’s an anomaly or emblematic of all these challenges, next-to-no grid-scale BESS will come on-line within the Netherlands this 12 months based on Jan Stuyt. The one mission we’re conscious of is a 10MW/20MWh Alfen is deploying at a wind farm, introduced in December.
That may be a stark distinction to its close by international locations based on the newest information from analysis agency LCP Delta: 49MW/129MWh is ready to come back on-line in Belgium, 325MW/390MWh in France and 485MW/631MWh in Germany.
Power-Storage.information’ writer Photo voltaic Media will host the ninth annual Power Storage Summit EU in London, 20-21 February 2024. This 12 months it’s shifting to a bigger venue, bringing collectively Europe’s main traders, policymakers, builders, utilities, vitality consumers and repair suppliers multi function place. Go to the official website for more information.