Battery energy storage systems to boost the reliability and adoption of renewable energy

Load-shedding has been an almost daily occurrence during the winter months and has now reached historic levels — and is likely to worsen over the five months remaining in 2022 (figure 1). 

With the economy showing signs of rebounding in 2022, the intensity of load-shedding has hurt businesses and their post-pandemic recovery.

At Eskom, unreliable generation capacity is aggravated by operational issues, resulting in unplanned outages at multiple generation plants — primarily because of a lack of maintenance. Eskom’s ageing fleet of power stations and unplanned outages have affected the power producer’s generation capacity for years and these constraints remain a big challenge for future growth. 

The system will continue to be a constrained until substantial new power capacity is invested in and the regulatory processes for registering these installations are sped up. There are signs of new capacity coming on stream thanks to the small-scale embedded generation market.

In addition to load-shedding, increasing tariffs by Eskom (9.61%) and municipalities (8.61%) have improved the investment case for businesses in renewable energy generation and energy-efficient interventions. A growing number of business owners are installing renewable energy technologies to power their daily operations and hedge against steep increases in electricity costs.

There is also a growing trend of businesses exploring and investing in battery energy storage systems (BESS) to mitigate the impact of load-shedding. The decline in prices of batteries (in this case lithium-ion), as well as their benefits at times of load-shedding, have made for a stronger business case. 

As a storage system, BESS’s advantage is its flexibility of use in many different applications independent of location, in contrast to, for example, pumped hydro storage.

The type of BESS application needs to be aligned with the right BESS technology such as lead-acid, lithium-ion (with many different subtypes), sodium-sulphur and vanadium redox, to maximise value. The technologies have their own strengths, weaknesses and performance characteristics, including depth of discharge, power output, weight, energy density, response time, safety and thermal performance. Evaluation is usually done on a case-by-case basis.

The main uses for BESS are grouped into two categories: stationary applications, such as backup power and peak demand shaving; and in-mobile applications, such as portable machinery, electric vehicles and cellphones. 

Some of the more typical applications of BESS for businesses and farmers are presented below.

Increased PV self-consumption

The challenge with renewable energy, including PV panels, is that resource availability (for example, the sun) does not always coincide with demand. This is problematic for residential or commercial customers, who are often not allowed to supply their excess PV energy back to the utility (generated when there is more solar supply than demand at their premises). BESS allow these customers to save this excess PV energy for later use (illustrated in figure 3), increasing these customers’ consumption of their PV energy.

Peak shaving

As the demand for energy increases, so does the cost of delivering this energy. Often the country’s demand is so high that “peaking generation” units, such as gas turbines, need to be used to meet demand. Because of the costs of running these units, electricity tariffs during these peak times are higher than during off-peak times. As shown in figure 4, shaving this peak, through businesses and households discharging their energy stored in batteries to supply their peak needs, can be beneficial to the utility (which saves on expensive fuel) and the end-user (who saves on monthly electricity costs).

Arbitrage

The value of energy, as with any commodity, is inherently linked to demand. The higher the demand, the higher the price of energy. This pattern can be capitalised by charging a BESS during low-demand periods at a low cost and selling the stored energy at a competitive price during high-demand periods. This is illustrated in figure 5 — the maroon zone indicates low energy prices and the red zone indicates high energy prices. The difference between the two gives the value that can be obtained.

Figure 5: Arbitrage cycle for BESS, demonstrating a value extraction opportunity. Source: Energystorageconsultants.com. Picture: SUPPLIED

For your business’s future energy mix, solar PV and BESS are likely to be the most viable options. Given the declining costs of the technology, increasing energy costs, our abundant sunlight availability and the long lifespan of the technology, the business case is increasingly attractive. Solar PV is therefore a key enabler, ensuring affordable, reliable and sustainable energy for all.

To find out more on how an agro-processor was able to mitigate energy constraints with solar systems and batteries, watch the video by Spif Chickens below:

This article was paid for by Absa Business Banking.