The Role of Energy Storage Systems (ESS) in Electrical Power Systems
In power systems, energy must generally be generated at the same time it is consumed, as any imbalance can lead to stability issues and degradation of grid voltage and frequency.
However, driven by the global transition toward decarbonization and sustainable energy systems, the integration of distributed energy resources into power grids has significantly accelerated over recent decades. As a result of the widespread deployment of renewable energy sources, achieving a balance between generation and demand has become increasingly complex. This challenge arises not only from a technical perspective, concerning the operation of power systems, but also from an economic standpoint, considering electricity markets.
The displacement of conventional synchronous generators—which traditionally provided essential services such as voltage and frequency regulation, inertia, and reactive power support—along with the variability and intermittency inherent in renewable energy sources, introduces a new paradigm. In this context, energy storage systems (ESS) emerge as a viable alternative to address the challenges posed by the evolving models of power systems.
The applications of ESS in power systems can be categorized into energy applications and power applications.
In energy applications, ESS provide services to the electrical power system by exchanging energy with the grid over extended periods, often exceeding 30 minutes. Key energy applications of ESS include load leveling/load shifting, peak shaving, capacity firming, energy arbitrage/energy time-shifting, black start, self-consumption, and fuel savings.
Certain ESS applications, however, require response times ranging from seconds to several minutes. This is the case for power applications, where energy storage systems contribute to ancillary services of short duration. These services, provided by grid agents, ensure reliable and secure operation of the electrical system, maintaining stability under different scenarios. Key power applications include inertia emulation, power quality, voltage support, frequency regulation, smoothing/ramp-rate control, and load following.
Various types of energy storage systems can provide services to power systems, with electrochemical battery storage being one of the most prominent in recent years. Among these, certain technologies are more suitable for specific applications depending on parameters such as power density, energy density, cycle life, or response time.
Energy Storage Systems in the Context of Demo 3
The i-STENTORE project serves as an ideal framework to explore different storage technologies and their role in integrating renewable energy sources. Specifically, the Spanish pilot, Demo 3: Virtual Energy Storage System for Renewable Energy Integration, focuses on two electrochemical battery technologies: lithium-ion batteries (LIB) and vanadium redox flow batteries (VRFB).
In recent years, VRFBs have emerged as an optimal choice for large-scale stationary applications due to their particularly favorable characteristics. In these batteries, energy and power are decoupled—energy storage capacity depends on the concentration and volume of the electrolyte fluid, while power rating is defined by the characteristics of the cells in the stack—resulting in high flexibility. Due to their scalability, these batteries are technically and economically advantageous for large-scale energy storage, particularly for applications requiring several hours of storage, such as energy arbitrage. Additionally, VRFBs offer low degradation, long cycle life, and a long overall lifetime, characteristics that are unaffected by a high depth of discharge.
On the other hand, lithium-ion batteries, widely used in portable systems and electric vehicles, are increasingly implemented in stationary applications due to their high power and energy density. The significant price reduction in recent years has further encouraged their adoption, despite occasional increases driven by geopolitical events. Fast charging, high round-trip efficiency, high reliability, and fast response times make LIBs suitable for both power and energy applications. However, proper control and monitoring of their operating conditions is essential to avoid premature degradation and extend their cycle life. Unlike VRFBs, a high depth of discharge negatively affects the overall lifetime of LIBs.
Depending on the sizing and the services required, both technologies exhibit specific characteristics that make them more suitable for particular applications. For this reason, hybridization of VRFBs and LIBs is a potential solution, combining their strengths in power and energy applications, durability, and cost-effectiveness.
Use Cases of Demo 3
Demo 3, located in the province of Granada, southeastern Spain, integrates these two technologies into a digital platform to operate as a Virtual Energy Storage System (VESS). This platform also considers the operation of a hydropower plant, enabling the provision of ancillary and flexibility services to both the Distribution System Operator (DSO) and the Transmission System Operator (TSO), as well as storage services for a photovoltaic (PV) plant and a wind power plant within the same distribution grid.
Based on the technical characteristics of the assets to be installed and the Spanish regulatory framework, three key use cases have been identified:
1. Participation in the Day-Ahead Market for Energy Arbitrage
The first use case involves storing energy during periods of low electricity prices, typically corresponding to low demand, and selling it during high-demand periods at higher prices. Demo 3 focuses on maximizing profits from the participation of the VESS in the Day-Ahead Market, optimizing the state of charge (SOC) of the battery based on forecasts for wholesale market prices and renewable generation from the PV, wind, and hydro power plants within the distribution grid in Granada.
2. Participation in the Tertiary Reserve Market
The second business use case evaluates the benefits of the VESS participating in real balancing markets, specifically the manual Frequency Restoration Reserve (mFRR), also known as the Tertiary Balancing Market. The VESS provides grid support to the TSO, leveraging its technical capabilities to engage in this service. Through manual activation by the System Operator, this service helps maintain system frequency and the balance between generation and demand. It restores the availability of the automatic secondary regulation reserve and returns the system to its normal operating state.
3. Provision of Flexibility Services to the DSO
The third use case focuses on the provision of services to the DSO as a Flexibility Service Provider. This involves mitigating grid congestion and over-voltage events through bilateral contracts between the DSO and the VESS.
By leveraging the capabilities of batteries, grid operators gain a powerful tool to maintain grid parameters at safe and reliable levels. This is particularly critical given the challenges posed by the massive integration of renewable energy into the system, as is the case for the Granada distribution grid where Demo 3 is implemented.
Currently, the use of batteries in power systems is somewhat limited, partly due to uncertainties about return on investment. The use cases of the Spanish demonstrator aim to address these uncertainties and provide empirical data, delivering tangible insights into the viability of storage systems within electricity markets.
Author(s): Carolina María Martín Santos (UC3M)
Share now!
