Energy Storage as Virtual Transmission

Just last year, energy storage’s role on transmission networks was still being debated, considered, and proposed in a variety of sizes and uses. Just one year later, Fluence’s global team has helped advance the deployment of battery-based energy storage as “virtual transmission” assets, with a variety of markets considering such projects and multiple networks actively moving forward on projects totaling over 1 GW.

Battery-based resources as virtual transmission remain a new but critically important application for Australia’s networks. “Big batteries” offer both network planners and regulators a key resource for increasing the import and export capabilities of existing interstate transmission lines in Australia’s National Electricity Market (NEM), increasing their value and adding greater resilience to the NEM overall. In renewable energy hotspots like northwestern Victoria and proposed Renewable Energy Zones in central-west New South Wales and northern Queensland, virtual transmission assets can help relieve congestion and add interconnection capacity, enabling more solar and/or wind deployment.

Defining Virtual Transmission

Virtual transmission is the utilization of specifically configured battery energy storage systems in place of transmission capacity to provide combinations of capacity, services, and capabilities that achieve greater value than traditional solutions. Virtual transmission projects can take the form of single assets, pairs of assets working in tandem (as “virtual transmission lines”) to mimic line flows at both ends, or as a portfolio of assets across the system, as with the trio of assets recently approved in Germany. The key is what applications networks need such a system to provide:

• If a transmission line is regularly running near its thermal limits, energy storage can be deployed to inject power downstream from the congested line. This can enable the network to manage its peak load while deferring or avoiding the need to upgrade the line.
• Energy storage can be deployed as additional transmission capacity, increasing the operational capacity of existing lines. Strategically positioned storage can inject power to ensure grid stability during a contingency, such as when a line trips off.
• On congested transmission lines, energy storage can again be deployed to inject power, with the goal of reducing net load payments or avoiding curtailments, providing benefits to network customers.
• Energy storage can be deployed at the distribution level to support greater penetration of intermittent distributed resources like rooftop solar. The batteries can be placed on the network, injecting both real and reactive power to manage “voltage stiffness,” which can restrict how much solar can be integrated at the feeder level.
• Lastly, storage can provide familiar capabilities like frequency response or other reliability standards at the transmission level – similar to the Fast Frequency Response or “synthetic inertia” service being procured by the grid operator in Ireland – to improve overall transmission reliability.

“Kaleidoscope” of Options Being Evaluated in Markets Globally

In Germany, Colombia and Chile, regulators are looking at virtual transmission to address congestion along key transmission corridors, where either large amounts of renewable generation is producing more power than the wires can deliver or there are pockets of transmission congestion. Both of these require “redispatch,” curtailing generation on one side and firing up generation on the other to ensure supply and demand remain balanced. By adding virtual transmission assets to manage contingency events – overgeneration or unexpected spikes/dips in demand – networks can avoid the added cost of forcing generation online or offline and run the system more optimally.

German regulators have already approved proposals for three massive storage assets (also called the GridBooster projects), which are now moving to procurement stage – two 100 MW projects and one 250 MW project. Colombia has called for proposals for two 50 MW projects and Chilean regulators are reviewing proposals for as much as 500 MW of these projects.

In the United States, energy storage is being evaluated in regulators in California, the mid-Atlantic region, the Midwest and the Southwest Power Pool as a transmission-only asset. The nation’s top federal regulator (FERC, federal energy regulatory commission) is actively involved in a regulatory proceeding on the same subject. Overall, clarifying the regulatory construct for transmission-only storage assets would allow transmission companies to own these assets wholly to provide network services, enabling them to defer and potentially avoid costly and time-consuming upgrades to lines.

In short, instead of waiting for others to go first, countries around the world are rushing to the starting line, getting their first virtual transmission projects in motion to address critical needs.

Non-Network Options Get Closer Look for 2020 ISP

Australia is also moving quickly compared to the typical 5-10 year timelines for transmission infrastructure projects. Australia’s regulators are continuing to evaluate battery-based options for adding more capacity on the interconnectors between the states, which can be deployed in a more scalable fashion than traditional infrastructure.

The big change? Last year represented the first time battery-based assets were considered for as a non-network alternative to traditional infrastructure upgrades under the NEM’s Regulatory Investment Test-Transmission (RIT-T) process, as an option for upgrading the Queensland-New South Wales Interconnector.

This year, similar non-network upgrade options have been considered for inclusion in the 2020 Integrated System Plan, AEMO’s strategy roadmap looking out to 2040. These options would offer a way to add new capacity to the NEM’s interconnectors joining state grids in 1-2 years instead of 7-8, strengthening these key transmission corridors in phases, ensuring the right amount of capacity is added based on how Australia’s generation mix continues to change.

Fluence’s team has been advancing applications of grid-scale storage since we deployed the first lithium-ion based project in the U.S. in 2008. Compared to the earliest days of storage deployments, innovation today is happening at light speed across the grid.

Want to learn more about virtual transmission? Download Fluence’s white paper on “Building Virtual Transmission: Critical Elements of Energy Storage for Network Services.”

Contributed by Achal Sondhi, Market Applications Director, Asia Pacific, Fluence

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