TenneT, a major European grid operator, is embracing large-scale Battery Energy Storage Systems (BESS) to address challenges in the Dutch electricity market, which include grid volatility and market developments. The company foresees a need for around 9GW of BESS by 2030 for system stability. While BESS offers revenue streams such as energy arbitrage and ancillary services, TenneT emphasizes avoiding additional network congestion. The document highlights the increasing interest in BESS and the need for regulatory adjustments to accommodate storage and renewable energy sources.
- TenneT has written a document on Battery Energy Storing System (BESS)
- It shows the need for such systems in solving the challenges in our electricity market.
The Growing Need for BESS
TenneT’s position on applying large batteries (>70MW) by market parties to the grid is outlined in a recently released corporate presentation. The report highlights the growing need for balancing, inertia, and reactive power products, which BESS can fulfill. The demand for energy storage systems is driven by the increasing penetration of renewable energy sources, resulting in higher grid volatility and a greater demand for flexibility.
With the expectation that BESS will play a crucial role in providing system stability, TenneT estimates that approximately 9GW of BESS will be connected to the grid by 2030. This estimation is supported by the “Monitor Leveringszekerheid 2022” report, which projects the future requirements of the Dutch electricity market to ensure a reliable and secure supply.
Balancing Benefits and Network Congestion
While BESS presents numerous benefits, including voltage support, stabilization, congestion management, and fast frequency response services, TenneT emphasizes the importance of avoiding additional network congestion. To address this concern, a working group has been established between EnergyStorageNL, grid operators, ACM (the Dutch Authority for Consumers and Markets), and market parties. The collaboration aims to find solutions to prevent congestion caused by large-scale energy storage systems and ensure the successful integration of BESS into the grid.
As a result of these efforts, TenneT has received a significant number of connection requests for BESS, indicating the growing interest of market parties in large-scale energy storage solutions. Integrating BESS can help manage grid balancing and congestion, making it a promising approach for the future of the Dutch electricity market.
Revenue Streams and Market Opportunities
The report says that BESS offers various revenue streams, including energy arbitrage, ancillary services, peaking capacity, and access to wholesale energy markets. Energy arbitrage involves buying electricity when prices are low, storing it in batteries, and selling it back to the grid when prices are high. Ancillary services refer to support services required to maintain the stability and security of the electricity grid. Peaking capacity is the extra electricity generation capacity that can be called upon during periods of high demand or when other sources of generation are unavailable.
These various revenue streams create a potentially viable business case for large-scale BESS, especially in light of the market developments and price volatility that characterize the Dutch electricity market.
Regulatory Adjustments and the Future of BESS
The successful integration of BESS into the Dutch electricity market will require regulation adjustments to accommodate the technical possibilities offered by storage and renewable energy sources. TenneT emphasizes the need for such changes and the importance of collaboration between stakeholders to ensure a smooth transition toward a BESS-powered future.
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