BESS Study for Mitsubishi and TenneT

E-Bridge led a consortium of expertise to carry out a study in order to investigate the technical, legal-regulatory and economic possibility of the application of BESS (Battery Electricity Storage System) in the areas of ancillary service. In particular, E-Bridge conducted an in-depth analysis for provision of primary control reserve (PCR), the provision of secondary control reserve (SCR) as well as the provision of tertiary control reserves (minute reserves or mFRR).

For each of the ancillary markets the technical requirements, such as the prequalification, have been analyzed and matched with technical potentials of BESS. Based on these requirements for first, the costs, which arise when investing in and operating a BESS have been evaluated. E-Bridge has examined through the selection of the best suitable battery type and its costs. The latter is based on the analysis of charge and discharge profiles as well as on overall utilization of battery for each specific service. The charge and discharge profiles become available after examining the historical demanded balancing power in Germany. The results of the cost analysis show that the variable costs vary widely among the services provided by the BESS.

To evaluate the potential profits from utilization of BESS in ancillary market the revenue for each service has been estimated employing the historical price data for primary control, secondary control and tertiary control (mFRR). For all service the providers in Germany are placing bids for capacity reservation (€/MW) and for balancing power (€/MWh). The exceptions are the bids for primary control as only capacity bids are required. Due to enormous overcapacity in the wholesale market and the resulting price drop many of the conventional suppliers run their capacity rather part-time. Thus, many of those seek for other business opportunities and enter the ancillary markets. The increased competition leads usually to lower prices and, in turn, affects the profitability of BESS. However, our study shows that the potential profits of BESS heavily depend on the provided service.

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