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The Case for Distributed Storage in Ireland

As its wind capacity becomes significant

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Executive Summary• Ireland has an outstanding wind resource...• ...and can develop windpower commercially

at €50-60 per MWh• Once capital costs are paid, the long term

marginal costs of wind power are very low• The fuel-only price of power from gas is

already €70 – 80 per MWh...• …and is more likely to rise than fall

Distributed storage can make wind penetration viable up to 3,000 MW and even more

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Distributed Storage...• ...closes the gap between day before forecasted

wind output and actual wind output

• ...and so reduces the need for spinning and hot fossil stand-by plant to provide balancing power

• ...delivers primary, secondary and tertiary operating reserve in the event of a trip in the generation system

• ...delivers reactive power from many nodes

• ...can deliver a black start capability

The conditions for the commercial roll-out of distributed storage are the best in Europe

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VRB Demonstration Plants World-widePlace Application Specification Start dateKashima Kita PS, Japan Load levelling 200 kW x 4 h 1996

Office building, Osaka Load levelling demo 100 kW x 8 h 2000

Sanyo factory Voltage sag,

load levelling

3000 kW x 1.5 sec

1500 kW x 1 hour

2001

Wind power, Hokkaido Stabilization wind turbine output

170 kW x 6 h 2001

Dunlop Golf Course PV hybrid, load levelling 30 kW x 8 h 2001

University, Japan Load levelling 500 kW x 10 h 2001

Stellenbosch U, SA Load levelling 250 kW x 2 h 2001

EPRI, Italy Peak shaving 42 kW x 2 h 2002

Pacific Corp, Utah End of line peak shaving 250 kW x 8 h 2004

King Island, Australia Stabilization wind turbine 250 kW x 8 h 2004

Tomamae Wind farm, Hokkaido

Stabilization wind turbine 4000 kW x 2 h 2005

Nine Years - no re-invention of wheel needed

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Ireland’s dependence on gas - 1

Irish Generation Capacity by Fuel

Gas55%

Coal14%

HFO13%

SSG & LFG1%

CHP2%

Peat6%

Hydro9%

55% ...and increasing

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Ireland’s dependence on gas - 2

Gas Capacity by Type

OCGT11%

CCGT67%

Condensing steam22%

30% Efficient

40% efficient

51% efficiency impaired by

cycling

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"Fuel Only" cost of power Euro per MWh

0

20

40

60

80

100

120

140

160

180

0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 0.7

UK Gas, £/therm

CCGT Condensing steam Open Cycle GT

Price, October 2005

Winter Price, 2006August 2005

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When UK sneezes...

Source: FT 6 Oct 2005 & OFGEM, UK

Expect continued high prices for gas

into the indefinite future

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THE GOOD NEWS!Low Cost of Irish Wind Power

• High load factors achieved by wind generators in Ireland...

• ...and low bank interest rates for good wind projects

• ...mean Irish wind turbine owners can obtain a good return from a feed-in price of € 57 – 59 per MWh

John Ward – Murray AssociatesOctober 2005

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But the value of Irish wind Power......is reduced by:1. Stochastic nature of wind2. Difference between actual wind output

compared with forecast on gate closure previous day…

3. …therefore a need for balancing power provided by “firm” fossil units…

4. …so losing CO2 advantages5. Concentrations in “windy” west means wind

can provide almost no reliable capacity

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What can we learn from Denmark?

• West Denmark has peak load of about 3700 MW and domestic consumption of 21 TWh (2004)

• Eirgrid’s peak is about 3800 MW and domestic consumption of 26 TWh (2004)

Comparably sized electricity systems

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incotecoIreland & West Denmark

ESB Generation Adequacy Report, 2002

Demand 6 January 2004

1,200

1,700

2,200

2,700

3,200

3,700

4,200

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Demand 26 June 2004

1,200

1,400

1,600

1,800

2,000

2,200

2,400

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

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West Denmark Wind Power & Net Power Flow

January 2005

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2500

1

21 41 61 81 101

121

141

161

181

201

221

241

261

281

301

321

341

361

381

401

421

441

461

481

501

521

541

561

581

601

621

641

661

681

701

721

741

MWh/h

Net Power Flow Wind Power

Wind Load Factor 46.1%

Wind power over500 MW is usually exported

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How Wind Output Affects Net Power FlowJan thro July 2005

-500

0

500

1000

1500

2000

2500

-3000 -2500 -2000 -1500 -1000 -500 0 500 1000 1500

Net Power Flows, MWh/h

Wind Output kWh/h

Over 500 MW, Wind net exports

predominate

Trendline

West Denmark

Clear trend

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Intuition suggests...

• That without storage, wind power feed-in over 500 MW will be progressively more difficult to manage...

• ...as growing capacity and high load factor result in frequent output spikes

• Wind does not respect time of day and seasonal power demand

• Large scale wind capacity needs storage

Curtailment is wasteful!

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Growth in Wind Capacity & Market Share

0

100

200

300

400

500

600

700

800

900

1000

2003 2004 2005 2006 2007 2008 2009

MW

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Wind Capacity Wind's share of all MWh

EIRGRID: Generation Adequacy Report

Expect Increasingcurtailment

West DK wind output over 500 MW is most

often exported

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Batteries can restore this value

VRB battery at Tomamae wind park,

Hokkaido

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Tomamae - Output smoothing

Acknowledgement to J-Power

(1). Sum of generators output

Time[s]

[kW]

(2).battery is charging

(2).Battery is discharging(3).Target output (T=large)

(3).Target output (T=short)

(3).Target output (T=Variable)

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Smoothing at Tomamae supplies• ...grid quality power to Hokkaido

• reducing the number of fossil plants required to balance minimum, summer, night time loads...

• ...from two to just one fossil unit...

• ...saving fuel, operational personnel and mechanical wear

Scale of Operations on Hokkaido is similar to Irelandand West Denmark

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Forecasting still not perfect sostorage allows some balancing

Forecasts

Actual output

Source: EON Netz

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Irish Wind Capacity

Acknowledgement: IWEA

•Wind’s concentration in West•Will reduce firm capacity•Which storage can restore...•...to total sum of storage capacity delivered

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incotecoStorage can provide frequency control in milliseconds

49.549.5

49.249.2

Fre

qu

ency

(H

z)F

req

uen

cy

(Hz) 10 s10 s 60 s60 s

50.050.0TimeTime 10 mins10 mins

49.849.8

50.250.2 Continuous modulation serviceContinuous modulation service

Frequency fall arrested by Frequency fall arrested by primary responseprimary response

30 s30 s

PrimaryPrimary Secondary (to 30 mins)Secondary (to 30 mins) ReservesReserves

50.550.5

49.049.0

Lowest planned frequency Lowest planned frequency Start of auto demand disconnectionStart of auto demand disconnection

Statutory limit (+/-0.5Hz)Statutory limit (+/-0.5Hz)

Operational limit (+/-0.2Hz)Operational limit (+/-0.2Hz)

Aknowledgement: Lewis Dale, National Grid

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Also black start

Distributed storage gives system

• Regional clusters of instantly available power for re-starting fossil units

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Favourable economics depend on...• ...growing cost difference between raw wind

power and fossil plants, especially gas• ...ability of storage to eliminate use of spinning

and hot fossil capacity for system balancing– ...thus saving mechanical wear, fuel and CO2

• ...capacity income attributable from ability to deliver instant primary and secondary reserve

• ...raising firm capacity offered from wind– thus saving requirement to purchase new fossil

capacity

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Danish costs of balancingJan 2004 thro’ July 2005, West Denmark1. Generated 7.9 TWh of wind power2. ELTRA’s balancing costs were € 29.6

million3. ELTRA purchased 1.97 TWh of balancing

power• ….mostly for wind power

4. Balancing costs were € 3.74 per MWh of wind generated

5. Balancing power purchased was 0.25 MWh per MWh wind generated

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1.1 GW Wind – 200 MW Storage• Capital cost of storage (say) € 400 M• Unconstrained wind output 3.4 TWh / y

– Balanced by 0.85 TWh balancing power– At (say) € 80/MWh costing € 68 million per year– …provided by battery instead of fossil units– Saving (say) > 312,000 t CO2 per year from balance power

• + 300 – 400 MW of instantaneous primary and secondary reserve capacity at no fuel cost

• + instantaneously available black start capability• + 200 MW x (say) 4 hours standby capacity• + 300 – 400 MW, 20 minutes pulse capacity

Eirgrid to provide estimated values from records

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incotecoA significant Irish market justifies

study of local manufacture...

...of key components• Cell stacks that can

be industrially assembled

• Power Conversion Units (PCS)

• Thus reducing costs

Cell stacks

PCS Units

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There is an important export market

• Although the conditions for mass roll-out of distributed storage are best in Ireland

• ...the underlying conditions making it attractive in Ireland are common to the whole of Europe

• Especially Denmark, Sweden, Scotland, Germany and Spain

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European Market Size - Wind

Country

• Germany• UK• Spain• Portugal• Sweden

Planned Wind Power GW

25 – 35

10 – 20

20 – 30

5 –10

10 - 20

Ireland is (say) 3 GW

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incotecoNext Steps

1. Agree technical feasibility2. Agree economic feasibility3. Agree presentation documents4. Presentations to, dialogue with

• ESB Grid• Commission for Electricity Regulation• SEI• IWEA• Others

5. Go – No go!6. If go - accelerate significant demonstration at

Meenanilita7. Parallel studies & large scale roll-out