German Utility Invests 100 Million Euros To Install 90 MW Battery Energy Storage System

2 years ago by Mark Kane 33

LG Chem

LG Chem

LG Chem Lithium-Ion Polymer Battery Cells

LG Chem Lithium-Ion Polymer Battery Cells

A major energy storage project was announced by STEAG, a utility company that invested around €100 million in six ESS totaling 90 MW at its power plants in Germany found in Herne, Lünen and Duisburg-Walsum (all in North Rhine-Westphalia) and in Bexbach, Fenne and Weiher (all in the Saarland).

Batteries will be supplied by LG Chem. Each of the six ESS will be 15 MW. In total 140 MWh of energy is to be stored – enough to supply 10,000 households per day with electricity.

Installations are to be made from mid-2016 to early 2017.

“The large-scale batteries are to be used to provide primary control power – a service for stabilization of the networks, for which the Transmission System Operators invite bids on a weekly basis. Primary control serves to stabilize the network frequency when there are short-term fluctuations in the grid (caused, for example, by uneven feed-in of energy from renewable sources which deviates from the forecasts, by power plant outage or by fluctuations in consumption). The six systems are to be operated independently of the STEAG power plants and are capable of relieving the grid fully automatically within a few seconds when there is surplus supply, and also in reverse feeding energy into the grid.”

“STEAG’s large-scale batteries will satisfy the current performance criteria for battery storage systems supplying primary control power, for instance the requirement of being capable of providing primary control power for at least 30 minutes. STEAG can thus play a pioneering role in the establishment of battery systems and the marketing of their energy. Rapid implementation and entry into the market as early as possible play a decisive part for STEAG.”

Joachim Rumstadt, Chairman of the Board of Management of STEAG GmbH, explained the decision to make this investment as follows:

“Storage facilities and the creation of flexibility are essential elements in the implementation of the energy transition in Germany. STEAG has therefore decided to make this investment in large-scale batteries for deployment on the control power market, without making use of grants or subsidies.”

“Moreover, we believe that renewable energies will have to take a more responsible role in ensuring security of supply and, therefore, will have to provide more firm capacity on the energy-only market. Combined with extensive commercial and technical expertise in energy, which we can draw on, battery systems will be one key to resolving this issue.”

LG Chem has a high hopes about the German market, which is also the largest in Europe.

Santiago Senn, director of Energy Storage Systems at LG Chem Europe GmbH said:

“The German energy market is the largest in Europe with annual consumption of around 550 terawatt hours and a production capacity of 125 gigawatts. Due to the political developments in the energy industry in recent years, the need for ESS solutions is enormous. With more than 200 projects implemented around the world, such as currently in Hokkaido, Japan, we have both the technology and the expertise to make a considerable contribution to this market.”

LG Chem

LG Chem

Source: STEAG via Green Car Congress

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33 responses to "German Utility Invests 100 Million Euros To Install 90 MW Battery Energy Storage System"

  1. ggpa says:

    100M euro is 106M USD

    That means each kWh costs $815.

    I think that is too much to pay in 2015.

    It seems German Utilities waste money just as much as our own PG&E.

    1. Someone out there says:

      They are not just buying a truck full of AA batteries. Handling huge energies in a commercial setting requires extra equipment, guarantees and support from the manufacturer.

      1. ggpa says:

        Nope, your wrong. This is twice the price per kWh of Tesla Powerwall. Not worth it.

        1. ggpa says:

          typo …
          you’re

        2. Someone out there says:

          Total cost is not just material cost. The utility can purchase a bunch of Powerpacks but they still need to get them installed, they need warranty over a long period of time (businesses does not have the same consumer protection laws as you do) and they need training for their staff to handle these units safely. These costs add up.

        3. Cavaron says:

          We all know batteries operating with DC and the grid mostly with AC. So what would you consider a fair price for a 90 MW AC/DC konverter?

        4. mr. M says:

          Tesla powerwall has no waranity for 10 cycles daily over 20 years.

          And even if you buy a tesla powerwall you will still need some building, technical , wires, converter, … this sums up pretty easily to half of the whole price. Then you are around 400$/kWh, pretty close to the 350$/kWh that tesla offers.

        5. ggpa says:

          @Someone, @Caveron, @M

          I have the following problems with your answers
          1) You provide no facts
          2) You assume things like Tesla products have bad warranties and the utility solution comes with perfect warranty
          3) It seems like you did no research or analysis and like making things up

          The bottom line for me is that utilities have no sacred right to exist at any cost and waste our money. If a utility solution costs twice as much as putting batteries in consumer houses/offices then we should go for the distributed solution.

          To me this looks like a boondoggle, just like http://insideevs.com/consumer-watchdog-petitions-california-utility-commission-reject-pges-charging-station-build-proposal/

          1. mr. M says:

            You are right, distributed will always be cheaper than centralized power, because you save wires.

            But you are wrong if you state that tesla batteries are way cheaper, because we don’t know many variables of both solutions (tesla vs. this instalation). It is simply not comparable with the information we have regarding both systems.

        6. Stephen says:

          And Powerwall magically appears in your home with no installation costs?

    2. Seth says:

      Bad news, 100MW substations don’t come cheap.

      Yay for over-simplification, you are comparing the battery price of one thing with the infrastructure price of something else.

      There is ground you must either rent or buy, you need to tie into the grid, you need to have this directly controlled by the grid operators to stabilize demand and production.

      This really isn’t that bad, if I google “cost of 1 mile of electric grid” it comes out to about 1 million usd. If they are lucky they are within 5 km of a existing powerline, where you need another substation, but you already blew 10 Million right there.

      Infrastructure is very costly, but we need it.

      1. Samwise says:

        On top of this there is no way that one connection to the grid is going to be sufficient for the power output of a storage device capable of powering 10,000 homes, clearly there will be multiple very massive, very expensive connections. Heck just the administration and control systems for this thing will run into the millions.
        The site itself is probably worth another bunch of millions.
        They probably spent more again on feasibility and safety studies along with test environments before they even started the project. Pretty sure your not allowed to just tie a massive power station into the grid without proving a whole bunch of things to the grid operators first.
        That’s just life in big infrastructure.

  2. Pushmi-Pullyu says:

    “In total 140 MWh of energy is to be stored…”

    That sounds like a lot. But let’s remember that the average power plant generates about 500 MW, so in a 24 hour period that’s 12,000 MWh! Storing the entire output of the plant for only, say, two hours would require 1000 MWh of storage.

    Compared to that, 150 MWh of storage isn’t much. It’s good for peak shaving, and for stabilizing fluctuations in demand, so that’s good for the electric utility. But if we as a society want to move to using renewable energy sources for grid power — mostly hydro, solar, and wind — then we will need much more storage capacity than that.

    Bottom line: This is a good first step, but it’s only a first step.

    1. heisenberght says:

      All we need is V2G. How many GWh are on the road now? 90000 Tesla @ 60 kWh = 5.4 GWh even if we use only a fraction of that for peak shaving and some for additional storage that would have quite an impact already… unfortunately not all Tesla S are located in germany 😉

      1. mr. M says:

        Unfortunately teslas business model (supercharging for free) will not allow vehicle to grid (V2G).

  3. RalphE says:

    The interesting questions is how fast can they dump the 140MWh.

    Assuming 1) it can charged during the day with excess (thus free) solar power, 2) emptied each night and 3) lifetime of 10 years, we get these numbers.

    140MWh per day * 365 days per year * 10 years =
    115,572,870 MWh provided. Divided by the plant cost of $106M, we get $1.09 per MWh provided, which is an excellent cost for electricity. (Well less that $.01 per KWh.)

    Even with significant changes to the assumptions they will still provide electricity at less than $.10 per KWh, which is significantly less than Germany’s typical cost.

    1. buu says:

      except u suck at math ant its 200$/MWH at your numbers, but hopefully its twice cycles as your numbers so it’s only 100$/MWh (not counting AC-DC-AC and battery charging/discharging loses)

      1. Three Electrics says:

        Yes, it’s twenty cents per kilowatt hour; used once a day, it would roughly quadruple the cost of renewable electricity. This is what residential users have in store once net metering is at capacity.

        1. ggpa says:

          “This is what residential users have in store once net metering is at capacity.”

          I hope not, for two reasons. There is a very good change battery storage will get cheaper, and a tiny change that our politicians will be smart enough to extend net metering.

        2. mr. M says:

          20ct/kWh is ok for peak shaving. This only 4 times the production cost. Intraday Prices at the electricity market vary between -100€/MWh and +170€/MWk. Read Fraunhofer solar slides for intraday prices of last year in germany.

          1. ggpa says:

            Here you like peak shaving, elsewhere you dislike rates that change over time. Pick one or the other.

            It is clear to me this is a bad investment from a purely storage perspective, but I guess there could be a good case to acquire systems like this to help with frequency stability, reducing cost of spinning reserve.

            1. mr. M says:

              I like peak shaving, it smoothens the price. And with increasing RE it is inevitable. What i dont like is changing prices for a private user. I dont care if night price is 0.1$, day is 0,2$ and noon is 0,25$. Just make it 0,15$ all day long or whatever a good average would be.

              I just don’t see myself running the microwave/oven/washing maching later because of different prices. When i need them, i use them. Only thing i could think of is intelligent EV charging. But that is only 10% more load to the grid with all(!) cars going BEV. This is not much.

    2. Seth says:

      Well, the station is 90MW, so the can dump the power in about an hour and a half.

      What this solution buys is the 15 minutes that they need to fire up another power plant, not increase self consumption of the grid perse.

      And in between the grid operators there is money to be made right there on the 15 minute power market. This thing basically makes money all day. You buy power cheaper over the course of a day and sell when the price increases.

      During some of the times during the day and a lot of production the 15 minute kWh price will often be negative, meaning you get paid for consumption, and if you have something to store that energy you got 1 Cent per kWh for, and sell it for 4 cents per kWh an hour later you just made money!

      1. ggpa says:

        “got 1 Cent per kWh for, and sell it for 4 cents per kWh an hour later you just made money!”

        No, you are not making money if the battery pack lifetime cost is 20c/kWh as calculated elsewhere on this page …

  4. Three Electrics says:

    While this system will not be used for power arbitrage, there are unique opportunities for such in Germany. On some days, electricity cost can drop to roughly two cents per kWh on surplus of renewable power. This site shows the volatility: https://www.energy-charts.de/price.htm

    1. ggpa says:

      The price volatility is similar in the USA if you look at wholesale prices. For instance at night electricity is super cheap, but the utilities are not currently passing that benefit onto the consumers.

      1. mr. M says:

        I dont want my energy prices to change every 15 minutes or less…

        1. ggpa says:

          LOL … this is the same peak shaving that you promote elsewhere …

          1. mr. M says:

            Since i am a private customer, i dont get intraday prices. Peak shaving means using batteries to reduce grid fluctuations. This makes only sense because backup is expensive or trading with stored electrcity makes sense.

            That the system somewhere has fluctuating energy prices must not mean a private customer has fluctuating energy prices. My price per kWh is fixed for a year and i like it.

            PS: ok peak shaving can also occour because of shifted demand (price fluctuations) or more input (added solar).

            1. ggpa says:

              You write – “Since i am a private customer, i dont get intraday prices.” Well, that may be your choice.

              In California consumers can choose to get a fixed price or one that varies by time of day. I think it is good that this offered for individuals or businesses that want to use that flexibility.

              One goal of time of day pricing is peak shaving, at a price lower than 20c/kWh that STEAG is estimated to pay for these batteries.

              My gripe is that California time of day pricing does not track wholesale power prices, so it will not achieve peak shaving.

    2. heisenberght says:

      Thanks for the link.

      and btw cost is even negative sometimes 😉

    3. zzzzzzzzzz says:

      The problem is that there is no storage cheap enough to reach even the very top of these fluctuations. The cheapest ones can reach 0.20EUR/kWh at best.

      https://www.lazard.com/media/2391/lazards-levelized-cost-of-storage-analysis-10.pdf