Why do we need battery energy storage systems?
Battery energy storage systems (BESS) can play an important role in the energy transition as the world increases its share of intermittent renewable generation capacity. These systems can store excess power generated from solar and wind and release it when the electricity grid needs the power most
BESS can also provide services that make the grid more resilient. This allows for more renewable energy sources to be connected to the system.
Installed battery storage capacity is set to rapidly proliferate. Bloomberg New Energy Finance (BNEF) estimates that BESS will grow 80-fold from today to 2050.
There are two main drivers for investment in BESS: energy trading and providing ancillary services.
- Power price volatility is a natural part of the energy market and is driven by the difference between supply and demand of electricity.
- High deployments of renewable energy power plants in an electricity grid can create more volatile power prices (since renewable sources are intermittent, and do not produce at regular intervals).
- When there is an excess of renewable generation, power prices tend to drop and when there is a shortage, power prices tend to rise.
- BESS systems can smooth these peaks and troughs by buying power when there is excess renewable energy and selling power when there are renewable energy shortages. With enough batteries, the difference between the peak and trough prices will decrease, helping protect the electricity system from power price extremes.
- Ancillary services refer to activities beyond power generation that are required to maintain the security, reliability, and stability of the electricity grid.
- These services can include activities such as frequency response, reactive power control, or inertia response.
- Historically, ancillary services have been provided by large power plants, however, batteries are playing an increasing role as more renewable generation is introduced to electricity systems.
Our battery storage portfolio
Equinor aims to integrate battery storage assets in our renewable portfolio in selected power markets. Our geographical focus for battery storage has been in the UK and the US – two of the most advanced markets for battery storage globally, where we have strong positions as a company and our largest offshore wind positions.
We have entered these markets through acquisitions of local companies characterized by high-quality teams, proven track records, and attractive project pipelines. We aim to capture value by transforming and scaling the businesses together with the local teams and leveraging synergies within Equinor.
Today we own:
- 45% of Noriker Power Ltd, headquartered in Gloucester, UK. Noriker Power has a 0,5 GW pipeline in battery storage and hybrid energy projects across the UK. The first project from Noriker’s pipleine, Blandford Road was sanctioned in October 2022, and is expected to be operational in Q3 2023.
- 100% of East Point Energy LLC, headquartered in Charlottesville, Virginia, US. East Point Energy has a 3.3 GW development pipeline in battery storage projects in the US.
We see a strong opportunity to create a profitable business by deploying battery storage assets in selected power markets. This is based on the flexible nature of the assets and Equinor’s advanced trading capabilities through the wholly owned energy trading house Danske Commodities.
How do battery energy storage systems work?
- BESS include both batteries and power conversion systems (PCS)
- Batteries work by converting electricity (i.e. electrical energy) into chemical energy and back when needed.
- Batteries are made of electrochemical cells involving two type of charge carriers: ions and electrons.
- These cells consist of two electrodes (anode and cathode) made of a material capable of hosting the required ions (e.g. lithium ions), a separator (to avoid direct contact of the electrodes preventing a short circuit) and an electrolyte allowing the transport of ions.
- The electrodes also contain a current collector and are connected to an external circuit allowing the transport of electrons.
- Lastly, a battery cell’s voltage and current are different from what is used on the electricity grid. The PCS equipment (usually inverters and transformers) convert current (DC-to-AC) and voltage to ensure proper connection and compatibility with the grid.
When charging, ions de-intercalate from the cathode structure to diffuse into the electrolyte, through the separator to intercalate into the anode structure. Meanwhile, to maintain electro-neutrality (charge balance), electrons move through the external circuit, creating an electrical current.
During discharge the reverse reaction takes place. Ions de-intercalate from the anode structure to diffuse into the electrolyte, through the separator to intercalate into the cathode structure. Electrons move through the external circuit in the opposite direction.