pv magazine: Could you briefly describe what technology and software systems you will be supplying to Centrica?
Stephen L. Prince: We’ll be designing and delivering a 49 MW lithium-ion battery system including the building solution, software and hardware. This being a Younicos solution, it contains the know-how and experience from 10+ years and 150+ MW installed and thus it will be able to respond to all necessary/commercially viable grid requirements within milliseconds. Its main purpose is to address fluctuations on the network, which is an increasingly important capability now the U.K. has fewer thermal plants and a larger proportion of renewables. Our unique Y.Q software platform will enable Centrica to utilize the asset to provide both peaking capacity and ancillary services. Centrica have announced that, among other things, they will be using the battery to provide extra peaking power, having recently won a capacity auction. They will also be able to use the asset for any future market opportunities.
How did the partnership between Centrica and Younicos come about?
SP: Centrica used a competitive bidding process to select a technology provider for their 49 MW plant, and the Younicos team was able to demonstrate the best combination of technical expertise and competitive pricing to be selected.
Post-completion, what will Younicos’ chief role at the site be?
SP: We have a long term service agreement to maintain the systems to guarantee high performance. We will be monitoring the site using our 24/7 operations center so we can proactively resolve any issues that may arise.
Following this deal and a previous installation in Leighton Buzzard, is Younicos eyeing any further storage projects in the U.K.? What is it about the U.K. energy market that makes it such a good fit for Younicos’ technology and software?
SP: Following the successful completion of the Smarter Network Storage trial, the U.K. is certainly one of the most attractive markets for us right now – in addition to our German and American home markets. Britain and Ireland are obviously islands – not only literally, but also electrically. That tends to increase the impact of grid transformations like we’re seeing now, and multiply the benefits of energy storage. At the same time a lot of renewable generation is being added, while older coal- and gas-powered systems go offline. This means that there is a strong and growing demand for energy storage and the flexibility and resiliency it can provide for both power producers and energy consumers.
That makes the U.K. attractive as a market – and not only because it’s embracing batteries at the grid-scale. It’s also a very interesting market for commercial and industrial (C&I) applications. C&I energy users are realizing that they can reduce their energy costs, add resiliency, and tap into new revenue streams by implementing storage.
“Steep price declines” are often cited as a reason for storage uptake in the past 12 months, so do you foresee these declines to continue into 2017 and beyond? What is driving these declines – is it simply better battery chemistry? More sophisticated software? Or a general growing acceptance of storage?
SP: Battery cell production works like PV module production: it is a volume-driven business. The higher the volume, the lower the prices. Different markets, such as grid-scale, C&I, residential and mobility, are beginning to merge, so I’m convinced storage prices will continue to decline steadily – as will the cost of renewables. Batteries have never been as heavily incentivized as solar, and so the market has never had to adjust to sudden shifts in demand following a reduction or cancelation of support schemes. As a result, I would expect the industry to be on a smoother cost reduction path than PV. Intelligent control software is a key element, less for price reduction than in optimizing the versatility and longevity of the storage asset – and thus its returns.
On that point, does Younicos detect a greater willingness on the part of commercial businesses as well as state-level utilities to explore the opportunities that storage can bring?
SP: Yes, I think it’s safe to say that storage is now becoming widely accepted. States as well as energy producers and distributors – and indeed large energy users – are understanding that batteries are an economically attractive and reliable asset to reinforce grids, while also optimizing energy production and consumption. We’re proud to have been involved in the provision of so many proof points for this. Younicos essentially opened up the business case for using batteries for Primary Frequency Regulation with the WEMAG project, but before that we were the first to successfully integrate a battery into the PFR market in Europe.
We also helped prove that batteries can provide multiple services – and revenues – in parallel, in the SNS trial for UKPN. Graciosa island in the Azores is set to transform the global microgrid market once its final testing is completed early next year. And we’ve effectively bundled and “fused” all of our experience in our Y.Cube plug-and-play solution, which we will be bringing to Europe, and indeed the U.K., early next year too.
How vital has the Younicos/WEMAG 5 MW solar battery park in Schwerin, Germany, been in driving forward the company’s progress in frequency regulation, voltage control and ramping up power? Are there plans to increase the size of this operation, or build something similar elsewhere?
SP: WEMAG was a very important proof point, not only for us, but I think it’s fair to say for the entire industry. We had developed this type of system for years. Once we found such a committed partner in WEMAG, we were able to prove that we not only had a firm grasp on the commercial and technological potential of batteries for the grid, but also that we had been very conservative and careful in our claims. We recently announced that we will be doubling the power and tripling the energy capacity of that installation. I’m happy to report and we’ve already made significant progress and look forward to commissioning the expansion next fall.