Planning and operating energy storage for maximum technical and financial benefits in electricity distribution networks

Abstract

The transmission and distribution networks are facing changes in the way they will be planned, operated and maintained as a result of the rise in the deployment of Low Carbon Technologies (LCTs) on the power grid. These LCTs provide the benefits of a decarbonised grid and reduce reliance on fossil fuels and large centralised generation. As LCTs are close to the demand centres, a significant amount will be deployed in distribution networks. The distribution networks face challenges in enabling a wide deployment of LCTs because they were traditionally built for centralised generation and most are operated passively as demand patterns are well understood and power flows are unidirectional to load centres. The opposite will be the case for distribution networks with LCTs. Utilities that own and operate distribution networks such as the DNOs in the UK will face a host of problems, such as voltage and thermal excursions and power quality issues on their networks. Traditional reinforcement methods will be expensive for DNOs, so they are considering innovative solutions that provide multiple benefits; this is where Energy Storage Systems (ESS) could play a role to provide multiple technical and economic benefits across the grid from voltage and power flow management to upgrade deferral of network assets. This is due to the multifunctional nature of ESS allowing it to act as generation, transmission, demand or demand response based on requirements at any specific time based on the requirements of the stakeholder involved with the asset. ESS is technically capable of providing benefits to DNOs and other stakeholders on the electricity grid but the business case is not proven. Unless multiple benefits are aggregated, investment in ESS is challenging as they have a substantial capital cost and some components will require more frequent replacement than traditional network assets which typically last between 20 – 40+ years. As a result there is a reluctance to include them in future distribution network planning arrangements. IV Furthermore, the electricity regulatory and market design, which was set up in the time of traditional centralised generation and networks, limits investment in ESS by regulated bodies such as DNOs. The regulations and market structures also affects revenue streams and the resulting business case for ESS. This thesis investigates the feasibility of ESS in distribution networks by first studying the effect of current electricity regulatory and market practices on ESS deployment, investigating how ESS can be used under the present rules, and establishing whether there are limitations that can be reduced or removed. Secondly, short and medium term planning is carried out on model Medium Voltage distribution networks (6.6 kV) provided by the IEEE and Electricity North West Limited to establish the technical and financial viability of investing in ESS over conventional reinforcement methods by:  Assessing the impact of the proliferation of LCTs in distribution networks using both deterministic and stochastic methods under different scenarios based on current developments and government policies in the UK. This stochastic evaluation considers both spatial and temporal aspects of LCTs in distribution networks with datasets obtained from real distribution network customers;  Developing and applying ESS voltage and power flow management, and market control algorithms to resolve distribution network issues resulting from growing LCTs and allowing ESS to participate in the electricity spot market over a planning period up to the year 2030;  Providing a framework for assessing the business case of ESS under a DNO or third-party ownership structure where technical and commercial benefits from network asset upgrade deferral, energy arbitrage, balancing market and ancillary services (frequency response and short term operating reserves), distribution and transmission system use of system benefits are evaluated; V  Optimising the operation of ESS considering multiple technical and commercial objectives to establish the technical benefits and revenues that can be obtained from an ESS deployment and the trade-off of benefits that applies for differing ownership types. The simulation results show that, under the scenarios investigated, ESS can be used as a technical solution for DNOs. They show that the ESS capital costs can be offset by aggregating benefits from both technical and commercial applications in distribution networks if regulatory and market changes are made. The conclusions offer a perspective to DNOs and third parties’ considering investing in ESS on the electricity grid as it evolves towards a more active, decarbonised system.