Through the marketing of the provision of industrial capacity Electricity storage for the Control energy clever operators can achieve not inconsiderable Additional income can be generated. The fact that the use of large-scale batteries can cut operational load peaks (Peak Shaving), by Load shifting can lead to atypical grid usage or optimize the use of your own PV electricity. All of this reduces energy costs overall. The first two options significantly reduce grid charges and the combination with PV systems can also minimize expensive grid consumption.
However, real additional income can also be generated by marketing the free storage volume of larger electricity storage systems. The ability to absorb or release electricity quickly is a key factor on the Electricity market to the Stabilization of the network and this flexibility is highly rewarded.
Balancing energy to compensate for fluctuations in the public grid
Control energy, also known as Balancing energy or Standard benefitrefers to the ability to balance the power supply in an electricity grid in real time in order to keep supply and demand in balance. In electricity grids, power generation must be constantly adapted to current demand, as fluctuations in consumption patterns and unforeseen events such as the sudden failure of a power plant can occur. Any major deviations affect the grid frequency, which must be kept at 50 Hertz by the transmission system operators (TSOs).
Especially with the increasing use of volatile renewable energies, an imbalance occurs more frequently that sometimes has to be compensated for in a matter of seconds. A forward-looking 24-hour timetable for the use of conventional power plants is already being driven by the Dispatch or redispatch procedure created. The regional grid operators, transmission system operators and power plant operators already take into account all calculable factors, such as consumption patterns, consumption forecasts and weather conditions for the following day. Overall, this already absorbs most of the volatility of renewable energies.
The control energy for a hourly compensation between supply and demand is usually ensured by the respective balancing group manager, such as the power plant operator or energy trader. If the electricity frequency in the grid does not stabilize within 60 minutes, the person causing the fluctuation assumes responsibility and no longer the transmission system operator. The latter must then compensate for the undersupply or oversupply, which is known as Hourly reserve is designated. The polluter can achieve this by adjusting its own power plants or by buying or selling electricity.
Battery or electricity storage for short-term balancing energy
The flexibility of battery or electricity storage systems is required to compensate for extremely short-term grid fluctuations. A distinction is made here between primary control, secondary and minute reserve:
Primary control energy or primary control power (PRL): This reacts at the latest within 30 seconds to changes in electricity demand or unexpected interruptions in electricity generation. It is usually provided by fast and automated measures, such as adjusting the output of generators or activating energy storage systems. This balancing energy must be available for at least 15 minutes and is remunerated at a power price. Battery storage systems are usually used to regulate energy or the speed of power plant generators is adjusted.
Secondary control energy or secondary reserve (SRL)This serves to compensate for somewhat longer-term fluctuations in electricity demand or generation. It must be used within five minutes be operational and also maintain the agreed performance for 15 minutes. It is remunerated according to output and energy prices. This includes measures such as the ramp-up of reserve and bio power plants, pumped storage, gas turbines and battery storage.
Tertiary or minute reserve (TRL & MRL): This is used to compensate for longer imbalances between supply and demand. It starts after 7.5 minutes at the latest and should last for up to one hour. It is also remunerated according to output and energy prices. Typical measures here are the ramping up of additional power plants or the adjustment of consumers' production plans.
Conditions for electricity storage systems to participate in the balancing energy market
The use of electricity storage systems is therefore particularly attractive for primary control and as a secondary reserve. In general, electricity storage operators can their capacities from 1 MW on the Standard labor market (RAM) as long as their system is certified for this purpose by the Federal Network Agency and they can only offer capacity in one zone and one time slot. The systems must be fully remotely controllable or switch on fully automatically. It must always be taken into account that the energy balance can be positive and negative - in other words, the storage systems should be able to absorb surplus electricity or release electricity in the event of bottlenecks. The minimum requirements for participation in primary control are therefore as follows:
- Power: at least 1 MW
- Free capacity: at least 0.25 MWh (= 1 MW x ¼ hour)
A battery for primary control power must have at least 0.25 MWh free capacity and 0.25 MWh energy content and would then always be half charged in standby mode. In practice, these values must be multiplied by a factor of approx. 1.2. As soon as the capacities are called up, it must be able to either supply 1 MW for 15 minutes or absorb 1 MW for 15 minutes. However, the TSOs in Germany do not access the purchased and standby capacities on an hourly or daily basis. The batteries used for regulation in Germany only achieved an average of 0.3 full cycles per day, meaning that stand-alone batteries generally have surplus capacity that can be used for electricity trading.
The Secondary reserve is determined and put out to tender on a weekly basis by the four German TSOs in a dimensioning process. It is published in the Balancing power market (RLM) traded according to the bid price procedure for positive or negative reserves and there has been a minimum bid size of 1 MW since mid-2018. Here too, operators or marketers must conclude a framework agreement with the TSOs in advance and have their system certified.
How does trading with balancing energy work?
If the criteria are met, operators or marketers of electricity storage systems can participate in the online auctions on the balancing energy market or the balancing power market. All types of balancing energy are put out to tender daily and listed on regelleistung.net published. The four TSOs organize both marketplaces in Germany and run them according to the merit order and pay-as-bid principle. The RAM takes place daily and the RLM weekly. The auctions generally differentiate between negative and positive balancing energy and the RLM auctions also differentiate between power and energy prices and between peak and off-peak times.
How high are the yields from electricity storage systems in balancing energy?
The level of remuneration for electricity storage in the Primary control power fluctuates from day to day and week to week. The average power price in Germany in 2022 was around EUR 3,800 and in 2023 around EUR 2,200 per MW per week. Peak values of up to EUR 10,000 were recorded at the beginning of the war in Ukraine. Theoretically, marketers and operators of electricity storage systems can currently calculate with a remuneration of EUR 2,000 per MW and week. This results in an annual income of around 100,000 euros per MW of battery capacity and is a not inconsiderable contribution to the profitability of electricity storage operations.
The demand for control energy on the RAM for primary control power has risen steadily since 2018 and at the beginning of 2024 was almost twice as high as the demand for Secondary control power on the RLM. On average, the power price (positive + negative) was remunerated at around EUR 2,150 per MW per week in 2022 and around EUR 2,560 per MW per week in 2023. As a distinction is made in secondary balancing auctions between the capacity and energy price and between positive and negative balancing energy, there are also major price differences in the type of service. However, as batteries are able to absorb or release balancing energy, the differences hardly play a role.
When is it worth using an electricity storage system for balancing energy?
In practice, it is clear that the use of batteries today from an output of 2.5 MW for the provision of balancing power can make a good contribution to profitability. This battery capacity makes it possible to store large amounts of energy quickly and release it again when required in order to keep the power grid stable. For the operators of such batteries, this offers a extremely interesting source of income. By integrating their batteries into the balancing energy market, they can benefit from the rising prices for balancing energy and at the same time make their investments in battery technology profitable.
Grid stability & future development of balancing energy
In Central Europe and the EU, the frequency deviations are only slight compared to other regions of the world. The Grid stability is very high despite the rapid expansion of renewable energies. It remains to be seen whether this high standard will be maintained in Germany if the expansion of volatile renewable energy sources continues to accelerate. In any case, the factors that influence prices on the balancing energy markets are diverse and in some cases unpredictable. These include global economic developments, energy policy decisions, energy crises, the speed of grid expansion and renewable energy sources, price effects from the further expansion of battery and other electricity storage systems, technological advances, etc.
Experts expect batteries with smaller capacities to disappear from the balancing energy market in the future, as more and more commercial operators with large electricity storage systems will focus purely on electricity trading for balancing energy. However, this does not mean that smaller stand-alone batteries will become less important. On the contrary: they will become increasingly necessary for companies to cap peak loads, optimize their own PV power supply or for load shifting.
Conclusion
In summary, it can be said that the use of batteries with a capacity of 2.5 MW or more for the provision of balancing power definitely contributes to overall profitability. Marketing these capacities offers clever operators the opportunity to generate considerable additional income. In addition to the familiar benefits such as peak shaving, load shifting and the optimization of PV electricity use, integration into the balancing energy market opens up new sources of income.
The flexibility of batteries to react quickly to fluctuations in the grid is in high demand and is remunerated accordingly. This trend is also reflected in the increasing demand for balancing energy, particularly in the area of primary control and secondary reserve. The returns for operators of electricity storage systems can be considerable and contribute significantly to profitability.
However, it should be noted that the future of the balancing energy market depends on various factors, including global economic developments, energy policy decisions and technological advances. Despite these uncertainties, the use of batteries for balancing energy remains a promising and lucrative business area for the future.