Grid Integration of Energy Storage – Flexible Connection Agreements (FCAs), Grid Tariffs & Co
This year’s Elia Viewpoint Study:
STUDY LINK
Background
On behalf of Elia Group, FfE conducted an in-depth analysis of various instruments for the grid integration of energy storage systems. The instruments either incentivise grid-friendly operation or limit grid-straining effects of electricity storage through temporal and local grid signals. This work served as input for Elia’s annual viewpoint study. The focus of the study was on large-scale battery energy storage systems (BESS), a rapidly growing sector that poses a challenge to grid stability due to its volatile operating behaviour.
Methods
FfE compiled a long list of potential instruments for integrating BESS into the grid and sorted them into different categories. From this list, five instruments were assessed qualitatively in terms of efficiency, effectiveness, regulatory compatibility (Germany and Belgium), implementation complexity, and potential risks or trade-offs.
Two of the measures – dynamic grid tariffs and flexible connection agreements (FCAs) with capacity limitations – were further analysed quantitatively for the year 2024. Using FfE’s e-Flame model, their impact on redispatch needs in three German regions was evaluated at the transmission system operator (TSO) level, alongside their effects on storage operator revenues.
Results
The analysis revealed that BESS, when operated solely based on market signals (DA, IDA1, FCR), would in some hours have increased and in other hours decreased redispatch needs in 2024. Whether the storage facility reduces or increases redispatch overall depends on the specific local redispatch profile and price developments on the considered markets.
By applying targeted instruments, BESS can be integrated in a way that either avoids additional congestion (grid-neutral) or actively reduces the net need for redispatch (grid-positive). The quantitative evaluation showed that exposing the modelled BESS to FCAs with capacity limitations or dynamic grid tariffs could have reduced net redispatch volumes and costs in 2024 in three German regions. The impact on storage revenues varies depending on the instrument design and local redispatch demands. It is based on 2024 prices and is thus not a forecast of future revenue impacts.
The performance of these instruments is highly dependent on their specific configuration. Our qualitative analysis highlights the general trade-off between instruments that offer greater reliability for grid operators and their restriction on the market-oriented BESS operation. A balanced approach – combining multiple instruments – can help mitigate these trade-offs and align differing implementation timelines. Some instruments are ready for immediate application, while others require regulatory changes or significant implementation efforts.
Further Information
