BTM battery storage: Resilience trumps grid revenues?

Mardapittas: Resilience is what firms want

When it comes to behind the meter battery storage, a share of grid services or arbitrage revenues is almost irrelevant for some industrial and commercial firms, according to Alex Mardapittas CEO of Powerstar, a storage and UPS manufacturer.

Mardapittas says resilience underpins the storage business case and for certain companies can enable payback in less than 12 months. He cites a critical component manufacturer in the aerospace sector.

“They make bearings from special alloy blocks provided by Rolls Royce. If there is any voltage dip, even for less than a second, the machines stop. That means they have to bin the alloy block,” says Mardapittas.

“Now, it’s a lovely looking bin, but Rolls Royce charges them six figures per block destroyed – and last year they binned eight blocks.” Since installing its kit in April “we have saved them two events,” claims Mardapittas.

“So they don’t care about grid revenues. Yes, they avoid DUoS red bands and Triad in winter and are doing FFR. But they don’t really care about that. Resilience is what they want. So [from an end user perspective] storage should not be a device for revenues, but to protect the overall needs of the company and to integrate other forms of generation.”

Others agree.

Green: Business case cannot live on grid services alone

Spencer Green, optimisation manager at Breedon Cement’s Hope Works, was interviewed for The Energyst’s forthcoming demand-side response (DSR) report.

Green says the company has looked at battery storage “at a high level” but says any investment would hinge on threats to security of supply.

“The only way we could justify [a battery] is in terms of resilience. If we start to see a greater degree of grid instability and it starts to impact production, that argument may come into play.”

Should Breedon decide to buy a battery, the company would not overlook revenue opportunities, says Green, “but [grid services] would never make a business case on their own”.

SES Water was also interviewed for the report. The firm is considering battery storage but has concerns over predictability of revenue, according to energy and carbon manager, Henrietta Stock.

Stock: Resilience business case more clearcut

“We’ve had conversations with different companies that might be willing to provide and/or finance a battery and we have support internally, but it is still in the very early stages,” says Stock.

“Our sites sometimes experience network power quality issues, so we could build a business case around using batteries for resilience,” she explains.

“The battery technology and configuration is really important though, because there’s likely to be some kind of trade-off needed between using the battery for resilience and using it to maximise DSR revenues,” says Stock.

However, she adds, “The grid services business case is less clear”.

The Energyst will publish in depth interviews with industrial, commercial and public sector organisations about flexibility in its forthcoming storage and DSR reports, which will be launched at the DSR Event, 13th September, London, and at the Battery Storage Event, 30 October, London.

Related stories:

Revenue and regulatory risk remain key challenges for BTM battery storage

Public sector keen on DSR but fears disruption and lacks knowledge

I&C energy storage: firms banking on FFR are “gambling”

Free report: Battery Storage 2017 – A business case for battery storage

Free report: Demand Side Response 2017 – Shifting the balance of power

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