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Replacing Black Start Diesel Generators with Energy Storage Systems

The grid has to be prepared for the extreme case of a complete blackout. This, however,is complicated by the fact that most power plants require a lot of time and energy to preparefor operation: for example it can take up to an entire day to get a big coal fired plant to

maximal output from a cold state, and it can not be done without considerable energyinvestment. It is crucial then to have power plants that are able to start quickly andindependently of grid power. The ability of independent startup is called black start capability,and because of the extra investment it requires, usually only a few plants have this capabilityin a national grid. Black start plants are traditionally gas turbine plants, since they can bestarted in about 15-20 minutes, or even faster in emergencies. The way a gas turbine plantnormally starts is that the attached generator or separate starter motor is energized from thegrid, it cranks up the turbine that then gradually starts to supply power as the pressure andthe heat builds up. Without grid power, the required electricity comes from a standalonediesel generator set, which is in turn started from a small battery - similarly as a big truckengine. By regulation, the generator set must have enough fuel for at least three black start

, and the plant itself for a few days of continuous operation.1Normally these fast ramping plants are only used a few hours each year, in times of

other plants’ outages or extreme high loads, since they are a lot less economical than baseload plants. Even in these rare times, the plant is started using grid power, the black startdiesel generator (BSDG) is often never used in its entire lifetime, apart from drills andmaintenance runs. It could be economical then to replace it with a battery pack with thenecessary performance and capacity to supply the three black start attempts, and otherwiseuse it to provide other auxiliary services to the grid.

This paper assesses the feasibility of different battery energy storage systems that wouldprovide black start capability as well as frequency containment reserve. A model is built tofind the ideal capacity and the costs associated with providing the different services.

The black start process

Black start is the process of bootstrapping a power plant into operation without relying onoutside electricity, with the intention of restoring grid power after a system wide blackout.The smartest way to black start the entire grid is to fire up a few fast-ramping power plantsfirst, use their power to start other fast-ramping plants without black start capability, startslower-ramping base load plants and gradually restore service. Very often hydroelectricplants would provide this capability, since they can be put into operation very quickly andwithout major energy investment. In countries without adequate hydropower, such asHungary, this is carried out by gas turbine power plants with black start diesel generators.Usually the process is as follows:

1. A small battery starts a BSDG located in a gas turbine plant

2. The BDSG’s power starts the gas turbine

3. A transmission line towards other non-capable plants is energized

4. A base plant is brought into operation using the grid power

5. The base plant’s power is then used to restart all other power plants in the system

6. Power is reapplied to the distribution network and sent to the consumers - gradually

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It is important not to restore service everywhere at the same time, because the suddenhuge load could trip the power grid again. In larger grids, the procedure usually involvesreapplying service to multiple independent islands first, and then synchronizing them.

There are three gas turbine power plants in Hungary that provide reserve capacity andare also key in black starting the national grid: Dunamenti, Göny!i, and L"rinci power plants.

Black Start Diesel Generators

The diesel generator sets used as black start generators tend to be in the 2.5 to 5 MWrange , depending on the type and quantity of gas turbines it has to be able to start. These2

units, usually called gensets for short, are generally compact systems built into a shippingcontainer, and are used for a wide variety of applications, as backup generators forhospitals, data centers, mobile prime power sources for mines, small islands, etc. Onecontainer would include the diesel engine (usually a large displacement 8 or 16 cylinder unitin this performance range ), a transmission, the generator, control units, and fuel3

management system. Turnkey solutions are available from multiple manufacturers, and itcan be considered a mature, reliable technology. Such as: MTU 0080-4000 DS, GE 16V250.

Energy Storage Systems

Technically there seems to be no reason why BSDGs could not be replaced with batterypacks - even though there is little precedent of such installations in Europe. The goal of this4

paper is to assess the economic feasibility of such a solution with respect to all thealternative applications the battery based solution would allow. The energy storage system(ESS) would have to have enough charge left at all times to provide the necessary powercontinuously for the duration of at least three black start attempts. It may be reasonable to

build extra capacity to obtain the capability of providing ancillary services to the grid, such aspeak shaving, fast regulation, etc. or defer upgrading transmission and distribution (T&D)equipment.

The minimum criteria and the operational environment of the system to be designed:

• Highly reliable - at least as much as the diesel genset.

• Has the required output power to bootstrap the gas turbine.

• Has the necessary capacity to power three start attempts any time.

• No vibrations, protection from punctures and other mechanical damage.

• Well defined and narrow operational temperature range.

• Virtually unlimited space - dimensions and weight are irrelevant.

• Easy to reach location, availability of skilled personnel: regular maintenance andmonitoring is possible.

• Since there is a minimum charge level required for black start capability, the batterywould never be deep cycled, apart from drills and actual crises.

• For the same reason, roundtrip efficiency is also irrelevant. (Not for secondarypurposes though!)

• Low self discharge would be a relevant advantage.

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To sum up, the requirement is a high capacity battery for the lowest overall cost. Sincethe discharge rate would not exceed 1C, the power requirement is not restricting thechemistry, almost all solutions are capable of sustaining this rate.

Types of ESS

The cheapest of all systems is pumped energy storage: when energy is stored in waterreservoirs or as high pressure air pumped into caves - these however require specialenvironmental conditions. I will focus solely on solutions that can be deployed anywhere andcan be set up in containers on the power plant or substation premises.

The most conventional and wide spread battery technology is lead acid. Lead acidbatteries are relatively cheap, readily available, and there are many precedents of grid-scaleinstallations. The common drawbacks of the lead acid technology is that they require somemaintenance due to the escaping of hydrogen gas when the battery is overcharged, they

only work ideally in one set orientation, they are prone to spilling, and they degrade quickly ifdeep cycled. They are ideal as motor vehicle starter batteries, because in such anapplication they are rarely discharged below 80% SOC, and their large surge powercapabilities are needed. The nature of the discussed application eliminates most of thedrawbacks, therefore this chemistry is a good candidate for black start battery. When leadacid is used in frequency regulation for its high ramping capability, the storage system isoften limited to ~20% DOD to maximize battery lifetime. Since high temperatures candrastically reduce lifetime, it is important to provide adequate thermal management in thestorage containers. Lead acid batteries operated at partial state of charge also requirerefresh cycles to dissolve sulphate crystals that have accumulated on the negative electrodeand replenish the capacity of the battery. This would cause a downtime of a few hours every~10 days in grid support applications.5

Another common and increasingly popular type is lithium-ion. In high powerapplications, Li-ion is competitive when its advantages such as tiny memory effect, lowweight, and low self discharge are relevant. Therefore it is widely used with solar/windinstallations, for frequency regulation purposes, for peak shaving, and for back up powerwhere outages are frequent. The main drawback of the lithium based technologies are theirhigh price. It is important to note that lithium-ion is probably the most researched technology,and its production costs and capabilities are improving at a high pace, especially witheconomies of scale kicking in. There is already precedent for using Li-ion batteries for blackstart in Eisenhüttenstadt, Germany: a 2.8 MW, 720 kWh installation that can bootstrap a 153MW gas turbine into operation. Li-ion batteries are better suited for deep cycling, and ingeneral longer lasting than lead acid based solutions.

Nickel-Cadmium, a once popular chemistry for rechargeable AA batteries now bannedby the European Union is powering one of the world’s biggest batteries in Fairbanks, Alaska.The installation demonstrates reliability and has a power rating of 40MW, which it cansustain for about 7 minutes - the giant UPS is used as a backup for the too frequently failinggrid. A big advantage of Ni-Cd batteries is that they tolerate both high discharge rates (up to50C even, although ideal is below 15C) and deep cycling, making it ideal for short termbackup solutions, even if outages occur fairly often. It is however substantially moreexpensive than lead acid solutions of equal capacity, and its benefits are irrelevant, as in theblack start application the discharge rate would be around 1C, while deep discharge wouldbe extremely rare.

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Nickel-Metal Hydride is the technology that replaced Ni-Ca in the rechargeable AAbattery market, as it is more eco friendly and has higher energy density. It is also a popularchemistry for producing larger battery packs for electric or hybrid vehicles, being the chosentechnology of Toyota and Honda. Nowadays most purely electric vehicles use Li-ion despitethe safety concerns and higher price, because it has even higher specific energy. Ni-MH was

never popular for large stationary batteries due to low cycle life and irrelevant advantages - itis mentioned in this paper for the sake of completeness.

Turning away from chemical batteries, compressed air energy storage (CAES) is aninexpensive solution due to cheaply available tanks and compressors, whose main issue islow roundtrip efficiency. This however can be overcome with the latest technologies thatsprays water into the cylinder in the compressor and stores the resulting hot water. Theenergy density of such a storage is considerably lower, looking at LightSail Energy’s solutionfor example, it stores 750 kWh in 45 foot shipping containers. The storage units themselvesare however quite simple carbon fibre reinforced high pressure air tanks, cheaper and longerlasting compared to batteries. As of power output, each module is capable of 500 kW,therefore 5 units would be needed to supply the turbine startup procedure. These unitssupply 3 phase AC power that could be directly applicable to the gas turbine’s starter motor.Advantages of this type of EES is the virtually zero self-discharge, long service life (20+years for the compressors, even more for the storage tanks), and lack of hazardousmaterials. Disadvantage is the lack of commercial availability as of yet - the few existingCAES plants are in the tens or hundreds of MWh range, and use underground caverns orcaves versus LightSail’s aboveground portable solution. Many of these plants would use thestored compressed air to support power generation via natural gas turbines instead of simplyturning a generator trough an expander. This sort of use however is only economical withlarger amounts of compressed air stored in some natural cavity, therefore it does not applyto the case under investigation.

Cryogenic energy storage (CES) is another novel idea on the market, currently undertesting in the United Kingdom. It uses very low temperature liquids to store energy - usually

liquid air or nitrogen at temperatures around -200 C. They use the Claude cycle to cool airfrom the atmosphere to the point it liquifies, and then store it in a well insulated tank - onatmospheric pressure. The advantages are the long service life (30+ years), low capital cost,lack of hazardous materials, good scalability, and the major drawback is the low roundtripefficiency - unless some low grade heat source can be utilized to boil the liquid air. While thissolution is not yet available for purchase on the market, it may, in the future, be used forblack start energy storage capacity, because it can store large amounts of energy and haslow capital cost. CES is aimed at long term energy storage.

A readily available yet equally exciting solution is that of flow batteries. In flow batteries,the energy is stored in the electrolytes, which are in turn stored in separate containers andare never mixed, but brought into contact in the fuel cell that can reversibly convert chemical

to electrical energy. In these batteries the power is a function of the cell number and size,whereas the capacity is proportional to electrolyte volume - therefore these can be handledseparately, yielding huge flexibility for customization. The lifetime of flow batteries can bevery long, because there are no solid-to-solid phase transitions. Self discharge isnonexistent, because when the battery is not in operation, the fluids are not in contact. Flowbatteries also do not need equalization, a common problem in multi-cell battery installations.The drawbacks of the technology are largely irrelevant when one considers installation in apower plant: low energy density, need for pumps, control units, impossibility of scaling downto handheld. Flow batteries are normally used for large stationary applications, and areconsidered for electric vehicles since they can be quickly “recharged” by swapping the spentelectrolyte tanks for energized ones. The main drawback when considering it for a black

start application is that the fuel cells are expensive, therefore it is only economical forapplications where lower discharge rate is sufficient. In the given case, this could beachieved by finding secondary applications that would require higher capacity but not higher

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power. It would also incur serious additional capital costs, as it would require at least 4007kW fuel cells, over 500 kg and 1 m3 each, plus the storage tanks - it would have to behoused in a warehouse, not in a simple container array as a diesel generator set or a moreconventional battery pack.

UltraBatteries are a spinoff from valve regulated lead acid batteries, halfway between

conventional lead acid batteries and ultracapacitors. In practice this hybrid design meansreplacing half of the negative electrode (traditionally lead) with carbon, which would act asthe electrode of the capacitor. The positive electrode (lead oxide) is common, and exactlythe same as in a conventional lead acid battery.The advantages of UltraBatteries as compared to LA are longer lifetime, higher energyefficiency, and superior charge acceptance under partial SOC conditions, while productioncosts are comparable to conventional lead acid. In case of the black start capability plusauxiliary service provider application, these properties would be increasingly important themore the battery is oversized relative to the black start capacity requirement.UltraBatteries are used for frequency regulation in Lyon Station, Pennsylvania, and forrenewable-based microgrid stabilization on King Island, Australia.

Ecoult recommends 60% DOD for regular cycling and 90% DOD for emergencies. They aremost efficient and longest lasting if they are used in a partial state of charge, and alsorequire refresh cycles less often.6

Analyzing the demand - gas turbine startup

The main objective of the system to be designed is to support the gas turbine’s startermotor’s power needs. I analyzed the measurements of a start sequence from the 173 MWgas turbine power plant in L"rinci, Northern Hungary. The data includes the most importantvoltages, currents, powers, and turbine RPM for a two hour period with one secondresolution. The period includes a cold start of the gas turbine using the black start dieselgenerator and its subsequent shutdown. The data was exported using the SPPA-T3000control system of the power plant.

Since the BSDG’s bus showed some activity even before the genset’s breaker switchedon, I subtracted these initial values from all data points of genset current, power, and

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reactive power. The initial value may be explained by the auxiliary electricity consumed atthe plant. (16kW - 60 kvar, 1.45 A)

The key takeaways from analyzing the startup demand is that the power output of thediesel genset peaks at just below 2 MW, and that the total consumption of one startupattempt is around 170 kWh. Therefore the replacing ESS must have at least thrice that ascapacity and the same or higher as rated power. It is essential to also have a safety margin

on capacity in case of extended standby and also not to completely deplete the batterysystem, not to mention taking into account that the capacity will somewhat decrease overthe system’s lifespan due to aging. According to the data, there is a 16 kW base load, that ismost likely the standby consumption of the plant. In order to provide a 24 hour UPS serviceas well as cranking power for the gas turbine, that is additional 384 kWh.

Drafting the solution - black start only

If we ignore the potentially profitable auxiliary services, the ESS has to have a ratedpower of 2.5 MW and a capacity of 1 MWh. (Three times 170 kWh + 385 kWh with a 10%safety margin.) The major costs of building such a system are the following:

1. Battery

2. Inverter

3. Control system

4. Racking, containers for housing

5. Cables and infrastructure

The price of the inverter and the control system is the same for all battery chemistries,around $0.25/W altogether in such industrial applications. There are integrated solutions7

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available in units of 500 kW or even 2.5 MW . These would be turnkey solutions built into a8

smaller portable shipping container.

The cost of racking, housing, cables, and infrastructure depend on how compact thebattery is, that is determined by the energy density of the different chemistries. (Energydensity is energy per unit volume: a Wh/m3 value.) For a lead-acid battery, it is ~0.34 MJ/liter

(based on a car battery), which means, for the planned 1 MWh = 3600 MJ, 3600/0.34 = 10.6m3 is needed. The same for Li-ion is ~1.8 MJ/liter (based on the Panasonic 18650 cells), so3600/1.6 = 2 m3 would suffice. By comparison, the internal volume of a 20 foot ISO containeris 33.1 m3, that of a 40 foot one is 67.5 m3.

Of course when packing so many cells and modules, and volume in not expensive, itmakes sense to pack them less tightly so that excess heat is easier to remove and individualmodules are accessible for replacement. The takeaway from the rudimentary calculationsabove is that however much space in needed for lead-acid, Li-ion will likely suffice with onefifth.

Looking at some market solutions, Mitsubishi’s 2 MW, 0.8 MWh integrated Li-ion basedESS fits into three 40 foot containers for example, weighting ~22 tons each. (The maximum9

gross weight of an ISO container of any size is limited to 30.4 tons, which also limits tighterpacking.) Therefore 1.6 m3 of Li-ion batteries are packed into ~169 m3, assuming that theinverter takes half of a container.

Ecoult’s UltraBattery Storage Blocks use 20 foot containers for a capacity of 0.5 MWhand rated power of 250 kW each. These units do not include inverters, but do havecontrollers and integrated ventilation/temperature control. Therefore the required capacitywould take up 2 containers, and the power electronics a third one - similarly to the Li-iondesign. (However this design would not provide sufficiently high output power.) In this case,10.6 m3 of batteries are packed into 66 m3.10

http://www.solarpowerworldonline.com/2014/02/eaton-releases-2mw-2-25mw-energy-8

storage-solar-inverters/

https://www.mhi-global.com/products/detail/lithium_pro_sys_spec.html9

http://www.ecoult.com/technology/ubersystem-configuration/ 10

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Solar Power Smoothing and Energy Shifting w/ Ecoult’s 20foot, 500 MWh UltraBatteries in New Mexico, USA

https://www.mhi-global.com/products/detail/lithium_pro_sys_spec.htmlhttp://www.solarpowerworldonline.com/2014/02/eaton-releases-2mw-2-25mw-energy-storage-solar-inverters/http://www.ecoult.com/technology/ubersystem-configuration/


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It is important to note that while Lead-acid batteries have 1/5 1/6 the energy density of Li-ion, the specific energy is around 1/3, and weight is the critical factor when it comes todetermining the number of containers needed. Batteries of most chemistries are relativelyheavy: there is enough space left in a fully loaded container to have a multiple doors and acorridor for repairmen.

All in all, while the number of containers is a key determinant of infrastructure costs, itcan not be stated that the chemistry with the higher specific energy would be alwayssuperior - individual solutions must be evaluated, because the different manufacturers packvery differently.

Cost breakdown of battery energy storage system installations

Based on information from the numerous case studies available on similarly sizedprojects , the battery cells themselves are not the only major cost, they actually account for11

no more than 1/3 of the total project cost. There are two ways to look at BESS costs: onetime installation costs and lifetime costs. The final viability assessment is of course based onthe second one.

The figure is from a 3 MW / 750 kWh lead acid installation undertaken in Alaska in 2012to integrate additional wind power into an island system by providing frequency response.The breakdown details one time installation costs only. It is important to note that the

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advertised 750 kWh is the so called usable capacity: this system was designed with 20%DOD cycling in mind, therefore the actual installed capacity is ~3750 kWh. The totalinvestment cost of this BESS was $3 million, therefore according to the above costbreakdown one 500 MWh battery block cost around $150 000. The used technology in thisapplication was (now defunct) Xtreme Power’s Powercell, which is an advanced lead acid

chemistry, comparable to Ecoult’s UltraBattery.The running costs are relatively small for BESSs, but not negligible. For lead acid

batteries, the temperature must be kept in the ideal range to maximize lifetime, and aptventilation must be provided to avoid hydrogen buildup. The cells must be monitored andperiodically refilled with distilled water. Advanced lead acid chemistries avoid some of theseissues but still require refresh cycles. In case of a Li-ion based system, running costs maybe lower.

If the battery is regularly cycled, the roundtrip efficiency also drives costs. For examplewhen providing frequency response, the net load may be small, but the losses that occur onfluctuation discharge the battery, and the cost of charging is on the battery operator. Thedistribution of the regulatory signal can be very well approximated with a bell curve, and thus

the energy traffic can be estimated per unit power committed to regulation. The losses wouldbe proportional to the traffic.

Market research: the building blocks of BESSs

While it may look very nice on a pie diagram, many costs are impossible to divide inpractice. When one is designing a MW-scale BESS for a particular application, he is notshopping for battery cells, storing shelves, interconnecting cables, and fire suppressionsystems, but rather integrated solutions that pack all of these into modules. In our objectiveof finding the ideal BESS for black start plus some ancillary services, the building blocks arebattery modules of the 100 kWh range, power converters in the 100 kW range, the

interconnecting cables of these modules, and infrastructure for placing these modules. In the

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From Li-ion cells to

containerised batteries

Intensium Max - containerized solution

Rack of Synerion module

Synerion module

VL cell


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multiple MW range, the battery cells and the power converters are usually not integrated,and are available in separate container size solutions.

Unless one already has a suitable storage building on site, it is usually cheapest andeasiest to use container-integrated systems. Usually one can fit a 2 MW inverter into one 20foot container. For advanced lead acid batteries, the same container can fit about 500 kWh

(Ecoult), and in case of li-ion, 500-1000 kWh, depending on the cell type. Most of the time 20foot containers are used because of the weight limitations.

Inside, a container has many modules on racks. The example above is from Saft’sIntensium Max 20 product range, which is a Li-ion using MW range energy storage solution,housed in a 20 foot ISO container. The cells are organized into 24V modules that have atotal capacity of 1.5/2.1 kWh, depending on the cell type. These modules are the corebuilding blocks of the system. They are organized into strings, which are essentially modulesconnected in series. Then the strings are connected in parallel to make up the wholesystem. In an actual IM20 container, 29 modules are connected series in a string and 10strings are in parallel. There are monitoring and control systems per module, per string, andper container. As seen on the above picture, the container is far from filled, and provides

easy access for maintenance and replacement of the modules. AC/DC converters are notincluded. The weight of such a system is around 15 tonnes, depending on the types of cellsused. Total capacity is 420 to 1000 kWh per container.

In case of lead acid technology, Ecoult’s same size containers are capable of storing 500kWh, and their inner structure is very similar.

Apart from the local control systems, the containers are equipped with heating,ventilation, air conditioning (HVAC), fire suppression, and connectors to join them into agreater network. A container-based BESS does not need a lot of infrastructure: only a stableflat surface to put the containers, and a connection to the grid - this is why in most casesBESS installations are placed into existing substations. The container based design is key inkeeping shipping and assembly costs down. The control of the entire installation is usuallyintegrated into the inverter.

Therefore the actual cost breakdown would include the following well separable terms:1. Battery containers

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2. Control/power converter containers

3. Infrastructure for the container array: footing and interconnecting cables

4. Shipping, installation, commissioning

The third point will not be considered in this paper, because the power plant in mindalready has abundant suitable surfaces and the cost of interconnecting cables is negligible

compared to the whole cost. If I were to take the infrastructure cost into account, it would beproportional to the number of containers, just like the shipping, installation, commissioningcosts.

As of the fourth point, these depend mostly on the location. Looking at the case studyfrom Kodiak Island, Alaska these costs were around $55000 per container. Since theconsidered location in Hungary is connected to the road network and is actually just off of amajor highway, in the middle of Europe, this cost would be substantially lower: shipping of a20 foot container on land costs no more than $2 per km , and it may be assumed that the12

distance will be less than 1500 km. A crane will be needed for unloading, that costs around$700 a day, and will be able to place all the containers in one day. Commissioning the entiresystem will be a few day’s work for a small group on engineers, I assume $200 per

container. Therefore I estimate the total cost of shipping, installation, commissioning at ~ $3500 per container. This relatively low cost favors the less compact solutions.

The price of inverters in the MW range is around $0.25/W, therefore $625,000 may beestimated for 2.5 MW. This is independent of the selected chemistry. The inverter + controlsystem is expected to fit in one 20 foot container.

Finding the optimum

The goal of this paper is to decide whether replacing the diesel genset is economical andto select the ideal capacity and chemistry if it is. The first simplification is taking the genset

out of the problem: the optimal BESS will be found and it may be compared to the diesellater.

The aim is to optimize for returns: yearly profits over initial investment. The initialinvestment was detailed in the previous section: it becomes a function of installed capacityand chemistry trough the battery cost and the number of containers needed. For yearlyprofits, a yearly cost and revenue function must be developed.

The yearly cost function is the sum of amortization, energy bills (HVAC and efficiency-related), and maintenance costs. The revenue is a yearly flat fee for providing black startcapability plus the income from whatever surplus capacity that can be sold for frequencyregulation. Peak shaving was ignored as an application because with such high performancepower converter, it would require an enormous (100 MWh range) storage to operate

economically. As of 2016, peak shaving is an economical application in isolated grids, butnot on such an enormous, well interconnected grid as UCTE.

The profit function, with respect to Hungarian prices and regulations

The revenue from providing black start capability is a flat daily fee, RBS. The contract isawarded for one year of nonstop operation. In the last year in Hungary, three black start

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generators were chosen at fees ranging between 1.7 and 2 million HUF , that is a yearly13

revenue between 2.25 and 2.65 million US dollars each. In order to reliably provide the blackstart service and adhere to the standards, CBS = 1 MWh of capacity must always be ready todispatch to satisfy the requirement.

The revenue from frequency regulation is more complicated. The transmission system

operator (TSO) pays per committed MW, on an hourly (or 15 minute) basis, and this fee mayvary within the day - but it is decided in advance in the form of quarterly contracts. In thismodel, a flat hourly rate is supposed.

In case regulation is provided with an energy reservoir that limits the regulation providingcapacity, ENTSO-E’s Network Code on Load-Frequency Control and Reserves regulatesthat the primary regulation must be provided as long as the reservoir is not exhausted. Theplant “shall be able to fully activate its FCR continuously for a time period of not less than 30minutes and for an equivalent longer time period in case of Frequency Deviations smallerthan the FCR Full Activation Frequency Deviation and shall specify the limitations of theenergy reservoir in the Prequalification.” It is also required that in case of depletion theenergy reservoir must be recovered as soon as possible, and in no more than 2 hours.

Taking all this into account, the revenue:RFR = 24 * 365 * rate * min(P,(C-CBS)/ReqENTSO-E), where C is total capacity.

The amortization cost will be proportional to the traffic and will depend on what the DODwas as the power flown trough. Taking this second criteria into account is complex and isconsidered out of scope for now. The expected hourly traffic per MW committed may becalculated from the distribution on the regulation signal - this is discussed in detail later.

Expected lifetime = Cycle life * C / ( Traffic per MW * min(P,(C-CBS)/ReqENTSO-E) )

When calculating the amortization cost, the inverter and the rest of the installation mustbe depreciated at a different rate - while the lifetime of some batteries is just a few years, therest of the installation may long survive them. In my calculations I used 10 years for thelifetime of the non-battery part.

CAM = Battery cost / Expected lifetime + (Installation price - battery cost) / 10

The energy cost is a sum of multiple components: HVAC, self discharge, and efficiency-related waste. While of course HVAC is also a function of the battery roundtrip efficiency, it iscomplex - for simplicity I take a flat rate of CHVAC = $5000/year/container. The self dischargeof the batteries depend on the applied chemistry. In case of lead acid, this is about 5% permonth, so ~70 W of continuous load per 1 MWh of installed capacity, which costs about$0.01 per hour or ~$90 a year.

For maintenance, I used a flat rate of CMT = $1000 per container.

CEFF = (1 - $roundtrip)/2 * traffic * cost of energy

Profit per year = RBS + RFR - CAM - CHVAC - CEFF - CMT

This profit is then subject to 19% corporate tax in Hungary.

The Hungarian Ancillary Services Market

The Hungarian transmission system operator (TSO) MAVIR is procuring ancillaryservices by regularly publishing requests for proposals. The services are standardized tofacilitate the processing of the proposals and to enhance transparency. Any certifiedcompany may submit a proposal and the lowest offer in each category takes the deal.

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Black start services are contracted on a yearly basis, as well as voltage and reactivepower regulation. In case of primary, secondary and tertiary reserves, service providers haveto submit proposals each quarter. The companies may offer primary reserve in symmetric 1MW units, meaning that they must be able to regulate up or down as well. Secondary andtertiary regulation is each separated into up and down regulation, and may be contracted in5 MW units. 200 MW of secondary up, 100 MW of secondary down, and 500 MW of tertiaryup regulation is contracted - tertiary down regulation is not procured at all. In case ofsecondary and tertiary regulation, there is also an energy fee, but not so with primaryregulation.

While the details of the contracts are not public, information on the distribution and final

price of the individual procured services is available on MAVIR’s website.Based on the ENTSO-E Continental Europe Operation Handbook, Load-Frequency

Control and Performance chapter, Frequency Restoration Reserves (FRR or secondaryregulation) should have a few minute response time, maximized in 15, while ReplacementReserves (RR or tertiary regulation) are required to be online in 30 minutes of activationfrom the TSO. Therefore in these applications the main competitive advantage of batterybased energy storage - very fast ramping - is irrelevant, and they will not be considered inthis paper.

On the other hand, Frequency Containment Reserves (FCR or primary regulation) mustbe online in a matter of seconds: “the deployment time for 50 % or less of the totalPRIMARY CONTROL RESERVE is at most 15 seconds and from 50 % to 100 % the

maximum deployment time rises linearly to 30 seconds.” Pricing is matched to the tougherrequirements: while in Q2 2016 the FRR availability fees in Hungary rarely exceeded $30,the average hourly FCR availability fee was $140. Even this application is far from utilizing14

the ramping capabilities of a BESS, because it must be slowed down to mach that ofconventional spinning reserves: primary control within the entire synchronous area followsthe same deployment times to facilitate control.FCR is also more fitting to battery based solutions, because it is contracted in relativelysmaller, 1 MW units, and because “the minimum duration for the capability of delivery forprimary control is 15 minutes.” There is one unit operational in Schwerin, Germany, providingblack start capability and primary regulation with a 5 MW Li-ion backed BESS.

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The costs of providing Frequency Containment Reserve

The cost of the service will be a function of the amount of traffic related to the service:this will be proportional to the amortization of the batteries and the energy lost on roundtrip

efficiency. Committing 1 MW to primary regulation does not mean that it would be constantlyused, rather that it is the absolute maximum that the TSO can expect from the plant. Eachregulator has a so called K-factor that describes just how much power ought to bedispatched proportionally to the frequency deviation. For the entire ENTSO-E system, theFCE capacity is 3000 MW in both directions, and it is fully dispatched if the frequencydeviation exceeds 200 mHz. This means a K-factor of 15 000 MW/Hz, and therefore a factorof 5 MW/Hz for each individual MW committed. This is a bit further complicated by the 10mHz dead band around 50.0 Hz in which no control action is undertaken.

To estimate the traffic load from FCR, I analyzed some data. The measurements are15

from the second week of September, 2012, 1 mHz resolution, sampled every second - atotal of 604800 data points. As expected, the frequency has a 50 Hz mean normal

distribution, and the standard deviation as calculated from the data was 67.48 mHz. The linefrequency was in the dead band 38.6% of the time, so no FCR was dispatched at thosemoments.

Taking this dead band into account, the average active power flow magnitude on the busof the BESS would be just 72 kW per MW of FCR committed. The battery wear depends onthe actual SOC of the BESS and the C rate - therefore I used a simpler approximation toestimate this cost component. The battery wear cost is the amortization, which is installationcost over expected lifetime.

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It could be argued that the value of a lead acid battery that reached the end of life criteriais far from worthless - here I assume for simplicity that the recovered value would be spenton transportation and installation of the replacement battery.

Cycle life may be defined in many ways. The above equation suggests that I defined it asthe number of times one may deplete the battery from 100% to 0% and charge it back up

again before it reaching end of life, commonly defined at 80% of original capacity. This kindof operation is however very very different from the actual load it will face during FCR,therefore I used data from a research paper where the battery was cycled between 45% and55% SOC, and simply divided the so measured cycle life by 10 - thus ending up with 1500for advanced lead acid.16

As is is clearly visible on the distribution of the frequency above, the bell curve is slightlyskewed to the right as the average frequency of that period was actually 49.998 Hz.Accordingly, the FCR would have to up regulate more of the time than down, therefore netdepleting the battery. This effect is not negligible, the net consumption over the entire weekwould have been 1.34 MWh, a value comparable to the roundtrip inefficiency. It is actuallynot so interesting what the weekly consumption is - it is expected to average out to zero on

the long term, but it incurs costs none the less, as the battery should always be kept around50% SOC to provide regulation, therefore a 1.34 MWh change in momentary charge is notacceptable. Some algorithm must be developed that would start charging/discharging thebattery if its average SOC for the past few hours moved away from 50%.

The roundtrip efficiency depends greatly on just what that particular roundtrip looks like -in general, for lead acid, the lower the SOC, the better the charge acceptance, as long as itis above the deep discharge range. (10-15% SOC.) Therefore its efficiency for cyclingbetween 30 and 50% is much higher than if the same battery is cycled between 85 and100%. In the 50-65% range, 90% is achievable, including the losses on the inverter as well.The resulting cost is that of that wasted energy:

Conforming to the standards of FCR

As it was mentioned earlier, the standards set forth by ENTSO-E require that an FCRproviding plant with a limited energy reservoir be able to provide continuous regulation ineither direction at full activation frequency for 15 minutes. After one such disturbance, thereservoir must be restored as soon as possible, but in no more than 2 hours, and must beable to do the same again if the frequency deviates in such ways.

Therefore the BESS must have committed power times 0.25 hours of dispatchableenergy in it, and capacity to store that much more, at any time during normal operation. Inorder to calculate just how much capacity that requires, normal operation must be defined -obviously, if the system had to up regulate nonstop at full power for 10 minutes, it is notreasonable to expect that it will be able to up regulate 15 minutes more just because therewas a few minutes of time in between when no regulation was necessary.

Because the reservoir restoration time is also two hours, a reasonable definition is to saythat if the average line frequency was ~50 Hz in the last two hours, the operation is deemednormal and the plant is supposed to be able to regulate at least 15 minutes in each directionat full capacity. To quantify it, normal operation is when the average of the line frequencyover the last two hours was 50 Hz +- 2*Std.Dev. The standard deviation may be calculated

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from the deviation of the one second resolution frequency measurements by simply diving itby the square root of the number of seconds in two hours.

With this definition, 95.5% of the time operation will be deemed normal if the distributionof the momentary frequency is indeed normal. However, because of the dead band effect,the BESS will be in the optimal SOC range with a lot higher probability!

The range in which the SOC moves during normal operation must be added to 2 * 0.25 *committed power to get the capacity with which the standards may be met. This range maybe estimated using the above frequency boundaries: if the average frequency was 50.00159Hz over the last two hours and we neglect the dead band, 0.00159 * 5000 * 2 = 15.9 kWh ofenergy must be stored in the BESS per MW committed FCR. Therefore 532 kWh must backup 1 MW of regulation power.

Cost and revenue breakdowns

Having introduced the different cost and revenue components, below is a calculated costbreakdown a 3 MW, 3 MWh system, the optimal size for both chemistries:

The expected yearly revenue from operating black start service and frequencycontainment reserve:

Installation costs

Item LA Li-Ion

500 kWh advanced LA battery container x6 900 000 $US 1 500 000 $US

3 MW inverter (fits in two containers) 750 000 $US 750 000 $US

Shipping and commissioning 7 containers 28 000 $US 28 000 $US

Total 1 678 000 $US 2 278 000 $US

Yearly running costs

Item LA Li-Ion

Amortization of batteries 193 721 $US 95 977 $US

Inverter amortization 75 700 $US 75 700 $US

Self discharge 274 $US 274 $US

Dissipated energy due to inefficiency 14 198 $US 14 198 $US

HVAC 40 000 $US 40 000 $US

Maintenance 8 000 $US 8 000 $US

Total 331 892 $US 234 149 $US

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For advanced lead acid, the above detailed costs and revenues add up to a yearly profitof $5 749 671 before taxes, $4 657 234 after tax, a 278% margin. The same for Li-Ion isslightly higher profit but just a 208% margin as the initial investment in substantially higher.

Weak points and future research

Currently the weakest part of this paper is the reliability of prices assumed for batteryprices, which is key in assessing profitability. Manufacturers are not releasing the prices oftheir container sized products, and while there are a wide variety of levelized prices available

on the internet, they are either given for small (cell phone battery size, AA size, car batterysize) applications or for entire grid scale projects, including inverters, maintenance and/orother undisclosed costs.

A Tesla Powerwall retails at $3 000, is indeed nothing else but a big li-ion battery withsome controls, and has a capacity of 6.4 kWh. It is safe to assume then that the sametechnology scaled up to 500 kWh, with centralizedcontrol and one big container for housing inplace of the plastic/metal frame of the Powerwallwould not increase the levelized cost of $469,making the price of a 500 kWh container $234500. While I believe that the economies of scale

outweigh the additional costs of the 20 footcontainer (about $2 000) and HVAC, roundingup to $250 000 is a very safe estimate. Tesla’sutility scale Powerpack solution which comes in100 kWh units ready for outside installationcomes at an undisclosed price but analystspredict a $250/kWh levelized price target whichis exactly half of what I assumed.17

A 200 Ah (2.4 kWh) truck starter batteryretails around $200 , which would put the cost18

of a 500 kWh unit at ~$42 000. In this case

however the battery control system, insideconnections, and housing must be added,rounding it up to 50, maybe 60 thousand USdollars. In the calculations I used a price of $150000, which I acquired from an installation costbreakdown of a BESS plant. One reason for thedifference is that that was advanced lead acidversus the quoted truck battery which isconventional.

Item Revenue

Black start yearly standby fee 2 282 909 $US

Frequency regulation revenue 3 798 655 $US

Total 6

081

564

$US

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Running costs breakdown,advanced LA, 3MW, 3MWh

Amortization of batteriesInverter amortizationSelf dischargeDissipated energy due to inefficiencyHVACMaintenance

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There are also differences between two batteries of the same general chemistry asdifferent factories will produce slightly different qualities - therefore the cycle life data is alsoto be taken with a grain of salt. A much more accurate calculation would be possible with thismodel given accurate data - the gathering of which is one of the ways this paper is to bedeveloped.

It would also be interesting to consider adding photovoltaic generation to the plant tofurther exploit the capabilities of the inverter. Some PV capacity could be locally used tocover the losses of the BESS and a bigger installation could further increase the reliabilityand robustness of the black start capability.

Yet another way to go is mixing different technologies. Since in this application the BESSis kept at 60-70% SOC at all times except for emergencies, it may be wise to utilize somecheap-but-low-cycle-life technology for that 90% of the BESS that is rarely touched andactively cycle some more expensive but also more durable technology in the remaining 10%.Developing a model for optimizing such hybrid solutions would be a major work that couldyield interesting application-specific results. In order to make it more accurate, a moredetailed SOC-dependent battery wear model must also be implemented.

Gergely Marton

2016. 05. 16.

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bsdg vs. ess

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