Do you have solar panels and are you thinking about improving your system by installing a battery? Does your connection to the network not cover your specific needs and increasing the power represents an unaffordable cost? Are you looking for a way to avoid peak rates and make the most of when energy is cheaper? If you are asking yourself any of these questions, or are simply curious to understand the potential of batteries in residential buildings or individual homes, the content on this page will be useful to you.

The importance of residential energy storage

Energy storage is the great challenge facing our society in this second phase of the energy transition: In the first phase, technological advances have made energy generated from the sun's rays and wind more than competitive than other conventional energy sources. Now it is time to face the next phase, the great challenge is summarized in this question: How can we make this energy available whenever we need it?

The answer to this question has multiple facets: from the fact that a 100% renewable generation mix is neither realistic nor accessible, the role of nuclear energy, to the electrical interconnection between countries to balance energy flows... but there is no doubt that one piece Key to achieving maximum penetration of renewable energies in the market are energy storage systems (or ESS).

Domestic batteries are characterized by their low storage capacity (when compared to grid ESS) and their proximity to loads. For these reasons, it is expected that domestic batteries will be a key piece in the network of the future:

1. They promote the quality of the grid's electrical supply: Being close to loads, they have the potential to absorb variations in demand and distributed generation (solar panels on rooftops) in such a way that they minimize voltage variations upstream of the grid. e.g. transformation center.
2. Their low cost compared to centralized systems makes them more accessible to the general population due to their potential for integration into the network and capillarity in more isolated regions of the network, where the risk-reward relationship does not justify large investments by of network operators.
3. They improve the reliability of supply. This is especially important in those regions where, either because they are remote or because they are susceptible to breakdowns in adverse weather situations, the reliability of the supply does not meet the needs of users.

But beyond the advantages of residential batteries for the system as a whole, we should ask ourselves what the benefits are for those users who decide to make room for a battery in their home.

How to generate income thanks to the battery?

For the reasons mentioned above, distributed residential batteries are taking on an increasing role in the energy debate. To assess whether the investment in a battery is worth it, we must first identify all the sources of income that it can generate:

1. Improved reliability: The economic value of the improvement in reliability is defined by the probability of a network supply outage and the economic cost that the sudden absence of supply would entail. In any case, the peace of mind that comes from knowing that you have a guaranteed supply thanks to your battery cannot be paid for with money.
2. Make the most of your solar energy: When your solar panels generate more than you need, the excess energy is injected into the grid. The economic compensation received by the prosumer (the consumer who also generates electricity) is not equal to the price per kWh, since the cost of distributing this electricity to other users must be deducted. If we have a battery, we can take advantage of this energy without having to pay this penalty.
3. Hourly consumption rates work in your favor: Rates that are based on time zones in which electricity consumption is more expensive or cheaper are already known. The electricity marketers establish the prices in each section according to the market price of electricity and the expected electricity demand, but these rates are usually rather fixed. The trend, due to the progression of renewables in the energy mix and the increase in controllable loads (e.g. electric car, smart appliances) is that marketers begin to transfer to the consumer the added value of consuming electricity according to its price in each instant. Innovative marketers, such as Octopus, are already applying this type of approach.
4. Compensation for supporting the network: Red Eléctrica Española is responsible for the transportation of electricity, above 33kV, and therefore must anticipate the need with plenty of time to allow time to execute all the necessary steps, such as planning, design, expropriations, construction , etc. On the other hand, the distribution system operators (DSO) in each zone have an equivalent responsibility for medium voltage. In addition to facilitating the planning of investments in the network, batteries can also serve REEs and DSOs to maintain stability in the network (voltage and frequency) which is being compromised by the abundance of distributed generation, the electrical grid does not It was designed so that energy would flow from the points of consumption upwards.

Once we understand the possible sources of income that we can obtain thanks to a battery, we now have to ask ourselves how said income is translated into the particular conditions of each particular case. The characteristics that most influence the potential benefits with a battery are:

• Demand curve: This is the electrical demand in each time interval (hourly, or every half hour).
• Local generation equipment: The existence of solar panels in the same building is a determining factor for the economic viability of the battery. Electrical generators (also known as alternators) can also operate in conjunction with batteries to increase supply reliability or stabilize the grid.
• Location: This factor is decisive when determining the reliability of the network supply, since in remote locations the network does not usually have much resilience and the service is highly exposed to inclement weather. Furthermore, depending on the region in which we are located, we will have different market opportunities since the rates offered by the electricity marketers as well as the local DSO network support programs vary from one area to another. It is important to know the market to be able to model potential benefits.
• Loads that can be moved over time: In many cases there are loads that can be moved over time and therefore take advantage of cheaper hourly rates or participate in dynamic demand programs. The complexity lies in integrating these loads into a system that activates them automatically.

All these factors, and the actors involved in them, are crucial to determine the economic profitability of the battery near the loads. Furthermore, many of these aspects are changeable and could improve or worsen our forecasts. In any case, the trend in the energy sector indicates that it will play a key role. We will see more about this in future posts.

Conclusion

Batteries distributed or close to loads play a fundamental role in the energy landscape and therefore both the market and the main players in the sector encourage and will increasingly encourage their implementation by consumers. To determine its economic profitability, it is necessary to understand the income that it could generate given the consumer's circumstances and their opportunities.