Problem statement:

What are possible business models to encourage investment in flexibility and how do they fit in the whole picture of market design and regulatory framework?

Objective:

  • To understand business and revenue models for supporting battery energy storage system (BESS)

Achievement:

  • Study of energy storage business models in detail with emphasis on ownership type, technology, and market options served
  • Three business model canvases were defined for high potential lively combination of large-scale storage applications, supporting directly three demonstrations of demo 1, 2 and 7.
  • Extensive analysis of business case for hybridizing gas and storage to support primary reserves, optimizing gas resources, and improving battery life 
  • Extensive analysis of market design for flexibility, open up new revenue streams to increase liquidity of services for TSO to procure and maintain security of supply, but also increase the attractiveness to invest in creating flexibility projects.
  • Proposed market design options and additional or adjustable settings for intraday wholesale market in the SEE

Flexibility value chain

Flexibility value chain

Vision for an enhanced market design

  • Our vision for the enhanced marketplace is something that provides additional functionalities to the existing marketplaces at least cost and effort
  • Enhanced platform – an improved intraday market for flexibility where multiple TSO and DSO markets are integrated in a single digital platform, instead of on multiple platforms
  • The market participant offers their ‘residual flexibility’ to multiple markets via the platform, improving liquidity across all markets that access the platform
  • The market participant can also offer their residual flexibility to other market participants, helping them to resolve issues that are preventing them from completing their own tasks
  • The market operator only needs to qualify once for the marketplace - this pre-qualification will ensure that he has qualified to provide services to all market domains that are active in the flexibility market
  • The market acts as an integrator of other marketplaces. Individual markets remain as separate entities, but have access, via API or common interface, to the liquidity provided by the integrated marketplace.

Flexibility Market Application

  • Portfolio Optimization - wherein market participants (DERs, Aggregators, BRPs, etc.) will be trading flexibility across various market platforms to maximize their revenues at least cost risk
  • Congestion Management – wherein system operators use flexibility to optimize network capital investments
  • Balancing Services - wherein system operators use flexibility for power system stability

Balancing Services

Balancing Services

Business Models for FLEXITRANSTORE

Business Models for FLEXITRANSTORE-1 Business Models for FLEXITRANSTORE-2

Business Model 1 – Conventional + Storage

  • Plant integrated BESS in this case could provide the ability to operate the plant closer to base load and additional flexibility services including frequency response capacity (both online and offline), faster frequency response, black start capacity, improved ramp rates and load shifting.
  • Can cater IDM but also extremely capable to address balancing and ancillary markets

Business Model 1 – Conventional + Storage

Business model 2 – “hybrid RES in flexibility markets”

  • A storage business model that supports FIT regression, solves RES integration at source (network benefit)
  • RES+storage ideally positioned to participate in emerging flexibility markets
  • Emerging initiatives (NODES, PICLO, others) create opportunities for cross-project collaboration

Business model 2 – “hybrid RES in flexibility markets”

Business model 3 – “the storage enabled utility”

  • A storage business model that reduces need for long term trades and increases utility confidence in short term trading
  • A model combining schedule optimisation with direct or indirect revenues from services

Business model 3 – “the storage enabled utility”