Flexibility ForTheDoers Blog

Batteries and hydrogen – balance boosters of the energy system

Per-Oscar Hedman  ·  03 May 2021

The fight against climate change calls for quick decarbonisation. At the same time, the need for energy keeps growing as fossil fuels will be replaced with electricity-powered solutions across industries. How do we ensure that there is enough sustainable, affordable energy to meet the needs of tomorrow’s society? Part of that answer lies in adding more flexibility solutions to the energy system.

A balanced, efficient energy system consists of several different energy sources (e.g., wind, solar, nuclear, hydro & gas) with different properties that complement each other. Security of supply calls for steady production with a planned output, complemented with weather-dependent renewables and solutions for balancing supply and demand when necessary. All three types of production are needed to provide cost-efficient energy that covers the needs of the end users.

In the Nordic countries, the basis consists mainly of nuclear and hydropower. Fast-growing wind and solar power provide the variable element of the system, and hydropower is used to balance changes in production and demand. The district heating systems producing both heat and power provide seasonal flexibility in especially Sweden and Finland.

Energy storage is one way of increasing the flexibility of the energy system. As the production of weather-dependent energy – wind and solar – fluctuates, stored energy can be used to cover demand peaks. And when demand is low, but production volumes are high, the energy produced by these intermittent renewables can be stored for later use.

Hydropower provides excellent electricity storage possibilities, as water reservoirs can store energy for a long time and in large quantities. Hydropower can react quite quickly to changes in electricity demand and it is used extensively in the Nordic countries for this balancing purpose, making it possible to use large amounts of wind and solar while keeping the system fossil-free.

Batteries to the rescue in demand peaks

Hydropower can be supported with batteries to reduce the response time significantly. Batteries can be combined with hydropower to produce a balancing solution that can respond very quickly and provide sufficient capacity at a commercially viable cost. Fortum is piloting such projects in Sweden, at Landafors and Forshuvud hydropower plants, and so far, the solutions have shown great results.

Connecting battery-based storage solutions to the energy grid is also used to handle demand peaks and possible grid capacity restraints. There is already a grid-connected storage solution in place in Finland. Such solutions are particularly suited to fast-growing suburban areas, where the need for extra capacity may increase too quickly for the local grid’s capacity. Using stored energy while upgrading the grid ensures that there is enough power to meet end consumers’ needs also during peak hours.

Batteries are still an expensive way of storing electricity, although the price continues to drop. However, to function as a large-scale, stand-alone solution, their capacity needs to be significantly increased and the costs further reduced. Development in the field is fast and new innovations are continuously developed.

Existing resources and future vistas

Existing data centres’ UPS (uninterrupted power supply) systems can be applied to balance demand peaks in the grid. Their main function is to handle short outages, but most of the time, they are merely there waiting for the need to materialise. Data centres can sell their capacity on the frequency market. It can be bought, for example, a day in advance to cover a few hours’ anticipated increase in energy use. This is a good way to tap into an existing resource.

In the upcoming decades, hydrogen is expected to play an increasingly important part in the energy system, also as a storage method. Currently, the energy loss in the process of producing and storing hydrogen, then reverting it back into electricity again is too large for commercially viable use. Storage solutions that utilise the higher price volatility connected to increased wind and solar in the energy system are part of the solution to decrease productions costs of hydrogen for industrial applications. The electrolysis process will also be made more efficient through technology development and production on an industrial scale.

End goal: carbon-neutral energy systems

Solutions that can provide increased flexibility go hand in hand both with increasing shares of wind and solar and improved energy efficiency. However, it is good to bear in mind that security of supply becomes even more important in the era of electrification. Here, plannable production plays an important part, not only because of the amount of energy it provides, but also for the needed effect and ancillary services essential for an electrical grid to physically function.

In Sweden and France, hydro and nuclear serve in this role, whereas Norway has its hydro and Iceland runs on hydro and geothermal energy. These countries’ power systems have been essentially carbon-neutral for decades already, while many other European countries still rely on gas or coal to provide both flexible and plannable production. Hence, it is almost impossible to overestimate the significance of hydrogen as the driver of the European energy transition.

Per-Oscar Hedman

Communications Manager Sweden
per-oscar.hedman@fortum.com