Exploring the realm of software is of utmost importance, particularly within the context of storage systems. It is anticipated that the value of these systems will shift from mere hardware to encompass the software that governs and enhances the overall functionality, presenting an opportunity to attract a wider customer base and achieve greater profitability. It is important for BESS players to cultivate these abilities at an early stage.
The battery management system (BMS) is frequently mistaken for the EMS. The BMS is a straightforward system that serves two purposes: 1) enabling or disabling battery operation and 2) ensuring the safety of the batteries. When initiating a BESS, the EMS will instruct the BMS to activate the batteries (establish the DC bus). The BMS will execute this command only if it detects a safe condition. During operation, if the BMS detects parameters that are exceeding their acceptable range, it will prompt the EMS to decrease power output (in cases where parameters breach fault thresholds, the BMS will activate the opening of rack contactors).
Anticipated advancements in utility-scale Battery Energy Storage Systems (BESS), which presently represent the majority of new capacity each year, are projected to witness a rapid growth rate of approximately 29 percent annually until the end of this decade. This trajectory positions utility-scale BESS as the fastest-growing segment among the three. Projections indicate that by 2030, annual utility-scale BESS installations could range from 450 to 620 gigawatt-hours (GWh), potentially securing up to a 90 percent market share of the total industry during that period (Exhibit 2).
To gain a comprehensive understanding of the potential advantages that come with BESS, it is ideal to divide the market based on user applications and sizes. Within BESS, there are three distinct segments: front-of-the-meter and BTM residential installations, typically ranging below 30 kWh (as shown in Exhibit 1).
The financial strategies for utility-scale Battery Energy Storage Systems (BESS) are greatly influenced by the unique characteristics of the regions in which providers establish themselves. Typically, players in this sector opt for a revenue stacking approach, which involves aggregating incomes from multiple sources. They may engage in supplementary offerings, arbitrage, and capacity auctions. For instance, numerous BESS installations in the United Kingdom presently focus on ancillary services like frequency regulation. In Italy, there are talented players who have achieved success by emerging victorious in one of the country's capacity auctions that prioritize renewable energy. On the other hand, in Germany, the focus is more on evading expensive grid enhancements in order to seize opportunities. The successful players in the FTM utility sector have recognized the importance of tailoring their approach to individual countries and their regulations, rather than relying on a singular, all-encompassing strategy.
From a technological standpoint, the primary factors that customers prioritize when it comes to batteries are cycle life and cost-effectiveness. Presently, lithium-ion batteries are prevailing because they fulfill customer requirements. In the past, the dominant choice for battery chemistry was a nickel manganese cobalt cathode. However, lithium iron phosphate (LFP) has emerged as a more cost-effective alternative, surpassing it in popularity. (Customers of lithium iron phosphate are willing to acknowledge that LFP may have certain limitations compared to nickel batteries, particularly in terms of energy density.) Nevertheless, the scarcity of lithium has led to the exploration of various intriguing and promising battery technologies, with a particular focus on cell-based options like sodium-ion (Na-ion), sodium-sulfur (Na-S), metal-air, and flow batteries.
Battery Energy Storage Systems (BESS) retain energy during periods of excess generation or low demand and subsequently release it during periods of reduced generation or high demand. Similar to any energy source within a solar PV facility, the operation of BESS necessitates constant monitoring and management. This is accomplished through three different systems.
The Chief Executive Officer of FlexGen, a provider specialized in controlling energy storage software solutions, explains the definition and necessity of upgrading or retrofitting an energy management system (EMS) in operational battery energy storage system (BESS) projects.
The third division comprises public infrastructure, commercial establishments, and industrial facilities. Within this category, energy storage systems will primarily be deployed to assist with load management during peak periods, facilitate the integration of on-site renewable energy sources, optimize self-consumption, serve as a backup power source, and support grid-related services. It is our belief that BESS holds the capacity to decrease energy expenses in these regions by a staggering 80 percent. The case for implementing BESS is particularly compelling in countries like Germany, North America, and the United Kingdom, where demand charges are frequently imposed.
Considering the multitude of customer segments, varying business models, and imminent changes in technology, this question holds significant importance. Here are four strategies that could potentially lead to success in the market:
In conclusion, a percentage ranging from 10 to 20 is linked to sales entities, project development organizations, as well as other endeavors focused on acquiring customers and commissioning (Exhibit 4).
The main clientele for FTM installations consists of utilities, grid operators, and renewable developers who seek to address the sporadic nature of renewables, offer grid stability services, or avoid expensive investments in their grid. Typically, the BESS providers in this sector are either vertically integrated battery manufacturers or prominent system integrators. They will set themselves apart based on factors such as price and scope, dependability, their history of successfully managing projects, and their aptitude for creating energy management systems and software solutions for grid optimization and trading.
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Promote the development of robustness within supply chains. Numerous essential components of BESS (from battery cells to semiconductors in inverters and control systems) depend on intricate supply chains that are vulnerable to disruptions arising from various factors such as scarcities of raw materials and modifications in regulations. When establishing a supply chain strategy, it is important to take into account various factors such as strategic partnerships, multi-sourcing, and local sourcing. Additionally, planning for potential technological changes should not be overlooked. In addition to addressing BESS components, those operating in the industry also face challenges when it comes to engineering, procurement, and construction (EPC) capability and capacity, especially for front-of-the-meter applications. To achieve smooth execution of BESS projects, it is imperative to establish strategic collaborations with prominent EPC companies that have the capacity for large-scale BESS installations.
Additionally, there are the tasks related to system integration, encompassing the comprehensive planning and creation of energy management systems and additional software to enhance the adaptability and utility of BESS. We anticipate these integrators to capture an additional 25 to 30 percent of the profit allocation accessible.
The advancements in technology are driving the growth of the market for battery energy storage systems (BESS). Battery storage plays a crucial role in supporting the generation of renewable energy, facilitating alternative sources to consistently contribute to global energy requirements despite the inherently unpredictable nature of these sources. As battery prices decrease, the versatility offered by BESS (Battery Energy Storage System) will become crucial in various areas such as peak load management, optimizing self-consumption, and providing backup power during power disruptions. These applications are progressively gaining profitability.
In order to monitor battery readings, the SCADA system generally establishes direct communication with the BMS. Additionally, there may be a need or advantage for the SCADA system to communicate with DC-DC converters, inverters, and auxiliary meters in order to effectively manage the BMS.
In response to economic and operational challenges, there is a prevailing tendency within the industry to enhance or modify the EMS. Making the decision to retrofit the EMS carries significant weight, hence it is vital to meticulously plan the sequence of retrofitting actions. Approximately 20% of the deal flow that FlexGen handles consists of retrofits.
BESS EMS, when contrasted with solar SCADA, presents considerably greater complexity. Several owners have come to realize this through personal experiences that were challenging. The EMS assumes a significant level of accountability in relation to its cost, particularly for projects exceeding 100 MWh in size. In such cases, there are two cost metrics that are taken into consideration.
Critical readings that are transmitted from the batteries/stacks comprise state of charge (SOC), electrical current, voltage, temperature, as well as the quantity of interconnected stacks and alarm indicators. In the case of battery issues such as excessive heat or failure to charge adequately, the SCADA system has the capability to notify plant operators through an alarm displayed on the human-machine interface (HMI).
The BMS encompasses the HMI, which denotes the operational state of the BMS (such as charging, discharging, or idle), desired levels of real and reactive power, limits for state of charge (SOC), alarm information, and input from control parameters.
FlexGen's battery storage solutions stand out due to their advanced HybridOS software, flexible hardware integration, and the ability to provide scalable, reliable, and efficient energy storage for a wide range of applications.
FlexGen's HybridOS is an advanced energy management software designed to optimize the performance and efficiency of battery energy storage systems. It integrates seamlessly with renewable energy sources, providing intelligent control, real-time monitoring, and predictive analytics to enhance energy storage and distribution.
Yes, FlexGen specializes in integrating renewable energy sources like solar and wind with their energy storage solutions. Their HybridOS software is specifically designed to manage and optimize the storage of renewable energy, ensuring a stable and efficient power supply.