Update From The Field April 2017:
the South Australian resiliency issue: an insight on the future of power grids

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Executive Summary

Two energy storage markets hit the headlines in March 2017:

 With a volume of more than 70 MW of large-scale energy storage announced in Germany, the most populated European country shows that it remains a key market for energy storage, despite the decreasing prices in the primary reserve auction (which remains the main source of revenues for MW-scale storage).

 However, the bulk of the discussions came from Australia, and especially South Australia, not only because the Lyon group made a 100 MW / 400 MWh project public, but also because energy storage has been recognized at the state level as a method to resolve the recurring blackouts in this state. What really made these discussions a worldwide buzz is one tweet from a well-known figure of the energy storage industry. In order to clarify what really is at stake in South Australia, our focus of the month provides all the necessary details to understand the future role of energy storage in this region based on the recent evolutions of the electric power system.

Last but not least, other energy storage initiatives, less commented but not less interesting, have been observed around the world during the month of March. For example: the results of a massive RFP for R&D projects pertaining to energy storage have been disclosed in Brazil, the French TSO communicated on its plan to install and own batteries to deal with grid congestions, and Ofgem, the British regulator, is currently reviewing the mechanisms behind the “embedded benefits” (such as “Triad avoidance”), that may constitute as of today a large share of the revenues of an energy storage project installed in the UK. Such revision could drastically change the way storage will be developed in Great Britain once the new regulation comes into force.

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Table of Contents
Executive Summary 2
Table of figures 4
New regulations and initiatives discussed this month 5
Americas 5
Incentives for residential storage have difficulties for approval by the Hawaii state senate 5
The state of Massachusetts opens a R&D program dedicated to energy storage projects 5
In Brazil, the national regulator selected 23 R&D projects focusing on the development of energy storage 6
Europe 8
The French TSO introduces a plan to build, own and operate batteries to avoid grid congestions 8
The French regulator disagrees with the subsidy the government wants to offer to residential consumers willing to self-consume their PV generation. 9
The British “embedded benefits” are being reviewed to ensure fair competition between large-scale generation units and distributed generation 9
The German states are active in financing storage projects and technologies 11
Asia / Oceania 12
Australia becomes the new hotspot for energy storage 12
Projects updates and announcements 12
Overview of the 2017 market for utility-scale projects: Australia and Germany will host large amounts of additional storage capacity according to this month’s announcements 12
Projects commissioned this month 13
Projects announced this month 14
Focus of the month – the South Australian resiliency issue: an insight on the future of power grids 16
The South Australian electric power system and recently faced issues 17
An increasing reliance on wind generation 17
A small grid highly depending on the neighboring state of Victoria 18
Timeline of events that led to the procurement of 100 MW of storage in South Australia 19
Overview of the chain of events 19
Detailed timeline 20
The role of storage in the resolution plan unveiled by the state of South Australia, and comparison with other geographies 23

Table of figures

Figure 1: List of projects proposed to the Brazilian RFP for R&D on storage and decision of the ANEEL 7
Figure 2: Planned operation of RTE’s battery installation to deal with grid congestions 8
Figure 3: Possible localization of small embedded generators in Great Britain 10
Figure 4: Evolution of the available embedded benefits depending on the geography and connection (front of the meter or behind the meter) 11
Figure 5: Overview of the storage volume commissioned and announced for 2017 to date 13
Figure 6: Evolution of prices on the European primary reserve common auction since the beginning of 2017 16
Figure 7: Evolution of the installed capacity of the different power sources in South Australia 17
Figure 8: Map of the South Australian transmission grid 18
Figure 9: Overview of the chain of events that impacted the South Australian electrical system over the past two years 19