Environmental and economic analysis of sector-coupling battery energy storage systems used for frequency containment reserve

Abstract

Battery energy storage systems (BESSs) are advocated as crucial elements for ensuring grid stability in times of increasing infeed of intermittent renewable energy sources (RES) and are therefore paving the way for more sustainable energy systems. Providing frequency containment reserve (FCR) is an attractive business model for capital intensive stationary BESSs, but the current German FCR regulative framework restricts the BESS usage for other applications as capacity shares have to be reserved (FCR energy capacity requirement). Hence, stationary BESSs operating at the FCR market are not fully utilised from an economic and environmental perspective. Linking BESSs with other sectors as potential sinks such as power-to-heat modules or electrolysers, enables unlimited energy infeed and is discussed as potential means to diminish this constraint. Whilst, a couple of studies investigated the economic advantages of such sector-coupling BESSs, their environmental consequences were hardly analysed so far. Based on the life cycle thinking approach, the environmental and economic impacts of FCR provision in Germany by standalone and sector-coupling BESSs (i.e. with power-to-heat unit or electrolyser) were studied in this work. The sector-coupling BESSs were considered regarding different FCR energy capacity requirements (E/P ratios). It was shown that the CAPEX for the sector-coupling unit were primarily critical for the economic performance of BESSs favouring power-to-heat over electrolysers and standalone BESSs. The results of the environmental life cycle assessment indicated to potential benefits due to the reduced battery capacities depending on the varied FCR energy capacity requirement. The environmental implications of the operational stage showed that electrolysers can increase the environmental impacts by up to 10 % due to higher conversion losses compared to power-to-heat units. Finally, it was concluded that future energy system and market designs should foster the implementation of sustainable sector-coupling solutions considering technology-specific economic and environmental characteristics.