'Batteries to bypass the capacity shortage on the power grid'

Couldn't we have foreseen the capacity problems on the power grid?
Tjeertes: 'We certainly saw the growing demand coming. Only: grid operators cannot anticipate it. Under current legislation, grid operators are only allowed to expand grids when it is physically clear that electricity demand in an area is increasing. To give an example: the development of a business park has often been known for five to 10 years. The grid operators, however, are not allowed to start investing until the roads are in place and the business premises are almost ready. That is totally belated. It takes years to expand the grid.'

How close to capacity is the power grid now?
Fahrenkrog: "It operates further from its capacity than people think. Our power grid approaches the limit of its capacity maybe 5 percent of the time. These incidents are widely reported. It of course is a problem  the power grid should never reach capacity. At the same time, we must put it into perspective; approaching capacity is manageable and can be solved. In addition, in the Netherlands we are used to a very stable grid. We expect grid operators to guarantee 100 percent security.'
Tjeertes: 'The grid capacity is fully subscribed, but all that capacity is not actually being used. It is not always running close to capacity. Grid operators calculate the total power the grid must be able to manage. The grid has to be able to deliver the full power demand for all connections at the same time.'
De Vries: 'Even though the grid is full only a fraction of the time, grid managers in some regions are now not issuing new connections to companies. That is disastrous. Several international companies which had plans to establish themselves in the Netherlands dropped out because they did not get an electricity connection. As we cannot wait for the networks to be expanded, new policies are needed to increase the accessibility of the electricity grid. A kind of road pricing on the electricity grid.'

In what ways could battery storage be a solution?
Fahrenkrog: ’Batteries are very suitable for energy storage at times when there is high supply. Conversely, they can supply power when limited renewable energy is available. This is important if in the future we are completely dependent on renewable energy. At the moment gas and coal plants still keep volatility manageable, but we as a society want to terminate those as soon as possible. GIGA Storage's mission is to help make that possible. We now have a 25 MW battery that can store 35,000 megawatt hours of power annually. That is equivalent to the annual energy consumption of about 9,000 households. There are plans for a battery of more than 100 MW. With our large-scale batteries, we can store and deliver power locally. We are also helping to keep the high-voltage grid in balance.’
Tjeertes: 'There are many situations in which battery storage is possible. Not only as a temporary, but also as a permanent solution. Grid expansion is often taken for granted; the reasoning being that it would be cheaper because the cables are already in place. But the question is whether that is in fact the case and whether we want to be limited to it.'
De Vries: 'The smart and automated control of supply and demand, or energy flexibility, will become the new normal. This is important not only to prevent over-demand on the grid, but also to use energy precisely when it is available sustainably and at a low cost. Many companies can already play with their electricity demand. In households, this is on the rise. Batteries are a way to buffer energy to better match supply and demand.'

What does the ideal electricity grid of the future look like?
Tjeertes: "We are currently still too attached to the idea that the power grid must be able to supply our complete demand. In other words, that all users must be able to utilize electricity simultaneously. The starting point should be that the grid supplies connected users with energy and that supply and demand are coordinated. That way the grid can handle much more.'
De Vries: "I like the comparison with our water supply network. Every household has a cistern for the toilet. This fills up slowly after each flush; the water system does not deliver a shot of water every time the toilet is flushed at full power. The water system would have needed enormously huge pipes. Our power grid will also have to have a similar design. We will have to set up buffers - with batteries, for example. Whether that has to be done per district or region or at each company and household, we still have to explore and it can also turn out to be customized.'
Fahrenkrog: "There are two layers to balancing the future grid. With the help of battery storage and smart control, producers and users can solve over-demand locally. Large-scale batteries can prevent reaching capacity on the high-voltage grid.'

What are the current obstacles?
Fahrenkrog: 'Due to laws and regulations, it is currently still difficult to get large-scale battery storage off the ground. It is still expensive because of transportation costs. That will change. Until then, we use smart algorithms to keep transport costs as low as possible.'
Tjeertes: 'We have to start seeing batteries as part of the energy infrastructure without taking this technology away from private companies. Grid operators will have to accept new players who will help ensure that the power grid can cope with increasing electrification. This is difficult for grid operators - after all, they are relinquishing part of the control. At the same time, we in the Netherlands are already familiar with the imbalance market facilitated by TenneT. With this, private parties are already ensuring that the high-voltage grid remains in balance. We dared to do that. Private players can similarly keep the grid in balance with battery storage.’
De Vries: ‘Grid managers find the idea of relinquishing control exciting. Often it is also  not allowed under current laws and regulations. But it will eventually have to happen; we have to be more creative and smarter about energy flows. That is why we keep stressing the opportunities which innovation offers.'

What gains can be made with smart energy solutions?
Tjeertes: 'First, users can play with their energy demand. A company with electric trucks does not necessarily need to have them charged in half an hour. If they are at a depot all night, the energy demand can be spread out. As long as the batteries are full when the driver gets to work. Second, solar and wind power generation can be temporarily turned off. That sounds undesirable, but it is quite infrequently necessary to keep the grid accessible and it is commercially disadvantageous to invest in storage for this purpose alone. As a third option, you can store excess electricity in batteries or convert it to hydrogen. We need to smartly combine these three solutions. In the example of electrified trucks, the entrepreneur could generate his own energy with solar panels. The time he charges his fleet can be tailored to the amount of electricity generated. If that fails or the entrepreneur wants more security, he can use a battery for additional buffer capacity. Like a cistern, if you will. For many businesses, this is still difficult: how much security do you have? A number of industries already achieved some success. For example, cold stores often opt for smart and automated energy use. Fruit and vegetables do not necessarily need to be cooled at a constant temperature. You can chill to -20 degrees when energy is at low cost, while allowing a somewhat higher temperature during peak tariff hours.'

Will there continue to be a central network, or will local networks emerge?
Fahrenkrog: 'More and more private grids are emerging, so-called closed distribution systems. They always have a connection to the central grid, but form mini-islands because they provide their own energy. Our batteries are also connected to such a local grid. There will be more and more local grids because high demand often occurs on local level. Balancing energy demand better locally, leads to fewer problems at the central level.'

What changes are needed in laws and regulations?
Tjeertes: 'Many. The most obvious problem is the energy tax that customers with batteries have to pay. The current energy and electricity law does not yet recognize batteries as part of the electricity grid. At the moment, a tax is levied when a battery is charged.. When this energy is fed back into the grid, the next user is taxed as well. This double tax is holding up a lot of business. Battery storage is quite expensive for businesses.'
Fahrenkrog: 'Many changes are still needed, but much has already changed. My experience is that the ball started rolling.'
De Vries: 'Many large users who now knock on the door for a connection don't get one because in their region the grid is full. But it is our observation that the grid is not always at capacity. Ideally, companies would get a connection for those moments when the demand is less. The market itself is open to that. Network operators and industry associations now think about new forms of contracts that would make this possible.'

What safety regulations are in place for battery storage?
Tjeertes: 'Hardly any regulations exist yet. The government only goes about setting standards once a particular product has proven itself to some extent. Until three years ago, hardly anyone was working on batteries. There was no urgency. This led to absurd situations. For example, we supplied GreenBatteries at events to provide electricity onstage; they replaced the anything but clean diesel generators. It has happened that, at the direction of the fire department, fire extinguishers and oil absorbers had to be placed next to the GreenBatteries as they were treated similar to diesel generators. Farcical, as a battery has absolutely no oil.'
De Vries: "In my experience, developers are from the outset cognizant of the safety of their system. But can we simply leave this to the developers? It is high time there were safety regulations. If there is agreement on what standards different types of batteries have to meet, the market can embrace innovative technologies better and faster.'
Tjeertes: 'I hope that providers and users of batteries will not be weighed down with rules and regulations. But we will sort out the regulatory framework as we become more knowledgeable.'

Companies have high sustainability ambitions. How do they realize increasing electrification if they are prohibited from connection to the grid?
Fahrenkrog: 'Many companies are currently showing interest in battery storage to achieve their sustainability ambitions. With an own battery, they have an energy buffer and can provide for their growing electricity demand themselves. Even so, they need to be connected to the grid, but we manage that creatively by placing our battery behind the existing meter.'

How can the Netherlands accelerate battery storage?
Fahrenkrog: 'That is largely up to the politicians. Politicians can ensure that innovations become part of our future energy system. Companies can also send a message to politicians and policymakers. They could accept a planned and temporary unavailability of capacity on the grid. By doing so, they encourage grid operators and regulators to think creatively.’
Tjeertes: 'For many companies, it's not a big deal if the grid is not 100 percent reliable, it's annoying when capacity is more limited, but with some adaptability they can live with it. For the companies that do have to rely fully on the power supply, a battery as a back up would be a solution.'
De Vries: 'Technically, a great deal is already possible. The batteries are there, we know how to control them intelligently. The main thing now is to work out frameworks and devise price incentives. Above all, let us be entrepreneurial. We do not have to put forward the perfect solution right away. It can also be done step by step. We can make agreements with each other and adjust them later if they do not lead to the right result. We achieve more in this way than first talking and discussing for years about a perfect solution which outcome we cannot predict in advance.'

This article is published in Management Scope 02 2023.