Already one of Latin America’s top markets for renewables, Chile leads the region on energy storage — and in embracing concepts that could break new ground in a global context.
Chile’s installed base of 64 megawatts and 79 megawatt-hours of storage (based on figures from BloombergNEF) is puny compared to the U.S. or China, for instance. But the country is already grappling with issues more commonly seen in much larger markets.
Chile has a long, narrow geographical footprint — the country extends 2,653 miles from north to south, but is only 217 miles wide at its broadest point. As a result, most of its renewable resources are located far from areas of high electricity demand. This heightens the need for the buffer of energy storage to support weak interconnections across the country’s southern, central and northern grids.
At the same time, the country’s ambitious decarbonization plans, which include axing 65 percent of coal generation from its energy mix by 2025, have accelerated demand for the kind of long-duration storage assets that are only just beginning to emerge in more advanced markets.
One of the country’s more eye-catching proposals is to convert coal plants to massive Carnot batteries, a type of thermal storage. This plan would see coal generation being replaced with molten salt thermal storage as the power source for steam turbines.
The concept has been in development since 2018, when Chilean consultancy Inodú carried out a study for German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on new uses for Chile’s relatively young coal power plant fleet.
GIZ and the German Aerospace Center (Deutsches Zentrum für Luft- und Raumfahrt) have calculated that Chilean coal plant operators Engie and AES Gener could provide Carnot-battery-based energy at a cost of between $80 and $100 per megawatt-hour. That’s flirting with cost-effective pricing against the primary shorter-duration energy storage from lithium-ion batteries.
Dependent on payments for inertia
These costs are still more expensive than coal-fired power, at between $63 and $76 per megawatt-hour, or natural-gas-fired generation, at between $65 to $91, but are still low enough to “open possibilities and private-sector interest in starting tests on the ground,” local media has reported.
Vicente Javier Giorgio, chief operating officer for AES’ South American operations, which include AES Gener, said the only thing missing is a regulatory framework to reward Carnot batteries not only for energy storage but also for providing grid inertia — a key grid-balancing feature of spinning generators like coal- and gas-fired power plants.
“We want to take advantage of the coal plants we have, some of which are new, and carry on using the steam turbines, generating the steam from molten salt heated by renewable energy,” he said in an interview. “But that requires a lot of investment.”
To convert a 250-megawatt coal plant to molten salt would cost around $200 million, he said. “There needs to be an auction for assets that can provide inertia,” he said. “If I get a contract for 20 years of inertia, then I can pay off the investment.”
Developing energy storage since 2007
AES Gener is no stranger to working with Chilean regulators on the evolution of the country’s energy storage market. The company was the first to introduce lithium-ion battery storage into the country, scoping the market in 2007 and installing an initial 12 megawatts of 20-minute utility-scale battery capacity at its Norgener coal plant in northern Chile in 2009.
The battery system, provided by now-defunct vendor A123, replaced 7 megawatts of coal-fired thermal capacity that AES Gener had been obliged to set aside for primary frequency control.
This allowed AES Gener to sell the thermal capacity on Chile’s energy markets instead, at a rate of around $100 per megawatt-hour.
AES Gener repeated this trick at two other northern Chile coal plants, installing 20 megawatts of 20-minute battery capacity at the 554-megawatt Electrica Angamos plant in 2012 and a similar volume at the 531-megawatt Cochrane Power Station in 2016.
Using storage to extend hydro capacity
Still working with lithium-ion battery storage, AES Gener last year introduced a new concept to the Chilean market. Its $14 million “virtual reservoir” pilot project provided 10 megawatts with 5 hours of storage and was installed behind the meter at the company’s Alfalfal hydro plant southeast of Santiago.
The battery storage system allows AES Gener to artificially extend the 178-megawatt capacity of the hydro project, improving the profitability of the plant.
Based on the success of the pilot, AES Gener is looking to expand the Alfalfal virtual reservoir up to 40 megawatts and is pondering an installation of up to 200 megawatts of battery storage at its new Alto Maipo hydro plant, 30 miles from Santiago.
“This is a world first,” said Giorgio.
AES Gener’s projects to date make up around 97 percent of all the battery capacity in Chile, and the company is continuing to ramp up installations.
More lithium-ion projects on the way
Alongside upcoming virtual reservoir projects, AES Gener this year plans to complete the installation 112 megawatts of 5-hour storage at its 180-megawatt Andes Solar II B PV plant in Antofagasta. It will be the biggest battery project in Latin America, Giorgio said.
This will be followed by another solar-plus-storage project, Andes Solar IV, where 237 megawatts of PV will be tied to a 148-megawatt, 5-hour battery system.
Chilean regulators have been working to accommodate this growing energy storage market with the introduction of four remuneration schemes over the last decade.
The first scheme, for stand-alone battery systems, allows asset owners to carry out energy arbitrage and sell ancillary services. A second, for energy storage integrated with renewable energy plants, also rewards power capacity.
Third, the Chilean independent system operator or Coordinador Eléctrico Nacional can procure ancillary services from energy storage.
Energy storage for grid strengthening
And finally, Chile’s energy regulator (Comisión Nacional de Energía or CNE) can pay for energy storage assets to support grid infrastructure. This last market is being targeted by Hydrostor, a Canadian compressed-air energy storage player.
But the regulation is still very much work in progress, according to Jon Norman, Hydrostor’s president.
“We were first attracted to the market about four years ago, when the regulator said, ‘We need 500 megawatts of 13-hour storage,’” Norman said in an interview. “That’s right in our bailiwick. We’ve been working our way through the regulated process since.”
Source link : https://www.canarymedia.com/articles/energy-storage/latin-americas-energy-storage-leader-is-getting-creative
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Publish date : 2021-07-21 03:00:00
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