Battery storage as a strategic element for municipal utilities
Many municipal utilities are facing major challenges in a changing energy market. The energy transition requires the expansion of renewable energies, the integration of decentralised and fluctuating generators and consumers, the digitalisation of grids and the creation of flexibility options. At the same time, competitive pressure is increasing due to new market participants, falling margins in traditional business areas and high investment costs.
In recent years, the electricity market has also become increasingly volatile due to the expansion of renewable energies. This leads to extreme price fluctuations and presents municipal utilities with new challenges. One solution to this problem could be battery storage systems. But are batteries really the new power plants for municipal utilities?
Focus on flexibility and cost-effectiveness
Batteries have the potential to play an important role for municipal utilities, especially when it comes to shifting the supply of energy volumes and managing peak loads. In contrast to conventional large-scale power plants, which are often not flexible enough to react quickly to changes in the power grid, batteries can store and release energy quickly to stabilise the power grid. Another advantage of batteries is that they are able to utilise price fluctuations. When electricity prices fall, batteries can store energy at a low price and sell it later when prices rise again due to a stronger demand for electricity. This can help to increase the profitability of municipal utilities and offer end customers an attractive dynamic electricity tariff while stabilising and relieving the grid at the same time.
Another opportunity for municipal utilities to benefit from batteries is the mandatory introduction of dynamic electricity tariffs from 2025 for electricity suppliers with more than 100,000 customers. These tariffs and their price components will vary depending on supply and demand on the electricity market. This gives end customers an incentive to adjust their consumption to the market situation and to consume energy when it is cheap due to an oversupply. This can lead to better utilisation of the existing grid infrastructure and reduce the need for expensive grid expansions. Dynamic electricity tariffs could also increase the acceptance of electromobility and smart home appliances, which offer additional flexibility options. For municipal utilities, offering flexible tariffs can also result in greater customer loyalty as customers engage more intensively with the topic of energy and their consumption behaviour.
Expanding battery storage or making demand more flexible?
Municipal utilities are faced with one question when it comes to investing in new battery storage systems: who is faster – the expansion of battery storage systems or the flexibilization of demand? Batteries have an advantage here, as they are in competition with the flexibilization of demand. The industry is still being encouraged by the 7000-hour rule to consume as evenly as possible and not to run into power peaks. This means that battery investors will have a good and profitable time over the next few years.
Intelligent marketing can replace a power plant
The design of a battery depends on the application. Factors such as capacity, performance and number of cycles play a role. Intelligent allocation between different markets, such as the balancing energy market and the wholesale market, can lead to a significant increase in the value of a battery and thus to energy cost optimisation for municipal utilities. The question is therefore no longer either balancing energy marketing or marketing on the intraday market, but an intelligent combination of both forms of marketing leads to the highest possible yields.
This is where ESFORIN can act as an experienced and independent partner for municipal utilities, offering an innovative Cross-market marketing concept for battery storage systems ESFORIN has been active on the short-term trading markets since 2015 and therefore has a wealth of experience that it applies to the marketing of batteries today. -Through the continuous and dynamic optimisation of battery storage in various markets, including intraday trading, ESFORIN can use the volatility of the electricity market as an opportunity and maximise the return on battery storage for municipal utilities. ESFORIN takes into account the individual framework conditions and restrictions of municipal utilities and offers transparent and fair billing.
To summarise, it can be said that batteries have the potential to play an important role for municipal utilities. They offer flexibility, can take advantage of price fluctuations and help to stabilise the electricity grid. With their enormous flexibility, battery storage systems can help to further green the electricity mix and orientate it towards renewable generation, thereby contributing to a green and secure energy system!
