The energy storage revolution: driving the transition to renewable sources in the electricity sector

Lack of definition regarding energy storage brings apprehension to the sector; Constant pressure by thermoelectric plants goes against published guidelines and global decarbonization.

Uncertainty regarding the implementation of energy storage connected to renewable sources has generated concern in the electricity sector. Investors and companies in the energy sector have requested the adoption of new technologies to guarantee a reserve of capacity that allows for more affordable tariffs and a reduction in greenhouse gas emissions. This scenario reflects the need to adapt the energy market to new environmental and technological guidelines.

With the uncertainty regarding the policies of energy storage, the pressure to build thermoelectric plants conflicts with the objectives of storage systems. The introduction of innovative energy storage solutions is seen as essential to achieving a more sustainable energy matrix. Effective implementation of these technologies it will be able to ensure both the stability of the electrical system and the fulfillment of established environmental goals.

Public consultation and energy storage

The Ministry of Mines and Energy (MME) published a text in the Public Consultation on the Capacity Reserve Auction. There is one constant pressure so that only thermoelectric plants are contracted for this auction, which contrasts with global trends in global decarbonization. This implies that Brazil would add more than 5 gigawatts of fossil power plants, operating until 2043, which is a controversial choice considering the country's commitment to reducing emissions by up to 53% by 2030 and achieving zero net emissions by 2050, according to Markus Vlasits, chairman of the Absae Board.

— ARTICLE CONTINUES BELOW —

Economic and environmental impacts

The sector is concerned about the impacts on tariffs, as the operation of thermoelectric plants already costs Brazilian consumers a fixed annual amount of R$3,56 billion. When these plants are activated, in addition to the fixed remuneration, they receive compensation for their CVU (unit variable cost), which can vary from R$600,00/MWh for natural gas thermoelectric plants contracted in 2021, up to R$3.225,00/MWh, depending on the dispatch modality and the fuel used, according to the Brazilian Association of Thermoelectric Generation (ABRAGET).

Cost and emissions of thermal plants

According to data from Rege Consultoria, the cost of minimum dispatch of 1GW for 8 hours varies from R$ 3,6 million (gas generation, simple cycle) to R$ 10 million (diesel oil), generating between 3 thousand and 6,5 thousand tons of CO2, contrasting with the almost zero CVU of storage systems (BESS), which can be charged with 100% renewable sources. The Energy Research Company (EPE) warns that the electrical system will need more than 30 GW of power between 2027 and 2031 to avoid risks in the supply at peak times.

Future Planning and Investments

Without the publication of the definitive decree, investors and companies in the electricity sector are questioning the best strategy for reserving capacity, focusing on long-term planning and not just on immediate demands. Vlasits clarifies that, even though they are reliable and adapt to the electrical system in scenarios of water scarcity, thermoelectric plants are inadequate to meet peak demands, which are short-lived and occur more frequently.

Importance of energy storage systems

In the last Public Consultation No. 160, 38% of the comments received referred to energy storage systems, with 98% in favor of their inclusion in the Capacity Reserve Auction. Currently, the expansion of generation is led by renewable sources such as solar photovoltaic and wind, whose share should reach 40% of installed capacity in 2031. Although these sources bring many advantages, such as competitiveness and contribution to affordable tariffs, their variability is a problem, since generation peaks do not coincide with consumption, which occurs mainly at night.

Storage challenges and solutions

The predictability of these renewable sources is not guaranteed, making them non-dispatchable. One solution is to use energy storage systems, such as batteries for four-hour dispatches, as suggested by the ONS and EPE. With falling prices, today turn-key batteries are sold for less than USD 200/kWh and are economically viable for capacity reservation, in addition to offering flexibility, as they do not depend on gas pipelines or other fuels, are modular and can be installed quickly.

Advantages of batteries and impacts on the market

Batteries charged with surplus energy in moments of maximum generation e minimum demand have CVU close to zero. If they are excluded in favor of thermoelectric plants, both the market and consumers will suffer losses, paying more for something that can be replaced by energy storage systems, allowing effective decarbonization at lower prices. In Brazil, there are already real cases, such as the project in Registro, São Paulo, where large storage systems can be implemented in less than two years.

Urgency in sector decisions

Vlasits concludes by emphasizing the need for quick decisions, given the risk of the auction not being held this year. He argues that, as a society, it is vital to continue to demand decisions aligned with the objectives of national energy policy. This includes protecting consumer interests in relation to price and quality, finding more appropriate supply solutions, using alternative sources and mitigating polluting gas emissions, as stipulated by Law 9.478/97.

Source: Manuela Ravioli

Be the first to react!

The energy storage revolution: Driving the transition to renewables in the electricity sector