Grid-connected residential PV-battery energy storage system at Shanghai Jiao Tong University Green Energy Laboratory

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UNIVERSITÀ DI PISA

Scuola di Ingegneria

Dipartimento di Ingegneria dell'Energia,

dei Sistemi, del Territorio e delle Costruzioni (DESTEC)

Grid-connected residential PV-battery energy storage system

at Shanghai Jiao Tong University Green Energy Laboratory

Corso di Laurea Magistrale in Ingegneria Energetica

Relatore:

Prof. Umberto Desideri

Supervisor:

Prof. Wang Ruzhu

Candidato:

Valerio Bagalini

matricola 437085

anno accademico 2017-2018

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ABSTRACT

Growing distributed renewable energy share in electricity generation is creating challenges for the whole power system, due to its intermittent and non-programmable nature and to its level of penetration at medium and low voltages. Energy storage has the potential to solve those issues although its technical, economic and environmental impact is up for debate.

A residential PV-battery energy storage system (3kW monocrystalline PV panels and 2.5kW/14.4kWh usable capacity lead-carbon battery pack) is installed to a residential grid-connected small apartment in the Green Energy Laboratory at Shanghai Jiao Tong University, China. Daily experimental results show how the presence of energy storage reduces the midday feed-in of excess PV power and the evening peak demand providing benefits to the distribution network in terms of reduced voltage swings and peak load.

Experimental data from the real system is also used to validate a computational model built using TRNSYS software, from which annual energy flow simulations are run. For this specific domestic load, it is found that the presence of an optimally sized PV-battery system reduces the amount of energy sold to the grid by 57% and purchased from the grid by 42%, increasing self-consumption rate from 21% to 54% compared to having the same PV system but without storage.

Considering the Chinese context, an economic analysis is carried out to assess the profitability of residential PV-battery systems, using the Net Present Value as the economic indicator of an 18 years investment in which the battery pack is replaced twice (6 years life). The analysis shows that such system is not economically viable due to a combination of low electricity prices, valuable PV incentives and high technology costs. However, considering a future scenario of doubled electricity tariff, halved export tariff and falling technology costs (-66% battery & -17% PV and inverter), PV-battery investment becomes profitable and shows more resilience to future scenarios than PV-only investment.

Those results are obtained with basic operating strategy of maximizing PV energy self-consumption. Further works should focus on advanced strategies taking into account battery degradation, so as to increase battery life, and time of use tariff, so as to maximize economic benefits. Finally, policy makers have the ability to shape renewable energy and energy storage future by application of tailored electricity tariffs and incentives.

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ACKNOLEDGEMENTS

First of all I would like to express my gratefulness to Prof. Umberto Desideri of the University of Pisa for following me along this thesis’s journey, putting me in contact with SJTU and giving me the possibility to spend 10 months in Shanghai to produce this work and have an invaluable experience in the People’s Republic of China.

A big thank to Prof. Wang Ruzhu for welcoming me at SJTU and into his team, making me feel involved in the department activities, providing me with wise suggestions and approving some of my suggested project modifications.

However, I will never know if without the inspiration of Jacopo Bonechi, who went to SJTU two years before me making me very curious about Shanghai and the whole of China, I would have taken the decision to embark upon this fantastic journey. In any case, Jacopo helped me a lot before and during this experience so I must thank him a lot.

Then I would like to thank SJTU PhD student Mr Zhao Baiyang for having helped me in my initial stages in Shanghai and at the University’s Minhang Campus, on top of the continuous support throughout the whole work.

Also, it is important for me to mention the inspiring people met at SJTU who have added value to my experience and have also helped me with useful conversations and by being part of some of the experiments at the Sino-Italian Green Energy Lab (aka GEL): the POLIMI students Andrea Fumagalli, Stefano Zanzi, Matteo Pirovano, Niccolò Spotti, Giacomo Bonaccorsi and Salvatore Caruso; Norwegian colleagues from NTNU Edvard and Auden; Chinese good friend Huang Ling; and all other people from all over the world who somehow manage to enrich me.

Special Thanks to Eva Schito who volunteered to listen about my work and ended up following it with periodic reviews until its completion, which was extremely helpful.

I am also grateful to my SSE plc manager Mr David Mobsby for approving my 17-month sabbatical period which allowed me to graduate with plenty of time to spare.

Finally, thanks to my family for the support throughout all stages of my life, no matter where I have ended up. Thanks to Mum and Dad who also came to visit me in China for three weeks, and thanks to my Brother Andrea and my Sister Cinzia for their never ending support.

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LIST OF FIGURES

Figure 1: solar cell efficiency chart (NREL, 2018) ... 3

Figure 2: Electricity production in 2016 (Enerdata, 2017) ... 4

Figure 3: Power generation share by type in China (IEA, World Energy Outlook 2017: China, 2018) ... 5

Figure 4: Wind and Solar combined electricity production share progression in China (Enerdata, 2017) ... 6

Figure 5: Solar Radiation Maps; Global Horizontal Irradiation (GHI) - Mainland China - Europe ... 6

Figure 6: PV electricity production 2005-2015 (IEA, 2017) ... 7

Figure 7: PV data at the end of 2015 (IEA, 2017) ... 8

Figure 8: Classification of Energy Storage Systems (Hannana, 2017) ... 9

Figure 9: Application of energy storage systems in terms of discharge time and rated power (Toledo, 2010) ... 10

Figure 10: voltage curves for different discharge rates ... 15

Figure 11: example of "bulk" and "absorption" charging stages ... 15

Figure 12: Cycle life as a function of DOD ... 16

Figure 13: evolution of lead-acid battery negative discharging electrode... 17

Figure 14: Development roadmap of energy storage technologies in China ... 20

Figure 15: (Top) Corrado Clini, Italian Minister for the Environment, Land and Sea, and SJTU Chairperson Ma Dexiu at the opening ceremony for SJTU Sino-Italian Green Energy Laboratory (GEL), held on Minhang Campus on May 19, 2012. (Bottom) Prof. Wang Ruzhu, Director of Institute of Refrigeration and Cryogenics, and Corrado Clini. ... 25

Figure 16: system components overview ... 26

Figure 17: GEL apartment ... 27

Figure 18: Ceramic exterior shading (LEFT), walls and air-conditioning and HRV units scheme (RIGHT) ... 27

Figure 19: PANASONIC air sourced heat pump outdoor unit... 29

Figure 20: PV generation plant ... 30

Figure 21: (from LEFT to RIGHT) Single battery, battery pack with inverter and switchgear and battery housing ... 31

Figure 22: AC coupled (LEFT) and DC coupled (RIGHT) systems ... 32

Figure 23: grid connected DC coupled PV-BESS. It comprises 2xDC/DC converters and 1xAC/DC converter ... 32

Figure 24: inverter and switch board ... 33

Figure 25: system overview (LEFT) and system connections and switches (RIGHT) ... 34

Figure 26: System’s electric scheme ... 34

Figure 27: flowchart describing GENERAL MODE energy management system logic by the inverter ... 35

Figure 28: inverter "EzManage App" ... 36

Figure 29: Monitored Weather Data from 5th_{to 9}th_{of June 2018 ... 37}

Figure 30: PV production in typical summer week, over 5 days: from 5th_{to 9}th_{of June 2018 ... 37}

Figure 31: Load Profile over 5 days: from 5th to 9th of June 2018 ... 38 Figure 32: Grid export (negative values) and import (positive values) in the absence of storage 39

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Figure 33: Grid export (negative values) and import (positive values) in the presence of storage

... 39

Figure 34: measured value of main energy flows ... 40

Figure 35: Battery State Of Charge (SOC) in % on the left axis. Battery power on the right, positive when discharging and negative when charging... 40

Figure 36: TRNSYS model ... 42

Figure 37: parameters of PV string model ... 44

Figure 38: parameters of battery model ... 44

Figure 39: parameters of inverter model ... 45

Figure 40: PV model validation. First unsuccessful try. ... 46

Figure 41: PV model validation. Accepted model. ... 46

Figure 42: battery and inverter model validation. Measured data at the top VS simulated results at the bottom. ... 47

Figure 43: battery current rate modelled and measured comparison ... 48

Figure 44:Non-HVAC load, weekly (UP) and daily (DOWN) routines ... 49

Figure 45: Indoor and outdoor temperatures (LEFT). Thermal load (RIGHT) ... 50

Figure 46: Yearly total electrical demand profile. ... 50

Figure 47: Demand met by PV or battery discharging (light blue), demand met by grid (pink) and excess energy sold to the grid (brown) ... 51

Figure 48: Demand met by PV (light blue), demand met by grid (pink) and excess energy sold to the grid (brown) ... 51

Figure 49: Battery activities: SOC (LEFT) and POWER (RIGHT; Negative=discharging; Positive=charging) ... 52

Figure 50: average household electricity prices in 2017 (WEC, 2017) ... 56

Figure 51: actual sizes system (3kWp PV/24kWh battery) battery SOC graph ... 57

Figure 52: optimum sizes system (3.5kWp PV/8kWh battery) battery SOC graph ... 58

Figure 53: NPV trend with varying import and export tariffs... 61

Figure 54: NPV trend with varying tariffs ... 62

Figure 55: NPV trend for self-consumption incentives with increasing value ... 63

Figure 56: NPV under different future tariffs and policies scenarios ... 65

Figure 57: PV cell equivalent electrical circuit (one diode model) ... 79

Figure 58: Voltage vs Current for a 250 Amp-hr Cell ... 83

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LIST OF TABLES

Table 1: 2016 Chinese power generation mix in terms of installed capacity ... 5

Table 2: Latest data on Chinese PV generation ... 8

Table 3: Comparison of key parameters of Battery Energy Storage Systems (May, Davidson, & Monahov, 2018) ... 11

Table 4: Battery technologies characteristics and commercial units used in electric utilities (Divya & Ø stergaard, 2009) ... 12

Table 5: Pb-acid VS Li-ion main characteristics (May, Davidson, & Monahov, 2018) ... 17

Table 6: Electricity tariff in Shanghai, China (State Grid, State Grid Shanghai Municipal Electric Power Company, 2018) ... 19

Table 7: Time of Use tariff distribution in Shanghai, China ... 19

Table 8: Housing Protection Structure and Thermal Performance (Wang, Jingyi, & Ruzhu, 2013) ... 28

Table 9: list of the electrical demand items. ... 28

Table 10: PV module parameters ... 30

Table 11: battery specifications ... 31

Table 12: inverter specifications ... 33

Table 13: Daily cumulative energy figures [kWh] for the typical summer week ... 41

Table 14: PV module model parameters ... 43

Table 15: battery and inverter model validation. Energy flow [kWh] comparison in the chosen period. ... 48

Table 16: non-HVAC electrical load daily composition ... 49

Table 17: annual energy summary for our 3kWp, 14.4kWh storage and 4.3 MWh/year demand system ... 52

Table 18: Technology costs ... 55

Table 19: simulation results ... 59

Table 20: Sensitivity on import tariff ... 60

Table 21: Sensitivity on export tariff ... 60

Table 22: Combined import and export tariffs sensitivity analysis ... 61

Table 23: NPV trend in a decreasing PV generation subsidies context ... 62

Table 24: NPV trend with increasing SELF-CONSUMPTION only PV generation incentives ... 63

Table 25: Reduction rate of battery & PV cost ... 64

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LIST OF ABBREVIATIONS

AGM Absorbent Glass Mat

AM Air Mass

BESS Battery Energy Storage System BOS Balance Of System

CNY Chinese Yuan (People’s Republic of China’s currency; Symbol: ¥) DDL Dynamic-link library

DOD Depth Of Discharge EES Electric Energy Storage EV Electric Vehicle

GEL (Sino-Italian) Green Energy Laboratory GHGs Green House Gasses

HRPSOC High Rate PSOC

HRV Heat Recovery Ventilation

HVAC Heating, Ventilation & Air Conditioning LCA Life Cycle Assessment

MPPT Maximum Power Point Tracking NOCT Nominal Operating Cell Temperature PRC People’s Republic of China

PSOC Partial SOC

PV Photovoltaic

RES Renewable Energy Sources SHE standard hydrogen electrode SJTU Shanghai Jiao Tong University SLI Starting, Lighting & Ignition SOC State Of Charge

TMY Typical Meteorological Year UPS Uninterruptible Power Supply VRLA Valve-regulated Lead-Acid

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NOMENCLATURE

Ta,NOCT Ambient temperature at NOCT [°C]

Icell Cell current [A]

Tcell Cell temperature [°C]

Tc,NOCT Cell temperature at NOCT [°C]

U Cell voltage [V]

ID Diode current [A]

GT Irradiance [W/m²]

IL Light current [A]

Imp Maximum Power Point current at reference [A]

Ump Maximum Power Point voltage at reference [V]

Uoc Open Circuit Voltage [V]

Uoc,ref Open circuit voltage at reference [V]

µUoc Open Circuit Voltage temperature coefficient [V/K] βUoc Open Circuit Voltage temperature coefficients for single

junction monocrystalline silicon cells

[1/K]

Tc,ref Reference cell temperature [°C]

GT,ref Reference solar radiation [W/m²]

Isc Short circuit current [A]

Isc,ref Short circuit current at reference [A]

µIsc Short circuit current temperature coefficient [A/K] βIsc Short circuit current temperature coefficients for single

junction monocrystalline silicon cells

[1/K]

Ish Shunt current [A]

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1. Introduction

Global demand for electricity is growing, and it might grow even faster with the picking up of the electrification of transport (e.g. Electric Vehicles) and heat (e.g. Heat Pumps). At the same time, the world if facing the so called energy trilemma of providing sustainable energy through three dimensions: energy security, energy equity (accessibility and affordability) and environmental sustainability (tackling climate change and pollution) (WEC, 2017). At a geopolitical level, frequent energy crisis and fossil fuel dependency are other crucial factors in shaping the future of the energy sector.

One of the most promising solutions to those challenges is the large scale deployment of Renewable Energy Sources (RES), which are reliable in the sense of being well spread throughout the planet and permanently available in their own timescales, affordable in many circumstances depending on how they are harnessed and have the potential to have a very low environmental impact considering the whole life cycle of each specific system. Amongst the RES, wind and solar are the most interesting due to their potential and their availability pretty much everywhere in the world.

However RES have their issues. From a purely energetic point of view the main issues are intermittency, their availability is not constant in time and space, and non-programmability, their output is weather dependent and cannot be planned, although can be forecasted. From an economic point of view they have to face cost competition from traditional sources of electricity generation, such as fossil fuel fired thermo-electrical power plants.

Electrical Energy Storage (EES) is being put forward as a potential solution to RES energetic issues, mitigating the impact of shifting from traditional sources of electricity production and paving the way to a substantial increase in RES penetration into the overall production share. There is also interest on the potential economic benefits of coupling EES to RES.

Introducing energy storage as a new major player into the energy sector at many different levels carries major challenges. This work focuses on assessing technical and economic effects of coupling EES in the form of electrochemical rechargeable batteries to residential photovoltaic (PV) systems connected at a domestic level.

1.1. PV generation

RES includes hydro, geothermal, solar PV, solar thermal, tide/wave/ocean, wind, municipal waste and biofuels. Solar PV is an especially attractive source considering the above mentioned energy trilemma as it is reliable and available, becoming more and more affordable with reducing technology cost and improved efficiency, and throughout its life cycle does emit low level of pollutants and GHGs. Still, cost is a challenge and incentives have been and in some cases still are necessary to keep it economically viable. Technical issues of intermittency and non-programmability are intrinsically there, causing problems at different levels of power generation and distribution. Besides others, social issues such as land usage are keeping it up for public debates.

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Below is an introduction on PV generation theory that will be followed by an overview of PV energy generation in China.

1.1.1. PV theory

Solar PV electricity refers to electricity produced from solar photovoltaics effect, which is the direct conversion of light into electricity. Basic PV cells have the structure of a diode, a junction between p-type and n-type semiconductor materials. Semiconductors can be processed to their crystalline form, a regular structure where adjacent atoms form precise bonding through each of their covalent electrons. This structure can be treated in different ways, e.g. injection of atoms having a different number of covalent electrons, to obtain material with extra free electrons, i.e. N-type, or with bonds missing electrons known as holes, i.e. P-type. Those types are not electrically charged, despite having extra charge carriers, but when connected together a so called space charge region is formed at the interface where the neighboring extra charge carriers have moved across the border creating a potential difference built-in in the very structure of the diode, and impeding further charge carrier movement. When hit by light enough energy is given to electrons to bridge the energy bandgap required to jump from the valence to the conductive band and become free from their respective holes. Those newly created charge carriers are free to move under the built-in potential difference of the p-n junction and migrate across the cell giving the possibility to harness the resulting current via the connection of an external circuit.

A crucial solar cell parameter is the efficiency in terms of ratio between the maximum power output and the global incident radiation. There are major fundamental losses in the energy conversion process limiting the theoretical maximum efficiency. Those losses can be divided into two major categories: absorption-emission losses, corresponding to the energy of photons emitted by the PV device, and spectral mismatch losses, due to the fact that the photons energy is not equal to the electrons energy bandgap, so this difference is dissipated. Spectral mismatch losses are the largest part (Dupré, Vaillon, & Green, 2017).

For a single p-n junction photovoltaic cell this theoretical limit is 33.7% assuming typical sunlight conditions (unconcentrated, AM 1.5 solar spectrum), occurring at a bandgap of 1.34 eV. Silicon has a lower bandgap (1.1 eV), therefore a lower theoretical limit. Real solar cells have additional inefficiencies, lowering the efficiency even further, which is tested in the lab under specified operating conditions. Single junction silicon based solar cell laboratory efficiency are under 28%. There are different solar cell technologies, and they can be classified in three main categories. First generation cells are traditional wafer based cells made of silicon. Mono-crystalline silicon cells have higher efficiency but are more expensive than poly-crystalline ones, which are produced through a cheaper process. The latter have some better behavior with diffuse light and higher temperature, so might be the best choice depending on the application. Second generation solar cells are thin-film: amorphous silicon, a non-crystallin form, has a higher bandgap (1.7 eV) and a better degradation rate, besides being much cheaper. The drawback is its lower peak efficiency. Other thin film technologies are CdTe (Cadmium Tellurium), CIGS (Copper Indium Gallium Selenide) and GaAs (Gallium Arsenide). Third generation cells are emerging technologies trying to overcome previous generations’ issues, but they have not reached commercial maturity yet and

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the current market for commercial PV module is split at roughly 50% polycrystalline, 40% monocrystalline and the remaining 10% are thin-film type.

Furthermore, multijunction cells are composed by more than one junction, extending their overall bandgap, hence being able to overcome the spectral mismatch limit of the single junction. Also concentrator systems (CPV) uses optical lenses and tracking systems to concentrate direct light to high-efficient cells, achieving higher efficiencies.

Figure 1: solar cell efficiency chart (NREL, 2018)

While Figure 1 shows the highest efficiency achieved by solar cells in the lab, each commercial module’s efficiency needs to be tested at Standard Test Condition (STC), which for flat panels are: irradiance of 1000 W/m2_{, AM1.5 standard global spectrum (at sea level and solar zenith angle of} 48.19°), operating temperature of 25°C and normal incidence irradiance.

Temperature is one of the major variables affecting the performance of PV modules. As stated above all modules are tested at a standard temperature, but this does not express how the power output varies with the operating temperature. Temperature coefficients for current and voltage are often provided by manufacturer, or can be found in literature for different types of cells. Concerning first and second generation modules, with increasing temperature, short circuit current increases slightly but the voltage drops more remarkedly resulting in an overall drop in power generation output.

Summarizing, theoretical efficiency limits the real cell efficiency tested in the lab, which is in turn higher than the module efficiency tested under STC. Furthermore, the efficiency of the overall PV system, which is usually composed of a combination of series and parallel collection of modules, is even lower and depends on its location, installation, operating conditions and its BOS (balance of system) performance, comprising all the components other than the PV array itself, such as

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power conditioning equipment, e.g. inverter, wiring, fuses and switches, monitoring equipment etc..

PV system installation, apart from the obvious influence on the received solar radiation, affects how the panel exchanges heat with the surroundings, hence its operating temperature, therefore its output. There are several performance indicators to assess the system efficiency such as the final yield or the ratio between the annual energy output and the nominal capacity of the plant. If those indicators are not as expected, sources of losses need to be investigated. Shading, maximum power point tracking (MPPT) losses and inverter losses are amongst the main ones. In the majority of cases, DC produced electricity needs to be converted to AC through power electronics. Each array, independent collection of modules, should have its own inverter. Another solution is to have a microinverter for each module. PV systems can be grid-connected, with the AC side of the inverter matching the electricity grid frequency and voltage, or stand-alone system. The latter is common in remote areas where the access to the grid is either impossible or too expensive. They comprises battery storage, charge controller to manage the energy flow between generation unit, battery pack and local load (Pearsall, 2017). PV module lifetime is 20-30 years, with some manufacturers giving warranty in forms of guaranteed performance over time. However, other components of the whole PV system, such as the inverter, might require earlier replacement. Maintenance should not be looked over and a constant performance monitoring would give the possibility of fixing arising issues timely.

1.1.2. PV energy production in China

While the world developed countries have registered a reduction in their electricity production, resulting from energy efficiency gains combined with a move towards less carbon intensive power generation mix and economy, China, the world top electricity producer since 2011 when it reached 4,470 TWh of yearly electricity production overtaking the USA, is responsible for half of the 2016 global increase, resulting from high demand combined with fast development of generating capacities (Enerdata, 2017).

Figure 2: Electricity production in 2016 (Enerdata, 2017) 6,015

4,327

1,423 1,088 1,013

653 643 580 553 549 ₃₃₉ ₂₈₈

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China is still in the process of rapid industrialisation and urbanisation. Balancing economic and social development and the related energy and environment issues is a challenge to which the Chinese government is paying much attention. From 2010, during the so called 12th_{five-year plan} (2010-2015), targets on energy efficiency, non-fossil fuel share and environment protection have been set, resulting in a decreasing energy and carbon intensity whilst the GDP kept growing. For the 13th_{five-year plan (2015-2020) ambitious goals have been set on a comprehensive green} development aimed at promoting renewables, reducing pollution and introducing other measures to become a leader in sustainable development (WEC, 2017).

As a result, despite the Chinese electricity generation mix (Table 1) is still dominated by coal fired thermoelectrical power plants, with comparatively small contribution from nuclear and gas, and with hydropower playing an important role, non-hydro RES shares are growing at the fastest pace and are forecasted to grow considerably, for example wind and solar combined installed capacity moving from 14% to 40% under the International Energy Agency New Policy Scenario (IEA, World Energy Outlook 2017: China, 2018), Figure 3.

Table 1: 2016 Chinese power generation mix in terms of installed capacity 2016 DATA Installed capacity [GW] Installed capacity [%]

Coal 945 58 Oil 9 1 Gas 67 4 Nuclear 34 2 Hydro 332 20 Wind 149 9 Solar 77 5 Bioenergy 12 1 Total Renewable 570 35 TOT 1625 100

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By the end of 2017, China's renewable energy power generation capacity reached 650 GW, increasing 14.4% from previous year value of 570 GW; PV generation is the fastest growing type with 68.7% increase from previous year, followed by biomass (22.6%), wind (10.5%) and hydropower (2.7%). Renewables generated 1700 TWh, accounting for 26.4% of the total Chinese electricity generation. Wind and solar share in installed capacity was 14% at the end of 2016, however the share in electricity production is lower than 6% (Figure 4) due to the lower level of utilization of such sources compared to traditional ones. The rate of growth is the biggest though.

Figure 4: Wind and Solar combined electricity production share progression in China (Enerdata, 2017)

China has got great potential in terms of solar energy resource, having a very large continental mass area with relatively good irradiation levels. Comparing European and Chinese Global Horizontal Irradiation (GHI) maps, in Europe there is a strong dependence on latitude, while in China other weather factors, such as cloud coverage, humidity and altitude play major roles. Despite being at a relatively low latitude of 31°N similar to Cairo in Egypt, Shanghai receives, according to TMY2 data, 1.32 MWh/m2_{of solar energy on the horizontal plane per year, lower} than the 1.56 MWh/m2 _{of Rome (Italy) using the same type of data.}

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PV in China has been subsidized since 2013, both in utility and residential scale, although lately there is the tendency towards incentivizing more the latter. Consequently, PV electricity production is massively growing and by the end of 2015 China became the biggest producer of PV electricity in the world with 45 TWh, which accounted for 18.3% of the global share. The installed capacity amounted to 43.2 GW, although that was still only the 0.8% of the total domestic electricity generation (IEA, Key world energy statistics, 2017).

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Figure 7: PV data at the end of 2015 (IEA, 2017)

The latest data confirms that the PV sector keeps growing fast. In 2016 alone around 34 GW of new PV generation has been installed, bringing the cumulative capacity to around 77 GW. The annual power generation amounted to 66.2 TWh, accounting for 1% of China's total annual power generation (NEA, Chinese National Energy Administration, 2017).

In 2017, PV electricity generation was 118 TWh, an increase of 78.6% year-on-year. The newly installed capacity was 53 GW, with the interesting fact that the share between centralize (big, utility scale plants) and distributed (smaller commercial and residential plants) plants have changed in favor of distributed plants. In fact year-on-year increase of centralized plants installation was 11% compared to 370% of distributed ones. By the end of 2017, the cumulative installed capacity of photovoltaic power generation in China had reached 130 GWs, of which, photovoltaic power stations were 100 GW and distributed PV were 30 GW (NEA, Chinese National Energy Administration, 2018).

Table 2: Latest data on Chinese PV generation

Latest Chinese PV data Newly installed TOTAL [GW] Cumulative installed TOTAL [GW] Cumulative installed CENTALIZED [GW] Cumulative installed DISTRIBUTED [GW] Electricity generation [TWh] 2015 - 43 - - 45 (0.8%) 2016 34 77 - - 66 (1%) 2017 53 130 100 (77%) 30 (23%) 118 (2%)

Chinese PV industry is growing more than any other electricity source, with small commercial and residential plants that are starting to being preferred to bigger utility scale plants. As the penetration of such distributed generators grows, related issues are amplified. Energy storage is proposed as a solution to such challenge.

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1.2. Electrical Energy Storage

Energy storage is intended here as the process of accumulating energy to be used at a different

time or in specific conditions. Especially referring to stationary applications, excluding portable devices and ground transportation applications that have the different purpose of mobility, despite the fact that same or similar technologies can be used.

As per electrical, it is intended that the energy at the starting and ending point of the round-trip storage process is indeed in electrical form. However, the stored energy can assume different forms depending on the technology used, such as mechanical, chemical, thermal or remain electrical in an Ultra Capacitor for example, see Figure 8.

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Stationary electrical energy storage applications vary in capacity (amount of stored energy), power capability (charging and discharging current rates) and dynamic properties (power ramp rates), Figure 9. At one end, systems like Pumped Hydro (PHS) and Compressed Air Energy Storage (CAES) have huge capacity potential but are less responsive than electrochemical batteries or flywheels. The opposite applies for supercapacitors, which are devices able to provide immediate high power but for very short periods of time.

Figure 9: Application of energy storage systems in terms of discharge time and rated power (Toledo, 2010)

Utility scale applications range from big Pumped Hydro Storage power plants of hundreds of MWs providing ancillary services to the transmission network, such as balancing reserve, to medium sized plants of MWs, dealing with other ancillary services like frequency control (there are examples of flywheel systems), to smaller plants of tens of kWs used at a distribution network level for renewable energy integration or to defer investment by lowering peak demand of congested areas, which could be using electrochemical batteries.

At a commercial level, electrical energy storage is crucial for back up, standby and UPS (Uninterruptible Power Supply) applications, such as telecommunications, data networks and national security where continuity of the electricity supply is essential. Classic residential applications have the objective of providing back-up during grid black outs.

Both at commercial and residential level however, other energy storage applications with the purpose of reducing energy costs like demand peak reduction (load shifting and load levelling) and renewable energy coupling (increase PV self-consumption) are increasing in popularity. The latter is the scope of this work, while stand alone or off-grid application are outside the scope of this work.

1.2.1. Battery Energy Storage Systems

Rechargeable electrochemical batteries (or secondary batteries) are reversible devices able to transform chemical energy into electricity while discharging and electrical energy back into chemical when charged from an external source. A battery is composed of one or more

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electrochemical cells, each consisting of an electrolyte, a positive electrode (anode) and a negative electrode (cathode). During discharge, electrochemical reactions (REDOX) occur at the two electrodes generating a flow of electrons through an external circuit. The reactions are reversible, allowing the battery to be recharged by applying an external voltage across the electrodes.

Battery Energy Storage Systems (BESSs) have some advantages compared to the other types of electrical storage. Scalability is one of their main features, allowing the same technology and possibly even the same type of cell to be scaled from small portable applications to large grid connected ones. Efficiency is a strong point in favor of batteries with values ranging from 70% to 90% of round trip efficiency depending on the technology (Table 3). Specific energy is also high, especially for Li-ion batteries, but this is less important for stationary applications. Finally they have a low response time in operations, giving them great dispatchability appeal, crucial feature for operations such as fast frequency control.

Table 3: Comparison of key parameters of Battery Energy Storage Systems (May, Davidson, & Monahov, 2018)

Having stated the major advantages, it is fair to say that disadvantages are not negligible and they could even be deal breakers in some situations. Cost is definitely the main issue of batteries. Despite having great capabilities, they need to bring in quantifiable benefits to justify the high investment cost. Also life need to be considered in the cost-benefit analysis, especially considering that the expected life could decrease considerably if the battery is not managed correctly. Safety is another concerning point: lead-acid batteries is a safe system with electrolyte and active materials that are not flammable. In a fire, the battery cases will burn but the risk of this is low, especially if flame retardant materials are specified. Li-ion batteries have a much higher energy density, highly reactive component materials and a flammable electrolyte. (May, Davidson, & Monahov, 2018)

There are also other aspects to consider such as recyclability and sustainability. Batteries are composed of special materials with high pollution potential if not handled correctly at the end of their life. For lead batteries, there is an established recycling infrastructure in place that operates economically in full compliance with all environmental regulations. Almost all material can be recovered from a spent lead acid battery, the main problem is that if not recycled and dispersed in the environment, lead is a highly toxic element. For Li-ion and other chemistries used for battery energy storage, recycling processes do not recover significant value and will need to be substantially improved to meet current and future requirements (May, Davidson, & Monahov, 2018). Sustainability is also a big deal, especially if batteries are promoted by technologies that are supposed to be environmental friendly, like EVs or RESs, they should not offset their environmental benefits. There are LCA studies assessing the overall GHGs emissions of Li-Ion batteries, for example producing 1 kWh of storage capacity requires on average 328 kWh of

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primary energy and leads to GHG emissions of 110 kgCO2eq (Peters et al., 2017). Furthermore, some studies suggest that other impacts such as toxicity might be even more critical. (Abdin & Noussan, 2018).

Currently various batteries are used for the application with PV systems. In sodium–sulfur (NaS) batteries a heat source is required and it needs to operate at high temperature, partially reducing the battery performance (Chen et al., 2009). Lithium–ion batteries (Li–ion) have been deployed in a wide range of energy-storage applications, ranging from a few kilowatt-hours batteries in residential systems with rooftop photovoltaic arrays to multi-megawatt containerized batteries for the provision of grid ancillary services. Nickel–cadmium (Ni–Cd) batteries are known for long life and reliable service, but are relatively expensive. Lead–acid batteries can provide a cost-competitive and proven energy storage but have relatively limited cycle life and low-energy density (Baker, 2008). See Table 4 for a comparison.

Table 4: Battery technologies characteristics and commercial units used in electric utilities (Divya & Ø stergaard, 2009)

1.2.2. Lead-acid batteries: from basic theory to advanced design

Lead acid is a well-established battery technology, being invented in the nineteenth century and having been widely used in many fields, e.g. as starting, lighting and ignition (SLI) batteries for vehicles. They are also attractive for Hybrid Electric Vehicles (HEVs) and energy storage applications owing to their relatively high round-trip efficiencies of 75–80% (Rahn & Wang, 2013). The chemistry of basic flooded lead-acid battery, where the electrolyte of sulfuric acid diluted with water is in liquid state simply covering the plate shaped electrodes, is briefly showed. At the start of the discharging process the positive electrode is coated with lead dioxide (𝑃𝑏𝑂2) and the

negative electrode is made of sponge lead (𝑃𝑏), they both react with positive and negative ions (𝐻+& 𝐻𝑆𝑂4−) resulting from the dissociated sulfuric acid (𝐻2𝑆𝑂4) to form lead sulfate (𝑃𝑏𝑆𝑂4)

and water.

Reaction at the positive electrode:

𝑃𝑏𝑂2+ 3𝐻++ 𝐻𝑆𝑂4−+ 2𝑒−→ 𝑃𝑏𝑆𝑂4(𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑖𝑜𝑛 𝑜𝑓 𝑃𝑏2+𝑎𝑛𝑑 𝑆𝑂42−) + 2𝐻2𝑂 (1.685 𝑉)

Reaction at the negative electrode:

𝑃𝑏 + 𝐻𝑆𝑂4−→ 𝑃𝑏𝑆𝑂4(𝑑𝑒𝑝𝑜𝑠𝑖𝑡𝑖𝑜𝑛 𝑜𝑓 𝑃𝑏2+𝑎𝑛𝑑 𝑆𝑂42−) + 𝐻++ 2𝑒− (0.365 𝑉)

Both electrodes are discharged to lead sulfate which is a poor conductor and the electrolyte is progressively further diluted as the discharging proceeds. A separator between the electrodes allows ionic migration while impeding electric current, which flows through the external circuit instead. The overall cell reaction is:

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The theoretical value of the cell voltage depends on the anode and cathode material. At the negative electrode lead produces -0.365V compared to a Standard Hydrogen Electrode (SHE), while at the positive electrode lead sulfate produces 1.685V, resulting in an overall cell theoretical potential of 2.05V.

On charge the reverse reactions take place. As the cell approaches top-of-charge and the electrodes have been progressively converted back into lead dioxide and lead, the specific gravity of the electrolyte rises as the sulfate concentration increases.

Besides the main REDOX reactions, some side reactions can take place resulting in aging of the battery. The aim is to avoid operating conditions promoting those aging processes. Main side reactions are:

• Gas Generation: Overcharging a cell beyond its theoretical potential will result in water loss as it is electrolyzed to hydrogen and oxygen. Hydrogen and oxygen can go through a recombination cycle to turn bank into water. However, the over-potential at which this occurs is sufficiently high for water loss to be manageable by controlling the charging voltage;

• Corrosion: Lead underneath the lead dioxide coated positive electrode can be corroded by the sulfuric acid to form lead oxides that increase the resistance of the electrode. In the longer term corrosion will lead to shedding of active material from the positive plates, this is often the cause of battery failure;

• Sulfation: Lead sulfate is a product of the discharging process at both electrodes. Its crystals form on the electrodes and should be converted back to the electrode’s original element during the charging process. Sulfation occurs when those lead sulfate crystals remain permanently stuck on the electrode surface, reducing both active material and available electrode surface. This effect is reduced if the battery is regularly brought to fully charge. In fact a periodic equalization cycle is usually planned to de-sulfate the plates. On the contrary battery non used regularly and left half charged develop strong sulfation leading to a premature end of the battery’s life;

• Active material degradation: All of the above side reactions cause issues to the active material at the electrode. Also the designed charge and discharge processes do stress the plates as well, for example considering that there is a change in volume of the product of the discharging reaction. As per the corrosion effect, the most sensitive material is the lead sulfated at the positive plate;

• Separator metallization: The lead sulfate formed during discharging and precipitated can fill the separator pores and be converted to metallic lead there, becoming potential cause of short circuit through the separator.

Lead acid batteries designed as SLI batteries have large electrodes surface area for high currents. Different, more robust design with lower electrodes area allows for better discharging operations bringing the battery to a lower level of charge and extended life, they are known as deep-cycle batteries.

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Flooded batteries, where the electrolyte is liquid covering the plates and the battery is covered by a lid, need to be installed in the upright position to avoid spilling. Not being sealed, they release the produced gasses: the noxious ones that need to be vented outside and the oxygen and hydrogen that result in permanent loss of water, which needs to be periodically topped up. Valve regulated lead acid (VLRA) batteries immobilize the electrolyte either using a fumed silica gelling agent (GEL VLRA) or a highly porous and absorbent glass mat (AGM VLRA). These additional materials also act as separator allowing ionic movement but being electrical insulator. Those batteries are sealed so can be installed in any orientation and are designed to allow oxygen and hydrogen recombination, but if pressures build up due too much gas generation than a one way valve will allow automatic venting. They can also operate at a wider range of temperature. AGM has very low internal resistance, is capable to deliver high currents on demand and offers a relatively long service life, even when deep cycled. The leading advantages of AGM are a charge that is up to five times faster than the flooded version, and the ability to deep cycle: AGM offers a depth-of-discharge (DOD) of 80%, while the flooded, on the other hand, is specified at 50% DOD to attain the same cycle life. The negatives are slightly lower specific energy and higher manufacturing costs than the flooded.

AGM stands up well to low temperatures and has a low self-discharge. On the other hand high temperatures are not ideal. GEL batteries have improved heat transfer as the separator is a better heat conductor, resulting in a longer life. A further advantage of GEL is that its performance remain high during most of its service life before dropping rapidly towards the end of life; AGM, in comparison, fades gradually. GEL however have higher internal resistance, so they miss out on the AGM high charge and discharge current performance which might be important in energy storage applications (Rahn & Wang, 2013).

Batteries are complex objects, their behavior is affected by many factors. During charging and discharging operations the main variables, i.e. voltage, current and SOC, are related one another by characteristic curves specific to each battery.

The State Of Charge (SOC) of a battery is defined according to the voltage produced at the electrodes. The battery is designed to function between a maximum (100% SOC) and a minimum (0% SOC) voltage, called cut-off voltage. For Lead-acid batteries, a minimum SOC higher than 0% (usually between 20% and 60%) is chosen depending on the type of battery because it is not possible to get to 0% and also to reduce the stress hence enhancing the battery life. However, this reduces the usable battery capacity.

The battery capacity is also not constant, but depends by the rate of discharge. Increasing the rate of discharge, lowers the voltage due to ohmic losses, charge transfer kinetic losses (at high SOC) and mass transport limitations (at low SOC). Therefore, the battery reaches the cut-off voltage before is completely discharged, losing available capacity for that cycle. In fact, nominal battery capacity is given for a defined discharged rate.

The relationship between battery capacity and the rate of discharge is not a linear one. It follows Peukert’s law, named after the German scientist who formulated it in 1897. Figure 10 shows examples of discharging curves. The higher the rate, the lower the depth of discharge (DOD).

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Figure 10: voltage curves for different discharge rates

If a constant current rate is applied, the discharge rate in terms of power would not be constant, due to the voltage drop. As the battery discharges, the voltage, hence power, decrease.

The charging operation for lead-acid batteries consists of three periods, Figure 11. At first, a constant current is applied to bring up the voltage. This is to avoid high currents, hence high temperatures, in case of constant voltage application, which would cause damaging side reactions. This initial phase is called “bulk stage”, being the stage at which most of the energy is transferred to the battery relatively quickly to bring the SOC up to 80% or 90%. Once the voltage is high enough, it is kept constant while the current decreases due to the increasing of the battery internal resistance with increasing SOC. This second stage is called “absorption stage” and finishes off the charging process. Once the battery is full a third stage keeps the battery fully charged, opposing the natural self-discharged process. This can be the so called “float charge” at constant voltage, “trickle charge” at a low rate constant current or more sophisticated charging methods using different voltage/current time trajectories and additional sensors (temperature and pressure) to minimize damage to battery hence improving life, safety and efficiency.

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Fast charging enables high charging currents but uses feedback to cut current when needed in order to avoid excessive gassing and rise in temp and pressure. Lead-acid batteries can be slightly overcharged without dire consequences, but gas generation and overheating are possible with excessive overcharging. Li-ion batteries are irreversibly degraded if overcharged. A failure to regularly fully charge lead acid batteries prematurely ages them, due to sulfation. This does not happen for lithium batteries.

Life of a battery is usually identified by the so called “cycle life” parameter which is defined as the number of cycles before the performance of the battery decreases under a certain level. It depends on design features such as chemistry and design parameters but it is also strongly affected by operating parameters such as temperature and charging/discharge patterns, so it varies depending on the application. One of the most important parameter is the DOD, in fact nominal cycle life it is defined at a specific DOD. Theoretically, Li-ion batteries can be discharged to 100% DOD (80% suggested), while normal lead-acid only down to 80% (30% suggested). Cycle life decreases with DOD, Figure 12. On average: at 80% DOD, li-ion last 2000 cycles, Pb-acid last 250 cycles. At 30% DOD, li-ion last 6000 cycles, Pb-acid last 1500 cycles. The end of life is characterized by a drop in capacity to 50–80% of the initial capacity, depending on the chemistry and application.

Figure 12: Cycle life as a function of DOD

Table 5 shows the main characteristics of lead-acid (Pb-acid) batteries compared to Lithium-ion (Li-ion) ones. Li-ion batteries have advantages in terms of energy density and specific energy but this is less important for static installations like energy storage systems. The specific Power refers to a static situation (80% DOD) in discharge mode, while power differs during the discharging process as the SOC decrease. Same concept for charging process as the charge acceptance of a battery throughout different levels of SOC, from low to high, dictates how fast it can be charged. Finally efficiency of both chemistry is fairly good.

In general, Li-ion batteries overperform lead-acid ones but then cost, safety and sustainability are in favor of the latter as briefly explained before, which is the reason why it is still valuable to keep lead-acid batteries into the possible options for energy storage.

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Table 5: Pb-acid VS Li-ion main characteristics (May, Davidson, & Monahov, 2018)

Theoretical Cell Voltage [V]

Energy Power Efficiency

Specific [Wh/Kg] Density [Wh/L] Specific [W/Kg] Density [W/L]

Average round trip efficiency [%]

Pb-acid 2.05 35-40 80-90 250 500 85

Li-ion 4.1 150-180 300-350 800 800 90

To improve the performance of conventional lead-acid batteries, new advanced designs are being proposed. The evolution of lead-acid batteries is shown in Figure 13 and briefly commented below. Type “b”, also known as LEAD-CARBON battery is the technology employed in this work.

Figure 13: evolution of lead-acid battery negative discharging electrode

Conventional lead-acid battery technology is very peculiar in the sense that the charging and discharging processes are not symmetrical in performance as they can be discharged at a high rate but the charging process is much slower. When discharging, lead sulfate forms on the lead made negative electrode and it then dissolves back while charging. However this process is slow and limits the charge acceptance. Also, especially in case of PSOC (partial SOC) operations, lead sulfate crystals would not completely dissolve, engraining in the negative plate and reducing the charge acceptance even further (in a process called SULFATION). The positive electrode also deals with lead sulfate, but it supports higher charge rates.

In new applications requiring high rate partial state of charge (HRPSOC) operation, such as hybrid vehicles and energy storage applications, the performance and life of lead-acid battery are severely limited due to negative plate sulfation. Adding an appropriate form of carbon in the negative plate (Figure 13 b) helps. This battery technology could be referred to as LEAD-CARBON battery and is currently the only mass produced and viable technology available for start-stop and basic micro-hybrid vehicles. It is expected that it will play a major role in grid storage applications in the future (Jaiswal & Chalasani, 2015). According to (Jaiswal & Chalasani, 2015), adding carbon at the negative plate enhances performances through three different mechanisms:

• Capacity effect: carbon serves as a capacitive buffer to absorb charge current in excess of the amount that can be accommodated by the Faradaic (i.e. electrochemical) reaction;

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• Structural effect: carbon extends the area of the electrode microstructure on which the electrochemical charge and discharge reactions (Faradaic reactions) can take place, hence enhancing the charge transfer;

• Physical effects: for instance by obstructing the growth of lead sulfate crystals and/or by maintaining channels for irrigation of the electrode by the electrolyte.

In summary, adding carbon-based material to the negative electrode lowers sulfation, improves conductivity and increases charge acceptance. Hence, so called LEAD-CARBON battery has improved performances in terms of higher charging/discharging rates and improving cycle life. As stated above, LEAD-CARBON battery is the type used in this work (Figure 13 b). More advanced designs are being developed by private companies such as the following: Axion Power’s PbC battery (Figure 13 c) is assambled similarly to a VRLA AGM battery with a series of 2V cells, advanced AGM separators and lead-oxide positive plates. The innovation is in the negative plate where carbon is the only active material, it has no faradaic energy storage but functions as a capacitor. This design eliminates the issue of sulfation and results in greater charge acceptance hence faster recharge and longer cycle life, (Axion Power, 2018). Lower energy density and higher cost are the drawbacks; UltraBattery (Figure 13 d) has a compound negative plate in which one section consists of the usual sponge lead active-material and the other is composed of supercapacitor-grade carbon. All other components of the battery are conventional. It can be defined as a hybrid battery combining the fast changing rates of an ultracapacitor with the energy storage potential of a conventional lead-acid battery and having higher efficiency and longer life under PSOC operations, (UltraBattery, 2018).

1.2.3. Storage in China

In China, big utility scale storage plants in the form of Pumped Hydro Schemes (PHS) have been developed since recently and despite now being one of the country with the highest installed PHS capacity, it is still only the 1.6% (21.8 GW at the end of 2014) of the total installed power generation capacity.

Considering smaller scale energy storage (hence excluding PHS, CAES and heat storage), global cumulative installed capacity of energy storage system was 946.8 MW by the end of 2015, while China accounted for 105.5 MW, mainly consisting of electrochemical rechargeable batteries, with 66% of Li-ion and 15% of lead-acid (Yua & Duan, 2017). These are mainly installed in the demand side with the proportion of 46% of the total, with the idea of harnessing the profit coming from big differences in peak/non-peak prices (price arbitrage, that is making a profit by buying at low price and selling at high price).

China is the world biggest electricity consumer, while the distribution of power resources is unbalanced with generating plants away from load centers, mainly located along the eastern and southern coast. This results in high cross-transmission of electricity. Electricity supply, T&D (transmission and distribution) and retail are monopolized by two giant state owned companies: State Grid Corporation in the north and China Southern Power Grid in the south. The government regulates the retail price according to the T&D cost and the development level of each district,

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resulting in huge discrepancies between off-peak and peak prices creating great potential for “price arbitrage” (Lin & Wu, 2017).

In China the standard electricity tariff is a Time Of Use Tariff. It varies from province to province and it is different for commercial and residential sector. In Shanghai the residential tariff is a simple all-year-around tariff composed by a so called “valley” part, low price at night, and a “peak” part, high price during the day from 6AM to 10PM. Commercial tariff is more articulated having three parts called “valley”, “flat” and “peak” from least to most expensive and it changes in summer and winter. See Table 6 and Table 7 for details.

Table 6: Electricity tariff in Shanghai, China (State Grid, State Grid Shanghai Municipal Electric Power Company, 2018)

Table 7: Time of Use tariff distribution in Shanghai, China

This big gap between peak and valley prices makes commercial storage for price arbitrage already profitable in some Chinese regions. Furthermore, it will be profitable in more and more regions if batteries prices and performance improve (Lin & Wu, 2017). However, large deployment of storage leading to the achievement of beneficial peak reduction, together with an overall increase in power consumption due to the round-trip efficiency will force the power grid to adjust prices, especially considering that the above effect will lead to a decrease in grid’s revenue. This could create uncertainties and undermine future profitability of storage used for price arbitrage. Battery storage externalities and its interaction with grid policies needs to be investigated carefully to pave the way for a healthy large scale deployment that could be beneficial from a comprehensive perspective of all stakeholders.

Lately, concurrently with the development of policies aimed at promoting a low-carbon energy sector, promoting energy storage has entered more and more in the government’s agenda, with the consequence of expected increase in energy storage applications. In June 2016 the Action Plan of Energy Technology Revolutionary Innovation was issued, ranking energy storage technology as one of the key tasks and proposing its short, medium and long-term development roadmap as shown (Figure 14). Growth of energy storage installed capacity during 2014-2015 was mainly from the distributed micro-grid projects on consumer’s side, and PV-battery schemes were popular because of the relatively mature technology and policy. However direct incentives at this type of storage systems are still missing.

Summer non-Summer

Valley 0.038 0.045 0.041

Flat 0.103 0.098 0.083

Peak 0.163 0.159 0.083

Valley to Peak Ratio in % 23% 29% 50%

Peak to Valley Ratio 4.28 3.49 2.00

Commercial €/kWh Residential 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 non-Summer Summer Commercial Residential Hour

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Figure 14: Development roadmap of energy storage technologies in China

1.3. Residential PV-battery energy storage systems

The popularity of energy storage at a residential level is growing due to its potential positive contribution to the technical operation of the electricity distribution network and to the economic performance of PV systems in future scenarios.

The penetration of PV generation in the form of small to medium sized plants connected to the low and medium voltage distribution network is creating big issues. Its intermittent and non-programmable nature makes the balancing of power challenging. Big swings in demand and generation at low voltage level results in voltage swings within the lines which needs to be kept within legal limits by the distribution network operator. Especially at times of low demand and high generation, such as sunny summer weekends, with power flowing backwards from lower to higher voltage networks the voltage at the end of distribution lines rises dangerously above the limit. This situation is difficult to keep under control in a network that has been designed for the unidirectional flow of electricity from big centralized power plants down to users. Power quality would also be improved by injecting less DC originated power into the network.

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At the same time with the demand of electricity growing at a considerable pace and with the possibility of literally exploding under scenarios of mobility and heat electrification, distribution network lines need to be continuously upgraded to account for the higher peak power they are supposed to withstand, while keeping security of supply at maximum level in a world relying more and more on electricity.

Electric Energy storage has the double advantage of simultaneously mitigating those two big issues by absorbing the daily excess generation energy and decreasing the power requirement at peak time. Smoothing both feed-in and demand peak. Reducing the gap between peak and off-peak periods would result in a more efficient use of the network and help the system as a whole in its balancing duty. Furthermore, mitigating PV impact on the network would allow for more penetration, assisting the deployment of more RES while enhancing grid reliability.

The advantages of storage for the distribution network are, as explained, huge. Storage is starting to be recognized as an important player by regulators and operators resulting in the appearance of EES tailored incentive schemes and the installation of utility scale systems serving different purposes. However, like small residential PV has had a huge impact on the overall network, deploying storage at the same level should have similar effectiveness.

From an end user point of view, on top the environmental motive one can have, the installation of storage must have some positive economic impacts. The main operating strategies of profitable commercial and residential energy storage are the following:

a) Load shifting/peak smoothing operations

Using storage for load shifting is unrelated to the presence of PV generation. Profit comes only in case of Time Of Use tariffs, charging the battery at low price from the grid and discharging it at high price to meet local demand. The difference between peak and valley prices is an important indicator of the economic potential of storage. This could also help reducing the power peak charges.

b) Self-consumption of associated PV system improvement

Profit comes from the difference between the electricity import tariff and the selling price. If the selling price is larger or equal to the electricity import tariff, than there is no value in adding storage to a PV system. Vice versa, a large difference between selling and buying price is then a good indication on storage value. It is important to note that Time Of Use tariff do not directly affect the profitability of storage used to improve PV self-consumption, but its presence would modify the economic values.

This work focuses on battery systems associated with PV generation plants at a residential level, with the purpose of maximizing self-consumption. This operation strategy naturally smooth the interaction of residential PV system with the grid and, due to the nature of PV production (daytime peak) and domestic load profile (evening peak), it also results in an indirect overall load shifting effect.

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PV has been incentivised heavily in the past resulting in the booming of the industry and the consequent fall in technology cost. Installing a PV plant at a residential level would provide different revenue streams:

1. Renewable generation incentive: all electricity produced is monetized, regardless of its end destination

2. Grid injection revenue: the produced energy injected into the grid is paid an export tariff 3. Self-consumed electricity: PV energy consumed locally, results in a saving of imported

electricity.

In some countries all three revenue streams applies making PV investments very convenient, resulting in an installation boom. As the cost of those schemes became too high and the penetration of PV started causing technical issues, such incentive schemes have been or are being withdrawn making residential PV investment less attractive. However the big fall in technology cost is still keeping the investment worth in some cases, with the concept of grid parity has been reached in many countries.

As far as PV generation is concerned, seeking help and synergy from storage it’s a popular topic in the academic and commercial world. In the current situation of falling incentives towards PV, the addition of a storage system to increase self-consumption could make the overall investment more profitable and also more resilient to future energy policies development. This would help families to lower their electricity bills while promoting a more sustainable growth of renewable energy. The influence of storage devices on the profitability of residential PV projects has been assessed in many studies with controversial results, although they all convey in defining some conditions that would make the overall investment attractive.

In Germany, which due to its high electricity prices at times of decreasing PV modules cost became one of the first country to reach grid parity, the installation of PV-battery systems in private households is aimed at increasing self-consumption of the PV energy, and thereby the home owner’s self-sufficiency. Now that PV generation incentives are being phased out and there are even limitation to the amount of energy that can be feed-in to the grid, PV-battery systems are expected to be profitable in a few years even without incentives due to decreasing investment costs (Kaschub, Jochem, & Fichtner, 2016).

An Italian study concludes that energy storage associated with PV system is useful only when the relationship between supply and demand permits them to induce a significant increase of energy self-consumption. (Cucchiella, D'Adamo, & Gastaldi, 2016)

Another study focusing on the Italian electricity sector, concludes that PV-battery storage system are economically unsustainable compared to PV-only systems harnessing the Net-metering scheme. Even without this PV incentive scheme, the installation price for energy storage would need to come down considerably to make the addition of storage convenient (Abdin & Noussan, 2018).

Similarly, a Portuguese study concludes that self-consumption is already attractive, but storage is not a profitable solution, because battery investment is still too high, despite the cost reduction witnessed in recent years (Camilo, 2017).