Regional energy industry leaders surveyed for the Black & Veatch Strategic Directions: Electric Industry Asia 2021 report cautioned, however, that the introduction of too much variable renewable energy may challenge reliable grid operations and performance across Asian electricity markets.

To improve grid reliability and resilience, one approach is to balance the variability of renewable energy with gas-fired power generation.

A second, more effective option would be integrating energy storage technologies like lithium-ion battery energy storage systems (BESS) at gas-fired facilities.

Such “hybrid” systems that combine generation with storage demand close consideration as variable renewable electricity generation increases in the generation mix.

Here are five reasons why Black & Veatch believes Southeast Asia’s electricity grid, its fuel-fired infrastructure, is primed for investments in BESS.

1. Fuel-Fired Generating Assets are Young. A lot of capital is invested in Southeast Asia’s relatively young, particularly gas-fired, power infrastructure. The large majority of the region’s 90+ gigawatts (GW) of facilities are well within their operational lifespans with approximately a third of generation capacity less than ten years old. Investors will seek to improve the returns and revenues from these facilities and extend their lifecycle.
   
   One way to extend the lifecycle of gas-fired infrastructure is to integrate it with BESS. For example, BESS with storage durations of one to four hours can be designed to avoid turbine operation when short duration run times are forecasted. In simple terms, reducing the number of gas turbine starts and stops can translate to longer operating life – measured in years – and reduced wear and tear – measured in lower costs. The same applies to reducing the steepness or magnitude of ramping required, which is increasingly happening as more variable renewable energy is added to the grid. In some cases, grid demands increase beyond the existing capability of gas turbines to follow.
   
   Survey findings from the Electric Industry Asia 2021 report show that Asia’s power sector leaders expect a future for gas-fired power generation beyond 2035, with 67 percent of respondents believing gas will feature as a significant component of the grid. (See Figure 1)

2. Grid Resilience. Grids are more complex to manage than ever before. Not only is load varying, as it has always been, but now generation is also varying. This creates real challenges for grid operators today and tomorrow. Increasing amounts of distributed energy resources – both new variable generation (e.g. renewable energy) and new variable load (e.g. electric vehicles) – put strain on the grid. The grid can be knocked off balance – sometimes suddenly – when large loads from industrial customers come online or when solar generation disappears as a period of cloud cover occurs. As the generation and load imbalance increases, the alternating current (ac) frequency of the grid can deviate from its nominal operating point. Fast, flexible generation sources are needed to address grid imbalance and restore the grid to normal frequency operations.
   
   Adding BESS at existing gas-turbine plant substations is an effective means to provide rapid Automatic Generation Control and frequency regulation with milder ramp rates, shorter run times and fewer starts and stops for the gas turbine fleet. Automatic Generation Control systems adjust generation and load variations to achieve optimal grid performance.
   
   BESS can also serve as a black start resource to harden the grid against extreme weather events like storms. Black start is the reboot of the power system after it suffers a complete collapse.
    
3. Improved Plant Performance. Gas turbines have long played a central role in helping supply meet demand, given their ability to quickly flex, ramping up or down following demand peaks and valleys. Efficiency is diminished however, when running above or below its optimal point. With battery storage-augmented gas turbines, the storage performs as a new kind of reserve that springs to life immediately to smooth and optimize turbine performance levels. This can eliminate the need to operate with high rates of duct firing and provide a means of displacing higher heat rate dispatch during the hottest part of the day when gas turbine efficiency is lowest.
    
4. Improving Assets’ Sustainability. Adding BESS to a gas-fired generating asset can play a role in addressing sustainability challenges facing infrastructure owners. Integrated BESS is an effective way to offset and reduce overall emission rates at the existing gas-fired plants. Such investments will reduce future pressures to decommission and avoid near- or mid-term scenarios where gas facilities become stranded assets.
   
   As we continue to emerge from the uncertainties surrounding the COVID-19 pandemic, such investments that extend the lifecycle of power plants and take greater advantage of existing assets are going to feature prominently in power developers’ and utilities’ mid- and long-term planning.
    
5. Economics. Like solar and wind technologies, the capital cost for lithium-ion battery systems continues to decline year over year. Consumer demand for mobile devices and electric vehicles is driving down the cost for BESS because they share the same lithium ion cells and benefit from the economies of scale of these two huge markets. Battery storage is approximately 75 percent less expensive than it was ten years ago and projected to be less than half of today’s price by the end of the decade.
   
   As more and more variable renewable energy is added into the grid throughout the world, we are seeing the capacity factors of base-load generators (the amount of electricity produced versus the generator’s maximum potential) also decreasing. This is leading to significant revenue erosion over time and less efficient operation that in turn leads to increased fuel consumption and higher emissions. Integrating BESS can diminish this growing impact.
   
   In addition, when the BESS is not operating for the gas turbine, it can also participate in ancillary services markets for grid support, providing power quality services, frequency regulation, and primary and secondary frequency reserves, representing additional revenue as local electricity markets allow.
   
   Co-locating BESS at a combined-cycle power plant (CCPP) substation will provide access to very large Point of Interconnection (POI) that enables installation of larger BESS, further optimizing economies of scale.
   
   Finally, although domestic gas production and supply is declining in the region, the long-term cost model for LNG importation as a fuel source looks favorable.  Therefore, gas turbine facilities will continue as viable commercial assets and key parts of the energy mix in Southeast Asia.

Bonus Reason: Speed to Market. One of the great advantages with BESS is that it can be deployed quickly delivering immediate impact. The quick deployment of BESS is critical to mitigate fuel supply disruptions or grid planning problems. There is limited BESS in operation in the region today, but the hybrid solution, BESS added to existing generation, has been proven from demonstration projects to full deployment at a number of facilities in the United States, Germany, and other markets. Megawatt (MW) scale deployment of BESS is known to be achieved in less than 100 days from contractual agreement to commissioning.

Beyond retrofitting assets for additional use cases with BESS, it can be deployed for new builds or for repowering builds with new gas turbines that extend the life of the facility. For the foreseeable future, lithium-ion battery energy storage systems will provide the lowest capital cost energy storage option for power utilities and developers in Southeast Asia. While energy storage costs are as inexpensive as ever, the equipment is not cheap. Therefore, minimizing the amount of the energy storage in any single solution will remain critical for operators across a variety of use-cases, balancing the trade-off between investment and return that these new, hybrid systems bring to the market.

 

*Southeast Asia, or ASEAN (Association of South East Asian Nations), comprises of ten countries including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam.