Herwig Ragossing
Head of Business Development for Smart Energy in Latin America
NEC Energy Solutions
/
View from the Top

Storage Solutions to Stabilize Grid Capacity

Fri, 02/01/2019 - 11:49

Q: What makes NEC Energy Solutions the go-to company for Mexico’s transmission and distribution needs?

A: NEC Energy Solutions is one of the leading providers of completely integrated storage solutions with lithium-ion batteries for electricity grids in need of ancillary services for markets with high penetration of renewable energies or unstable grid infrastructure.
In Mexico this is certainly becoming an important issue given the surge in renewable energy and the fact that in certain regions the grid is not designed for high penetration of intermittent sources of energy generation. We see the Mexican market as a very strong area of opportunity for grid storage solutions.
The most recent studies on Mexican energy storage potential for the next 10 years show that almost 4GWh of storage capacity will be required to meet the country’s needs. This covers frequency regulation, transmission support, voltage support, peak shaving, load shifting and demand-charge management for the country’s industries. In Mexico, there are many opportunities to leverage the existing infrastructure to increase transmission capacity.
Q: How is the energy storage segment positioned in the Mexican market?

A: Energy storage in Mexico is in an early stage compared to the US or Europe. It is less developed than in other Latin American countries. It is not yet a very marketoriented segment; it is still in the stage where decisions are being made.
We have some potential projects in Mexico, especially in the renewable energy sector, but they are in early stages. Clients are currently studying various models to determine viability because the regulation in Mexico is not yet clear enough to define profitable business models. There is still a great deal of insecurity in the market. Everyone knows there will be many opportunities in Mexico but nobody yet knows how to make money from these projects. Clear regulations are needed so that investors feel secure in their investments.

Q: What are the comparative advantages of the GSS Grid Energy Storage Platform for renewable energy projects?

A: Whether this technology is used for grid stabilization or renewable energy integration, the same GSS platform can be used. The GSS platform evolved in the past mainly for short term energy applications like ancillary services due to the high costs of long-term energy storage. With falling battery prices in the last years, longer term storage applications became economically feasible and are now the most dynamic market. With renewable energy integration, long-term storage is necessary. In the last years, the energy storage duration of our products and those of our competitors increased significantly and we see at the moment storage durations up to 6 hours with our solutions as most attractive.

Q: How is NEC making the business case for energy storage beyond the additional cost for the developer?

A: At the moment, we are talking to many renewable energy companies in the Mexican market. We are carrying out simulations of business models for energy storage for our clients to support their project development efforts.
One of the most promising is the participation of renewable energy projects in the capacity market. Additional value can be generated for these projects if the developer is able to generate reliable capacity. Another interesting business case relates to demand charge management for industrial and commercial clients with battery installations behind the meter.
We are also talking to authorities in Mexico to incentivize a change in legislation in favor of including energy storage solutions for grid stabilization, such as frequency regulation. Ultimately, the regulation will be the important element that makes these business models feasible.