BESS in the Transmission Network in Brazil: Opportunity or Illusion?

By Danilo Barros, Specialist in Implementation, Operation, Maintenance, and Management of Power Generation Assets...

The use of Battery Energy Storage Systems, referred to in English as BESS, is gaining importance in Brazil, although this topic still faces several challenges, such as:

- The high cost of implementation;

- The absence of clear and specific regulation, leading to a new business model;

- Few applications adapted to the reality of the country.

BESS in the Transmission Network in Brazil: Opportunity or Illusion?

Even if only on a preliminary basis, evaluating various opportunities for applying these systems, such as: consumers with high demands and hourly tariffs, consumers with low reliability networks, integration with isolated or hybrid generation systems, and applications in microgrids or smart grids, we emphasize in this article the use of this type of system in the transmission network. Despite all the problems mentioned, this system has shown to be an application with high technical and economic potential, especially given some bottlenecks in the national interconnected system (SIN). We highlight some of the main technical and economic points that guided our choice.

Congestion in Critical Corridors

Brazil is currently experiencing significant renewable energy expansion but faces constraints in energy evacuation. Thus, during peak solar/wind generation and low local demand hours, there is a need for the National Electric System Operator (ONS) to limit generation, taking actions such as: Sub-optimal Operational Measures, Line Openings, and the well-known Curtailment, which has been excessively affecting investors in this sector.

The reasons for such a high curtailment scenario recently are linked to a series of factors, which we highlight: external unavailability caused by failures in some installation outside the generating complex, such as abnormal weather events, fires, or even lack of maintenance. Another reason is the limitation of transmission lines' capacity to transport energy and the moments when there is insufficient demand to absorb all the generation available at that moment, affecting the balance between supply and demand.

As a result, opportunities with battery energy storage systems have become increasingly prominent, as they can store energy generated during low-demand periods and assist in technical/economic strategies for releasing energy during peak times or higher tariffs, avoiding potential costly and time-consuming reinforcement of transmission networks.

Ancillary Services for the National System Operator (ONS)

The ONS needs all available functions beyond generation to help maintain the reliability, safety, and stability of the network, and today, a large part of these services is provided by Hydroelectric or Thermal Power Plants.

BESS has the capacity to provide these same services, particularly due to its flexibility and the possibility of rapid installation in strategically important areas from an energy perspective.

We highlight some of the main Ancillary Services where BESS can be useful:

- **Frequency Regulation**: BESS can act almost instantly to inject or absorb power and stabilize grid frequency, performing better than conventional generators (with mechanical inertia).

- **Spinning Reserve**: Instead of keeping thermal power plants "on standby," BESS can offer rapid reserves with a response time of less than 1 second. This reduces fuel costs and emissions, known as Synthetic Inertia.

- **Voltage Support**: BESS can provide reactive power to maintain stable voltage levels, especially in areas with significant load or generation fluctuations, operating as a synchronous compensator or virtual capacitor.

- **Black Start**: BESS can restart parts of the grid after a blackout, without the need for dedicated black start plants, allowing faster and more controlled operations in critical situations.

- **Congestion Control**: BESS can be strategically dispatched to avoid overload on lines, alleviating critical points and reducing losses.

- **Power Oscillation Modulation**: In events of electromechanical oscillations, BESS can act as a dynamic damper, quickly stabilizing the system.

Regulatory Challenges

Regulatory challenges are numerous, especially those related to the best way to compensate BESS.

Ancillary Services, which are primarily provided by Hydroelectric and Thermal Plants today, are under-remunerated or compensated inefficiently, which, instead of attracting investments, ends up deterring investors' interests.

For example, investments that are rejected by investors in Hydroelectric Plants include devices that allow Generating Units (UG) to operate as Synchronous Compensators (CS). Despite the fact that a UG, when operating as CS, reduces the wear and tear on equipment, this is an Ancillary Service that usually does not compensate for the investment, meaning the math does not add up!

In discussions in the Transmission Sector, the possibility of receiving an Allowed Annual Revenue (RAP) was raised, where the entrepreneur would be responsible for maintaining the availability of BESS. However, the issue remains the remuneration vs. the reflection of costs to the consumer.

Additionally, we can highlight the following regulatory challenges for BESS:

- **Lack of Regulatory Framework**: BESS still does not have a clear regulatory category in Brazilian legislation. The main question is:

BESS in the Transmission Network in Brazil: Opportunity or Illusion?