Battery Storage Solutions for Flexibility and Frequency Control: Addressing Instantaneous Reserve Needs in Austria

Abstract

This master’s thesis explores the critical role of instantaneous reserves in the evolving landscape of Austria's electrical grid, particularly as reliance on conventionalsynchronous generators diminishes. The entire energy supply in Europe is changing and there is no way around climate-friendly and sustainable resources for the generation of energy in the future.With hydropower serving as a primary energy source in Austria, the existing framework provides a significant level of natural inertia that contributes to maintain the required 50 Hertz for the grid stability. However, the anticipated surge in volatile photovoltaic (PV) and wind energy installations, coupled with the planned phase-out of gas-firedpower plants, poses significant challenges to maintaining this stability and increasing the demand for instantaneous reserves.The integration of Austria's electrical grid into the Continental European synchronous area further complicates these dynamics, spotlighting the importance of frequencystability across borders. This study highlights the escalating need for ancillary services,particularly instantaneous reserves, which are crucial yet currently uncompensated in Austria, in contrast to compensation mechanisms in other regions such as Ireland and Great Britain.In examining the potential of lithium-ion batteries to provide rapid reserves, the thesis affirms their technical suitability for delivering fast-acting control power and enhances the overall flexibility of the energy system. However, it reveals substantial economic barriers related to high investment costs and inadequate remuneration rates for battery energy storage systems (BESS) in Austria. Through a comprehensive technoeconomic model, the investigation establishes that, despite possible future increases in remuneration, the net present value (NPV) of BESS projects remains negative under current market conditions.Ultimately, the research calls for establishing a dedicated market for instantaneous reserves and adjusting regulatory frameworks to enable grid operators to managebattery assets effectively. These recommendations are essential for leveraging the potential of battery storage in