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The Outdoor Economic Miracle: Lucrative energy trading & high cycle stability thanks to high-temperature cells.
Balancing power is one of the key elements for participating economically in the electricity market with a battery storage system. TESVOLT Energy pools battery storage systems into a virtual power plant and markets their flexibility across different markets – both on the wholesale market and on the balancing power market. By intelligently allocating the available capacity across the markets, the revenue potential for investors can be maximised without the need to install additional storage capacity.
In the European interconnected grid, the target frequency is 50 hertz. To maintain this, electricity generation and consumption must be kept in constant balance. If an imbalance arises, the grid frequency deviates from this target value – in extreme cases, this can lead to grid instability or even a collapse.
The transmission system operators 50Hertz, Amprion, TenneT and TransnetBW compensate for such deviations using balancing power: positive balancing power offsets a power deficit, whilst negative balancing power offsets a power surplus. Part of this compensation must take place within milliseconds.
Three products, graded by response time – together, they keep the frequency stable.
Primary reserve
FCR
Frequency Containment Reserve
<30 sec.Activation
Secondary reserve
aFRR
automatic Frequency Restoration Reserve
< 5 min.Full activation
Power reserve
mFRR
manual Frequency Restoration Reserve
< 15 min.Activation
The capacity charge covers the mere availability of the service, whilst the energy charge covers the energy actually supplied when activated.
Battery storage systems can absorb and release power with virtually no delay – without the start-up or ramp-up processes required by conventional power stations. This makes them particularly well-suited to reliably meeting the short response times – sometimes measured in milliseconds – required by the balancing power markets.
The pooled virtual power plant from TESVOLT Energy focuses on secondary control power (aFRR), as this offers the best economic fit for battery storage and, by comparison, enables the highest returns.
Primary control power (FCR) is also offered on a supplementary basis for larger, dedicated utility-scale assets via an individual pre-qualification process.
Tertiary frequency regulation (mFRR) is deliberately not marketed, as the additional effort involved does not justify the economic benefit.
TESVOLT Energy aggregates numerous decentralised battery storage systems into a virtual battery and enables their flexibility to be traded via three pre-qualified, competing trading partners – not only on the wholesale market (Wholesale/EPEX Spot) and not only for balancing power, but across both markets simultaneously.
The market to be served is determined dynamically for each control area based on what makes the most economic sense. Technically, optimisation is carried out for each control area; financially, the revenues from all control areas are pooled. This reduces the risk associated with individual sites and unlocks additional revenue potential (revenue stacking) that cannot be achieved through individual marketing alone.
Whilst traditional market operators usually only offer access to the balancing power markets from around 10 MW upwards, TESVOLT Energy provides this access from as little as 50 kW – by aggregating many small commercial storage systems into a virtual unit. Larger, dedicated utility-scale assets are pre-qualified on a case-by-case basis.
Requirement: own grid connection and meter
The battery storage system for trading and balancing power is billed via its own separate meter – independently of any existing photovoltaic system or the consumption of a business at the same grid connection point. This standalone metering model is, amongst other things, a requirement for the storage system's exemption from grid charges.
With the rapid expansion of battery storage in Germany, the supply of balancing power is growing faster than demand – as a result, the achievable revenues in the balancing power market are falling by a greater percentage than in the wholesale market. The wholesale market remains structurally volatile – and thus highly profitable – due to the continuing rise in the share of volatile renewable generators (currently over 60 per cent, forecast to exceed 70 per cent in the medium term). Cross-market trading ensures that a storage investment benefits from both of these developments.
We’re happy to provide you with a comprehensive insight into using our storage systems in your project.
Balancing power refers to the short-term supply or storage of electricity used by transmission system operators (50Hertz, Amprion, TenneT, TransnetBW) to compensate for deviations in the grid frequency from its target value of 50 hertz. This ensures that electricity generation and consumption remain in balance at all times within the European interconnected grid.
If the grid frequency deviates too greatly from the setpoint, this can, in extreme cases, lead to instability or even a grid collapse. The correction must sometimes take place within milliseconds – which is where control power comes into play.
Positive regulating power compensates for a power deficit in the grid by feeding additional electricity into it. Negative regulating power compensates for a power surplus by drawing electricity from the grid and storing it.
There are three products, categorised according to their response time: FCR (primary control capacity, under 30 seconds), aFRR (secondary control capacity, full activation in under 5 minutes) and mFRR (tertiary control capacity, under 15 minutes, manual activation).
FCR is remunerated solely via a capacity price for the provision of capacity alone. aFRR and mFRR are additionally remunerated via an energy price for the energy actually supplied on demand – in other words, capacity plus work.
Within the virtual power plant, the pooled battery storage system focuses primarily on secondary control power (aFRR), as this offers the best economic fit for battery storage and, by comparison, enables the highest returns.
Yes, but only in the case of larger, dedicated assets at utility scale, for which an individual pre-qualification is carried out. Smaller storage systems in the pool, from 50 kW upwards, do not participate in primary control power.
Cross Market describes the dynamic allocation of a battery storage system’s flexibility between the wholesale market and the balancing power market – depending on which is most economically viable. This maximises revenue without the need for additional storage capacity.
Many decentralised battery storage systems are aggregated into a virtual battery and traded via three pre-qualified, competing trading partners. Following the trade, the proceeds are redistributed to the individual storage systems – aggregation, trading, disaggregation.
Entry is possible from as little as 50 kW, whereas traditional marketers usually only enter the market from around 10 MW. Larger, dedicated utility-scale assets are pre-qualified on a case-by-case basis.
Technical aggregation always takes place on a control area basis. Financial aggregation is cross-control area: revenue from all control areas is pooled and distributed fairly. This reduces the risk associated with individual sites and unlocks additional revenue potential.
Yes. As TESVOLT Energy operates a virtual power plant, individual battery storage systems can be specifically allocated to on-demand power reserve, whilst others can be used for feed-in power reserve at the same time.
No. In addition to trades that are actually executed physically, there are also virtual, hardware-backed trades that are concluded before the actual delivery date. Even in the case of balancing power, the reserved capacity is not always utilised.
On average, the pool runs at around 1.7 cycles per day, though this may vary depending on market conditions. In addition, up to 0.8 cycles take place virtually, without actually placing any load on the hardware.
Systems ranging from 1C to 0.25C can participate in the pool, i.e. from a 1-hour to a 4-hour system. From an economic perspective, a 2-hour system is currently regarded as the safest and most economically viable option for the trading of balancing power and cross-market transactions.
The battery storage system used for trading and balancing power is billed via a standalone, separate meter – independently of the consumption of a business or a photovoltaic system at the same grid connection point. This metering model is, amongst other things, requirement for the storage system to be exempt from grid charges.
No, the Trading and Cross-Market model is a standalone investor model that operates upstream of the energy supplier’s meter and must not be integrated downstream of a business’s electricity meter. For regulatory reasons, it is not currently possible to combine this with self-consumption optimisation.
Many network operators and municipal utilities allow connection to the low-voltage grid. For example, the capacity of a storage network can be designed to remain within the VDE standard for low voltage, which significantly simplifies the planning permission process.
Yes, provided that these are clearly defined, physically separate hardware units – such as a separate battery cabinet with its own inverter for each investor. Simply dividing a shared container into power blocks without any physical separation is not recommended.
Yes. Interested partner companies must complete a certification process comprising two full-day training courses on trading/balancing power and technical installation. Only certified TESVOLT Energy Partners are granted access to the revenue calculator and are authorised to sell the product.
by Cicero Design