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site.btaEnergy Storage Batteries Are by 90% Cheaper than 15 Years Ago - Expert

Energy Storage Batteries Are by 90% Cheaper than 15 Years Ago - Expert
Energy Storage Batteries Are by 90% Cheaper than 15 Years Ago - Expert
Nikola Gazdov, Board member of SolarPower Europe and head of the Association for Production, Storage and Trading of Electricity (BTA Photo)

It is very important to install energy storage batteries. Their cost has fallen dramatically in recent years: by over 90% in 15 years, said Nikola Gazdov, Board member of SolarPower Europe and head of the Association for Production, Storage and Trading of Electricity (APSTE). In an interview for BTA, he commented on the trend of low or negative prices on the energy exchange due to the large production of electricity from renewable energy sources (RES) at certain times of the day.

In his words, the argument that batteries are expensive is no longer valid. Moreover, a lot of work has been done in Bulgaria and the region in recent years to develop a regulatory framework to create conditions for this type of investment. That is why the first battery installation projects are already being prepared in Bulgaria. "I expect to see the effect of this very soon," Gazdov noted. 

The APSTE head stressed that batteries will help to improve balancing at the system level and the management of these variable loads that come from RES. In addition, batteries will help investors and plant operators to improve their business model by storing the electricity produced when the market price is low and selling it at other times when it rises.

All countries in Southeast Europe have been betting on a rapid development of renewable energy in recent years. The first wave of projects on the market almost everywhere are solar plants, because they are faster from the beginning of development to project construction, Gazdov told BTA. He expects that in the coming years many new wind farms will join the grid in Bulgaria as well as in Greece, Romania, Serbia, Hungary and other countries in the region.

Lower prices on the energy exchange are not a problem for solar investors because they have to think long-term, Gazdov argued. The reason for the low and negative prices is because there are now indeed increased installed capacities of solar plants in Bulgaria, Greece and Romania. In Greece, there are already nearly 7,000 megawatts of solar power plants installed, and in Bulgaria there are over 3,000 MW. In Romania, too, more than 3,000 MW of electricity is produced by photovoltaic plants. These plants produce electricity from the sun at the same time because they are in the same region. When electricity is produced at the same time on days with low consumption, especially on weekends, it is normal for the price to be very low and even negative, because then there is less demand. However, this happens in transitional months - when it is warm enough not to use electricity for heating, but not yet too warm to use it for cooling, Gazdov pointed out.

According to him, negative prices are nothing new, but he hopes this phenomenon is temporary. In addition, more and more long-term contracts for the purchase of renewable energy are being signed. "Long-term contracts are a risk management tool - both for RES producers and industrial consumers. This type of contract gives predictability to all parties and protects them from market volatility," said the APCTE head. He also said that for new RES projects there are cases even in Bulgaria where contracts are signed for 10 or even 12 years. There are examples of Bulgarian power plants signing contracts to sell electricity to consumers in Romania and Hungary. In long-term contracts, in most cases the price is fixed for a long period of time, Gazdov explained. The models may be different. There are variants where the so-called baseload is sold and the risk is shared in this transaction. This is a type of contract for difference.

The recent changes regarding the electricity balancing market, which introduced negative prices, should solve the problems with electricity surpluses, Gazdov believes. The reason is that no longer producing electricity according to the forecast schedule comes with a very serious financial penalty. "Separately, these low prices and changes in the market have given a very strong market signal for investment in batteries," he added.

Asked if there are problems with connecting newly built solar plants to the grid, Gazdov replied that the Bulgarian grid is extremely well sized, because it was designed years ago to provide electricity for large industrial production. "We have no problems with the capacity of the grid as such, but there are projects that are planned to be built in certain places in the country where the grid is not strong enough. You can look at Southern Bulgaria. There are great conditions for new solar plants there, but the grid is weaker because historically there hasn't been much industry there," Gazdov explained. He said there is a lot of interest in building wind projects in Northeastern Bulgaria, where the grid is not weak but needs to be significantly strengthened to accommodate these new loads when they are built. He added that the situation is similar in Romania and Greece. 

In his view, the network needs development in certain regions, but overall it is quite good, especially the Bulgarian network. Separately, the Electricity System Operator (ESO) is working to increase the capacity of the grid. From this point of view, there is no major problem, but it is important to note that the more new renewable energy sources are introduced - both from solar and wind - the more new challenges there will be for the power system.However, these new challenges do not mean that there will be a breakdown in the system or any serious problems, only that there will need to be a period of adjustment, Gazdov specified. He expects there to be challenges, but believes they come with many opportunities. "These are opportunities for Bulgaria to use its natural assets and strong grid to regain and consolidate its position as a regional leader and exporter of green energy in the future," he told BTA.




By 18:43 on 14.06.2024 Today`s news

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