The Role of Battery Storage in Grid Balancing

A complete guide about how BESS systems contribute to the stability and flexibility of the Romanian electrical grid, together with a detailed roadmap for developing energy storage projects from concept to operation.

Challenges of the Romanian Electrical Grid

Romania's electrical grid is undergoing a radical transformation in the context of the energy transition. Infrastructure built in the '60s-'80s for large, predictable plants (hydro, coal, nuclear) must adapt to an energy mix dominated by variable renewable sources.

1. Explosive growth of solar energy

Romania added over 2,000 MW photovoltaic capacity in 2024, mostly in large parks (10-100 MW). This growth creates major challenges:

• Duck curve phenomenon: Massive solar production in hours 10:00-16:00 → low or even negative prices → need for storage/export
• Evening ramp: Sudden drop in solar production after sunset → high demand → deficit → need for rapid reserve startup
• Cloud transients: Rapid variations (minutes) in solar production due to clouds → need for fast balancing services

2. Wind energy development

Romania has 3,000 MW installed wind capacity, with significant expansion plans:

• Onshore wind parks in Dobrogea, Moldova, Banat
• Offshore projects in the Black Sea (2,000+ MW in pipeline)
• High variability: capacity factor 25-35%, with swings of 50-100% in a few hours

3. Reduction of flexible conventional capacity

Romania is gradually closing coal plants (Rovinari, Turceni, Mintia) for environmental and economic reasons, reducing black-start capacity and grid inertia:

4. Increasing frequency and voltage requirements

ENTSO-E standards require maintaining frequency at 50 Hz ± 0.2 Hz under normal conditions. Reduced inertia due to growth of renewable sources (without rotating masses) makes frequency more volatile:

• Rate of Change of Frequency (RoCoF): Increase from 0.5 Hz/s to 2+ Hz/s in extreme scenarios
• Need for FCR reserves with response under 2 seconds (BESS ideal)
• Voltage problems in distribution networks with high photovoltaic penetration (over-voltage)

Role of BESS Systems in Grid Balancing

Battery energy storage systems (BESS) are the optimal technological solution to respond to the listed challenges. Here's how BESS contributes to grid stability:

1. Fast frequency balancing

BESS can respond in under 1 second to balancing commands, much faster than any conventional plant:

This fast response capability makes BESS ideal for FCR and AFRR services, where time is critical.

2. Perfect bidirectionality

BESS can both supply and absorb energy in the following seconds, a unique capability:

• Up-regulation: Power injection into grid when frequency decreases (energy deficit)
• Down-regulation: Power absorption from grid when frequency increases (energy surplus)
• Instantaneous transition: From +15 MW to -15 MW in under 1 second

Pumped hydro plants have similar capacity, but with transition times of 1-3 minutes and lower efficiency (70-80% vs 90% for BESS).

3. Voltage and reactive power support

Modern BESS system inverters can provide reactive power (Var) independent of active power (W), contributing to:

• Maintaining voltage within acceptable limits (±10% of nominal 110 kV/20 kV/0.4 kV)
• Power factor correction (cos φ)
• Reduction of grid losses
• Avoiding investments in static compensators (STATCOM, SVC)

4. Reduction of grid congestions

BESS strategically positioned in congested areas can:

• Absorb excess energy from local solar parks (instead of being curtailed or exported with losses)
• Supply energy locally during peak hours (avoiding long-distance transport with 5-8% losses)
• Defer investments in grid upgrades (new lines, transformers) by 5-10 years

Example: Zalau area (Battery.Network site) has 300+ MW solar production but only 50 MW local consumption. Without BESS, 250 MW surplus must be transported on 110 kV line Zalau-Jibou which has limited capacity → curtailment or negative prices. With 15 MW / 30 MWh BESS, excess energy can be stored and supplied locally in the evening.

5. Black-start and grid-forming capabilities

Advanced BESS systems can operate in grid-forming mode, creating frequency and reference voltage themselves:

• Black-start: Starting the grid after total blackout, without external source
• Microgrid operation: Autonomous operation of isolated area (island)
• Synthetic inertia: Emulation of mechanical inertia of conventional generators for frequency stabilization

These capabilities become critical as conventional plants (with large rotating mass) are shut down.

Flexibility Services Offered by BESS

BESS systems offer a complete portfolio of flexibility services to grid operators and market participants:

Renewable Energy Integration Through BESS

One of the most important roles of BESS is facilitating massive integration of renewable energy into the electrical grid.

The problem: Renewable production variability

Solar and wind energy are intermittent and non-dispatchable:

• Solar: Zero production at night, maximum production at noon, rapid variations due to clouds
• Wind: Wind-dependent production, can vary from 0% to 100% in a few hours
• Mismatch with demand: Peak consumption is evening (18-22h) when solar production is zero

The solution: Time-shifting and smoothing with BESS

1. Time-shifting (energy displacement in time)

BESS allows storing energy when abundant and releasing when scarce:

• Charging in hours 10:00-16:00 when solar production exceeds demand
• Discharging in hours 18:00-22:00 when demand is maximum and solar is zero
• Effect: 60-80% reduction in need for gas backup plants

2. Smoothing (variation smoothing)

BESS can attenuate rapid fluctuations in renewable production:

• Absorbing production spikes when wind suddenly increases
• Compensating drops when clouds cover solar parks
• Reducing grid stress and extending equipment lifetime

3. Curtailment avoidance

Without storage capacity, excess renewable production must be curtailed (forced shutdown):

• Romania curtailed over 500 GWh renewable energy in 2023 (equivalent 50 million EUR lost)
• Curtailment is highest on weekends and holidays (low consumption + high solar production)
• BESS can absorb curtailed energy and sell it later at high prices

Case study: Solar integration in Zalau Area

BESS Impact on Grid Stability

Beyond frequency balancing, BESS contributes to overall electrical grid stability through multiple mechanisms:

1. Synthetic inertia

In traditional grids, inertia comes from rotating masses of generators (turbines, alternators):

• Inertia constant (H): 2-6 seconds for large plants
• Total Romania inertia: ~40,000 MWs (megawatt-seconds)
• Inertia effect: Slowing rate of change of frequency (RoCoF) during imbalances

As conventional plants are replaced by renewables (without rotating masses), inertia decreases:

• 2030 projection: Total inertia drops to 25,000-30,000 MWs
• RoCoF increases from 0.5 Hz/s to 2+ Hz/s
• Risk of cascade trip (automatic generator disconnection when RoCoF > 2 Hz/s)

BESS with advanced control can emulate inertia through Fast Frequency Response (FFR) algorithms:

• Frequency deviation detection in 20-50 milliseconds
• Power injection/absorption proportional to RoCoF
• Effectively "slowing" frequency fall/rise, giving FCR reserves time to take over

2. Reduction of spinning reserve needs

Transelectrica maintains spinning reserves (plants operating below maximum capacity, ready to increase production immediately). Their cost is high:

• Low efficiency (turbines operated sub-optimally)
• Unnecessary CO₂ emissions
• Accelerated equipment wear
• Cost: 30-50 EUR/MW/hour for reserve maintenance

BESS can replace spinning reserves with near-zero operational costs:

• No need to keep running (marginal cost zero when not activated)
• Can supply maximum power instantly (vs 10-30 MW/min ramp for turbines)
• 30-40% reduction in spinning reserve needs for every 100 MW BESS installed

3. Resilience to extreme events

Geographically distributed BESS systems increase grid resilience to:

• Cyber attacks: Local backup in case of centralized command compromise
• Extreme weather events: Storms, floods, freezes → BESS can support isolated areas
• Critical equipment failures: 400 kV line trip, transformer → local BESS prevents cascade blackout

Battery.Network strategically positions its 3 sites (Zalau, Seini, Satu Mare) to offer geographic redundancy and support in critical areas.

BESS Project Development Cycle

Developing a BESS project from concept to operation takes 18-36 months and goes through multiple complex stages:

Connection Requirements to Transelectrica Network

To participate in balancing markets, a BESS system must connect to the transmission network (110 kV or 400 kV) and meet strict technical requirements according to Romanian Grid Code.

1. Performance technical requirements

2. Resilience requirements (Fault Ride Through)

BESS system must remain connected to grid during voltage sags (temporary drops):

• LVRT (Low Voltage Ride Through): Remains connected at voltage drops to 0% for 150 ms
• HVRT (High Voltage Ride Through): Remains connected at voltage increases to 130% for 1 second
• Frequency ride-through: Continuous operation at 47.5-51.5 Hz frequencies

3. SCADA communication with CND

Real-time connection with Transelectrica's National Dispatch Center (CND):

• Communication protocol: IEC 60870-5-104 or IEC 61850
• Update rate: 2-4 seconds for telemetry, <1 second for commands
• Monitored parameters: P, Q, V, f, SOC, availability, alarms
• Received commands: Active/reactive power setpoint, start/stop, mode selection

4. Electrical protections

• Minimum protections: over/under voltage, over/under frequency, over-current, earth fault
• Differential protections for 110/0.4 kV transformer
• Anti-islanding protection (automatic disconnection if grid connection lost)

BESS Project Financing

A 15 MW / 30 MWh BESS project requires investment of 4.5-6 million EUR. Typical financing structures include:

1. Project Finance (70-80% debt + 20-30% equity)

Dominant model for large projects (>10 MW):

• Senior debt: Bank loan or bonds, 5-7% interest, 10-12 years maturity
• Sponsor equity: Developers, strategic investors, energy funds
• Security: Asset mortgage, revenue contract assignment, performance guarantees
• Covenants: DSCR > 1.3x, gearing < 80%, distribution lock-up if DSCR < 1.2x

2. Balance Sheet Financing

Companies with strong balance sheet finance from own resources:

• Advantages: Speed (no bank due diligence), flexibility
• Disadvantages: Capital immobilization, concentrated risk

3. Strategic partnerships

JVs between developers and:

• Renewable energy producers: Co-location BESS + solar/wind
• Utilities: Access to clients, grid operation experience
• Battery manufacturers: Preferential supply agreements, technical support

4. Grants and incentives

Romania offers limited support for BESS:

• NRRP Investment C1.I1: 300 million EUR for BESS (maximum 40% of investment)
• Conditions: Mandatory AFRR/FCR participation, demonstrated CO₂ savings, Green Deal compliance
• Competition: High demand, allocation based on technical + financial criteria

Battery.Network develops projects without subsidies, relying on intrinsic economic viability (28% IRR over 10 years).

Operational Phase: Optimization and Maintenance

After commissioning, efficient BESS operation requires continuous optimization and proactive maintenance.

1. Energy Management System (EMS)

EMS software is critical for revenue maximization:

• Forecasting: DAM/IDM price prediction with ML models (LSTM, XGBoost), accuracy >70%
• Optimization: Dynamic capacity allocation between AFRR, FCR, arbitrage for profit maximization
• Automated trading: Automatic order placement on OPCOM when conditions met
• Risk management: Stop-loss, position limits, degradation constraints

2. Predictive Maintenance

Advanced monitoring for failure prevention:

• Battery diagnostics: Tracking cell voltage imbalance, impedance growth, capacity fade
• Thermal monitoring: Hotspot detection, HVAC performance verification
• Inverter health: Harmonic analysis, efficiency tracking, component aging
• Planned interventions: Battery replacement at 80% SOH, inverter servicing at 30,000 hours

3. Performance Reporting

Reporting to investors and stakeholders:

• Financial KPIs: Revenue (AFRR, FCR, arbitrage), EBITDA, cash-flow, DSCR
• Technical KPIs: Availability, throughput (MWh cycled), battery SOH, failure rate
• Impact KPIs: CO₂ savings, curtailment avoided, grid stability contribution

Future of BESS-Based Electrical Grid

Romania is at the beginning of a profound transformation of electrical infrastructure, with BESS playing a central role.

2025-2035 Projections

Technology trends

• Solid-state batteries: +50% energy density, increased safety, commercialization after 2028
• Long-duration storage: Flow batteries, compressed air, hydrogen for 8-24 hour storage
• Virtual Power Plants (VPP): Aggregation of hundreds of small BESS + solar + EV into virtual plant
• Blockchain & P2P trading: Decentralized platforms for energy trading between prosumers

Conclusion

Battery energy storage systems (BESS) are not just a complement to the electrical grid, but essential infrastructure for transition to a decarbonized energy system, based on renewable sources.

BESS role in grid balancing is multidimensional:

• Providing balancing services (FCR, AFRR, mFRR) with superior performance
• Facilitating massive solar/wind energy integration through time-shifting and smoothing
• Increasing grid stability and resilience through synthetic inertia and rapid support
• Reducing system costs by replacing expensive spinning reserves

Developing a BESS project is a complex process (18-36 months), but economic and impact rewards are substantial. With favorable regulatory framework, declining costs and profitable balancing markets, Romania offers one of the most attractive BESS investment opportunities in Europe.

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