Aggregation of energy storage: new directions in energy management
In today’s release, our primary focus is on a highly relevant topic, particularly in light of recent regulatory changes. We’re discussing the aggregation model within the broader context of electricity storage. The concept of electricity storage has undergone thorough analysis over the years, spanning various sectors and contexts.
The significance of establishing suitable regulations and advancing technically efficient methods for storing energy derived from renewable sources (RES) without significant loss remains undisputed. This topic appears to be just as critical as the pursuit of ecologically sustainable means of energy generation and envisioning the future within this domain.
In our publication, our primary objective is to delve into the subject of energy storage aggregation in Poland. We aim to provide answers to the following questions:
- What exactly are energy storage facilities ?
- What regulations regulate the operation of energy storage facilities?
- What is electricity aggregation and who is it for?
- What regulations regulate the issue of electricity aggregation?
- What is electricity storage aggregation?
- Who are energy aggregators and who can become an energy aggregator?
- What are the directions in green energy management and how should the current state of development of the industry related to the aggregation of electricity storage be assessed?
Subsequently, we will center our attention on the endeavor to assess the existing legal frameworks and explore potential avenues for future action. We will also address whether the energy storage model we are adopting necessitates further legislative measures from our lawmakers, such as potential regulatory adjustments in the realm of construction law.
Electricity storage – what are they and why is their proper regulation so important from the point of view of the development of the renewable energy industry?
Electricity storage facilities, in simple terms, are devices designed to efficiently store electricity and ideally preserve the power previously acquired. In the context of renewable energy solutions, these facilities are meant to retain green energy generated earlier and make it available for use at a later time (for example, when a specific renewable energy system cannot produce the required electricity at that moment). The central concern in energy storage revolves around organizing an efficient energy storage model, addressing energy losses during storage, and minimizing the space (volume) required for storage in relation to the maximum energy capacity – essentially, it’s about storing the most electricity from renewable sources in the smallest space possible.
The storage of electricity harnessed from renewable energy sources is as crucial as the renewable energy installations themselves. It’s the ability to store previously generated energy that ensures energy security, economic predictability, and fosters a positive societal outlook regarding the broader advancement of the renewable energy sector and energy transformation.
When effective and secure methods for acquiring green energy are combined with equally favorable economic and business conditions for its storage, the entire solution becomes significantly more appealing in the market. This is in contrast to a scenario where one of the components, such as the network or storage, doesn’t function as expected. Consequently, the growth of the electricity storage industry within the context of the overall upward trajectory in the renewable energy sector is not only highly significant but also desirable and eagerly anticipated.
Electricity storage – legal definition
At this juncture, it’s pertinent to reference the legal definition of “electricity storage.” In accordance with Article 2, point 59 of Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019, pertaining to common rules for the internal electricity market and amending Directive 2012/27/EU, energy storage is defined as the postponement within the energy system of the final consumption of electricity relative to its generation or transformation into another energy form. This enables the storage of such energy for subsequent transformation back into electricity or use as another energy carrier. It’s worth commending the EU legislator for providing a clear, concise, and highly transparent definition. It’s a departure from traditional legislation where definitions are often complex and challenging to grasp.
Our national legal system also offers a definition in Article 3, point 10k of the Energy Law Act of 10 April 1997. According to this definition, electricity storage refers to an installation that allows for the storage of electricity and its integration into the power grid. Notably, both definitions are consistent and logically interrelated. It’s important to mention that our legislator has also introduced the term “energy storage” in general, allowing for energy storage in connection with other forms of energy sources, not just electricity. In line with Article 3, point 10ka of the Energy Law Act, energy storage is defined as an installation enabling energy storage, including electricity storage (effective from March 1, 2023).
Despite these definitions, it’s important to acknowledge that these legal provisions do not offer an exhaustive explanation of what energy storage facilities are. In the subsequent sections, we will elucidate the concept of electricity aggregation, its target audience, and delve into the essence of energy storage aggregation.
What is electricity aggregation and who is it for?
To clarify, let’s begin with the fundamental definition of “aggregation.” Aggregation is the process of combining selected components into a larger, unified whole. In simpler terms, it’s about bringing things together with respect to a particular subject. Armed with this understanding, we can proceed to define the concept of electricity aggregation. In this context, it entails a comprehensive series of actions aimed at consolidating various aspects of electricity into an organized, larger entity.
Electricity aggregation, in the context of electricity storage, primarily serves prosumers. These prosumers are individuals or entities interested in innovative solutions related to electricity storage. They also actively manage the renewable energy generated by their own installations and play a pivotal role in enhancing energy security within a specific area. The aggregation of electricity storage is intrinsically linked to the ongoing energy transformation and the continuous advancement and dissemination of renewable energy solutions. It represents the dissemination of the aggregation model in the context of storing energy from renewable sources, effectively filling a crucial gap in the puzzle of a comprehensive and sustainable system for generating and utilizing green energy in the long term.
What regulations regulate the issue of electricity aggregation?
When addressing the concept of electricity aggregation within the framework of legal provisions, it should be defined in a more precise and specific manner.
Aggregation of electricity within the meaning of EU legislation
According to Article 2, point 18 of Directive 2019/944, “aggregation” is defined as the function executed by an individual or entity, which involves the consolidation of various loads on behalf of consumers or electricity generated for the purpose of selling, purchasing, or auctioning on any electricity market.
Aggregation of electricity within the meaning of national legislation
It’s worth noting that the definition incorporated into the Polish legal framework is in alignment with the one proposed by the European Parliament and the Council. In accordance with Article 3, point 6e of the Energy Law Act, “aggregation” is defined as an activity that involves merging the power or electricity volumes offered by consumers, electricity producers, or owners of electricity storage facilities, considering the technical capacities of the network to which they are connected. This merging is done for the purpose of selling electricity, delivering system services, or offering flexibility services in electricity markets.
Furthermore, the Polish legislator has introduced definitions for both “aggregator” and “independent aggregator.” According to Article 3, point 6f of the Energy Law Act, an “aggregator” is described as a market participant engaged in aggregation on the electricity market. An “independent aggregator,” as defined in Article 3, point 6g of the Energy Law Act, is an aggregator not affiliated with the recipient’s electricity supplier and not part of a capital group as defined in the Act of February 16, 2007, on competition and consumer protection.
For a comprehensive understanding of this regulation within the scope of both national and intra-Community provisions, it’s essential to clarify that, according to EU regulations, an independent aggregator is a market participant engaged in aggregation that has no affiliations with the recipient’s electricity supplier, as specified in Article 2, point 19 of Directive 2019/944.
The concept of energy storage aggregation pertains to the process of consolidating power or electricity intended for storage and subsequent use at a later time. In essence, it involves amalgamating different entities into a single entity for the purpose of electricity storage.
It’s important to note that aggregation is typically established through an aggregation agreement between the end user of electricity, the electricity producer, or the electricity storage facility owner, and the aggregator, as stated in Article 5a(1), section 1 of the Energy Law Act.
Watch out for the register of electricity storage aggregators!
The operation of an aggregator within the electricity market doesn’t necessitate the consent of other participants and grants the aggregator equal standing with energy companies and consumers. Thus, an aggregator can initiate its own business operations after registering its information in a dedicated aggregator register, electronically maintained by the President of the Energy Regulatory Office. It’s crucial to note that the aggregator’s entry is based on an application submitted by the aggregator.
The legal regulations pertaining to the Register of electricity storage facilities have been meticulously defined, including in Article 43g of the Energy Law Act. The power system operator maintains an electronic register of electricity storage facilities connected to its network, whether they constitute a part of it or are integrated into a generating unit or end-user installation linked to its network. This register contains various pieces of information, such as:
- Identification details of the electricity storage facility holder, including:
a) name and surname or name along with the legal form of the electricity storage holder;
b) place of business activity, registered office and its address;
c) PESEL number or tax identification number (NIP), if any;
2) marking of the electricity storage facility containing:
(a) identification of the technology used to store electricity;
b) data on the total installed capacity of the electricity storage facility, specified in kW;
(c) data on the capacity of the electricity storage facility, expressed in kWh;
d) efficiency of electricity storage;
e) maximum charging power expressed in kW;
f) maximum discharge power expressed in kW;
g) place of connection of the electricity storage;
h) indication whether the electricity storage is part of the generating unit or the end-user’s installation;
3) legal title to the owned electricity storage facility.
Who are energy aggregators and who can become an energy aggregator?
Energy aggregators are firms that engage entrepreneurs capable of adjusting or reducing a portion of their electricity or energy consumption. These aggregators play a crucial role in enhancing the overall profitability of energy networks associated with renewable energy sources. They serve as intermediaries, connecting prosumers (those who both consume and produce energy) with the operators of specific energy networks.
What should you do to formally become an energy aggregator?
An entity seeking to become an aggregator can submit an application to have its information included in the aggregator register. This entity can also enter into an agreement for the provision of aggregation services, which is typically formed between the end user, the electricity producer, or the owner of an electricity storage facility (with the latter being of particular significance in the context of this discussion).
What are the directions in green energy management and how should the current state of development of the industry related to the aggregation of electricity storage be assessed?
The regulations pertaining to the development of models based on electricity storage aggregation deserve significant praise. We appreciate the legislator’s consistency in introducing clear regulations, particularly at the definitional level. A comprehensive assessment of the legal consequences of these regulations will only be possible once electricity storage aggregators have been operational for some time. Currently, the period is too brief for a comprehensive evaluation, especially as certain regulations require further clarification. Of note is the frequently raised need to adapt other regulations to the evolving legal landscape, particularly concerning the formal obligations related to construction law provisions in the context of electricity storage.
The move to exempt certain formal requirements under construction law for energy storage facility implementation appears to be a step in the right direction to enhance the appeal and adoption of such solutions. We’ve witnessed a cyclical increase in legal regulations related to green energy production, and it’s now the turn for energy storage to receive attention. An amendment to construction law, aimed at increasing the capacity of photovoltaic installations to 150 kW (removing the obligation to obtain a building permit as per Article 28(1) of the Construction Law), is currently pending. This change will create opportunities for the construction of electricity storage facilities within the capacity limit, provided certain conditions are met. This solution is primarily intended for smaller entities, and questions arise regarding larger projects. Importantly, the legislator specifies that when connecting a micro-installation with electricity storage to the distribution network, the installed capacity of the electricity storage facility is not included if:
- installed capacity of electricity storage;
- total power that can be introduced into the distribution network by a micro-installation with electricity storage;
Certainly, this topic merits a dedicated publication to explore it in greater depth. If you have any more questions or need further information on this or any other topic, feel free to ask.
Summary and Conclusions
The measures undertaken by the national legislator, aligning with intra-Community regulations, demonstrate a positive direction towards greater liberalization and enhancing the appeal of comprehensive renewable energy solutions. While it’s too early for a complete assessment of the recent legal changes, the systematic efforts being made are praiseworthy and seem to be moving in the right direction.
It’s also worth acknowledging the clarity and simplicity of the fundamental definitions. Definitions can often be a source of confusion for the entities involved, so their coherence and simplicity are commendable.
Effective electricity storage from renewable sources is indeed as vital as the process of generating it. A well-resolved energy storage challenge will undeniably make renewable energy solutions even more appealing. Naturally, the key factors in this regard are the costs and the security of these solutions. We hope that the costs associated with electricity storage will become optimized to the extent that they don’t discourage a broader range of potential entities from implementing specific solutions in this sector. Additionally, it’s essential to anticipate and develop safe solutions – not only for those using energy storage facilities but also for the broader community. This includes considerations about the future disposal of old or malfunctioning storage facilities, making it crucial to address this issue comprehensively and with a long-term perspective in mind.