Ever wondered how thermal energy storages, like Polar Night Energy’s sand battery, can help save on heating expenses? We'll walk you through a simple real-world example that demonstrates their cost-saving power.
Energy storage is vital for the energy transition, but did you know that thermal energy storages can also significantly reduce heating costs compared to traditional sources such as natural gas, oil, coal, biomass or even heat pumps?
Case: Spa and its heating system, Finland
Energy storage: Polar Night Energy’s 2 MW thermal energy storage with a capacity of 200 MWh
Heat demand: Constant 500 kW
Time period: 16/8/2023 – 15/9/2023
Total heat needed during the period: 372 MWh
Electricity contract: electricity with spot pricing, per hourly market price
Costs: The sand battery is charged with electricity when spot prices are low, avoiding peak hours. This approach results in significantly lower costs compared to both direct electricity (average of spot price) and traditional combustion methods.
The following table shows the heating costs using different energy sources (without tax). The 'PNE spot' refers to the final price for purchased electricity used to charge the sand battery.
| Source | Heat price EUR/MWh | Total cost EUR |
|---|---|---|
| PNE spot | 11 | 4,170 |
| Direct electricity | 86 | 30,980 |
| Heat pump (COP 2.5) | 34 | 12,390 |
| District heating | 90 | 32,450 |
| Natural Gas | 70 | 25,240 |
| Oil | 125 | 45,060 |
If you want to see how PNE spot is formed, keep reading!
Method: There are two important parameters for the sand battery:
Charging power versus heat demand (share of charging hours)
Capacity (time scale for charging)
In this case, the storage has 2 MW charging power, and the heat demand is constantly 0.5 MW. That is, we need to charge 25% of all hours.
With this heat demand, the natural time range for the storage is 15 days.
Hence, from every 15-day slot, the storage must charge 25% of the time to fulfil the heat demand. In this simple computation, we get the price 11 EUR/MWh with the following procedure:
Divide the time to 15-day slots,
from each slot, choose 25% * 15 days = 181 cheapest hours and
compute the average spot price for the chosen hours. This is the final ‘PNE spot’.
The figure 1 illustrates the charging cost of the sand battery over time. During 75% of the time, the sand battery is not charged, with PNE spot at 0 EUR/MWh. In the remaining 25% of hours, PNE spot mirrors the spot price, resulting in peaks in the PNE spot curve. The highest spot prices are effectively avoided.
Figure 1. The charging cost of the sand battery over time.
The greater the charging power is compared to the heat demand and the greater the capacity is, the lower the PNE spot price will be. Fewer charging hours allow us to focus on cheaper times, while greater capacity provides more flexibility in selecting charging hours.
Keep in mind that when calculating the cost of produced heat, it's necessary to adjust the prices using the efficiency coefficient, which can reach up to 95% for our heat storage. You can find more details in our Lead Scientist's blog article.
Furthermore, the sand battery's flexible electricity usage enables participation in grid balancing markets, potentially reducing your heating costs significantly. Curious to learn more? Stay tuned for our upcoming post on FCR and FRR markets!
The Next Step: A Feasibility Study
The calculation above is a simplified representation of a basic use case. Interested in a thorough and transparent analysis of your energy system, complete with realistic simulations and intelligent charging algorithms? Our feasibility study evaluates your system's needs, including local energy production and storage, for optimal performance.
Visit our Solutions page for details!
Text: Terhi Moisala, Data Scientist
Sources for energy prices: Finnish day-ahead electricity prices, ENTSO-E Transparency Platform, Statistics Finland
This article was conducted under the project NewSETS – New energy storages promoting sustainable energy transition in societies.
This project has received funding in the framework of the joint programming initiative ERA-Net Smart Energy Systems’ focus initiatives Smart Grids Plus and Integrated, Regional Energy Systems, with support from the European Union’s Horizon 2020 research and innovation programme under grant agreements No 646039 and 775970.
The content and views expressed in this material are those of the authors and do not necessarily reflect the views or opinion of the ERA-Net SES initiative. Any reference given does not necessarily imply the endorsement by ERA-Net SES.