Why Brazil’s Quantum Participações is studying energy storage

Operator of transmission lines in four Brazilian states, Quantum Participações is developing a research project into energy storage.

The aim is to create a methodology on how to integrate batteries into the basic power transmission grid. 

In this interview with BNamericas, Quantum's regulatory and institutional superintendent, Fábio Marques, explains the project and analyzes the sector's challenges.

BNamericas: What are Quantum's main ongoing projects?

Marques: We currently have 100% of the concession contract for the Sertaneja transmission line, in the states of Bahia and Piauí, and 50% of three other contracts in partnership with Cymi: Chimarrão and Pampa, in Rio Grande do Sul, and Mantiqueira in Minas Gerais. 

There’s an option, within the partnership model, for us to buy the other 50% in these projects.

BNamericas: Is your participation in transmission auctions exclusively with Cymi? Do you consider other partners? 

Marques: Normally, we go into the auctions in partnership with Cymi. It's not an exclusive model, so it's possible to have other partners.

BNamericas: Do you intend to take part in the auction in September? Does it have any particularities? 

Marques: We always evaluate future auctions. This next auction had a lot, number 2, which was taken out due to the floods in Rio Grande do Sul. It's a lot that would have synergies with our portfolio. 

There’s also a lot that involves the rebidding of assets whose contracts are in their final stages. This is unique, it's not unprecedented, but it's not usual. It's usual to bid for greenfield [projects], and in this lot there's a mixture of greenfield and brownfield. 

BNamericas: Does the increased frequency of extreme weather events affect the power transmission sector? 

Marques: This affects everyone. Before, they were sporadic events, now they’re frequent phenomena. Not just rains in the south, but drought in the north and northeast, which affect transmission assets via fires. 

We’ve been discussing contingency plans. You can have a pre- or post-event vision. [Electric power watchdog] Aneel has focused on dealing with post-events. Looking ahead means strengthening the assets. That should be left for the near future. Are assets built in the 1970s and '80s prepared for the new reality? Not only Aneel, but [energy research company] EPE must assess what kind of engineering solution will be needed.

BNamericas: Quantum is developing a research and development project on the insertion of energy storage systems into the basic transmission grid. Could you talk about the initiative?

Marques: The idea is to develop and deliver to EPE a methodology on how to integrate energy storage systems into the basic grid, considering the benefits and costs of this integration. 

The methodology will have to answer whether, at a given point in the electricity system, it is advantageous to insert batteries, pricing the benefits generated by the solution in the planning phase.

We’re preparing a price database to be used by EPE and also as a starting point for Aneel to establish its own price database, if necessary.

The insertion of storage systems in the basic grid means that the equipment is under the control of the ONS to help it operate the grid, also avoiding possible conflicts of interest in its use.

BNamericas: What would these conflicts be?

Marques: Conflicts of interest between the investor and systemic interests. The battery is like a Swiss army knife, it has several applications. It can be used to control voltage and frequency, which are systemic interests, or to store energy when it's cheaper and sell it when it's more expensive, which are investor interests.

BNamericas: Is this the kind of issue that makes the participation of battery solutions in the next backup capacity tender complex?

Marques: You have to define the product to be auctioned very well. The benefits must be identified and dealt with before the auction. For the application in the transmission sector, the investor will receive a RAP [permitted annual revenue] to remunerate the asset, and it’s forbidden to use it in any way other than that previously defined, in addition to there being no conflict when using it, given that its operation is coordinated by the ONS.

BNamericas: What challenges does the strong expansion of renewables in Brazil impose on the transmission sector?

Marques: The sudden variation in load creates major challenges for the ONS. Battery systems could help reduce the large variation between low and high load, smoothing out the so-called duck curve. 

[Editor's note: The duck curve depicts the strong variation in load in regions with high use of solar energy, where there is a drop in demand during the day, and a rise in consumption as the sun goes down.] 

BNamericas: Is the transmission grid prepared for green hydrogen projects to enter the system in the future?

Marques: This will generate a new need to study the system and evaluate possible expansion. 

There will be large blocks of cargo in coastal regions, in ports, demanding energy for these regions. 

The issue of [energy-intensive] datacenters is similar. But they can be anywhere in the country.