Opportunities and challenges of integrating battery energy storage in the electricity grid – perspectives from distribution system operators

Abstract

Extended abstract 2-237-26 Battery energy storage systems (BESS) are viewed as a multifunctional technology that can support a low-carbon, resource-efficient electricity system and enable further industrial electrification. In an electricity grid context, BESS is highlighted as a potential tool to alleviate capacity bottlenecks, maintain voltage levels, supply reactive power, and provide black-start support. Distribution system operators (DSOs) are central to the realization of BESS as a grid resource, but electricity market rules prohibit them from owning storage assets, meaning they must collaborate with third-party providers to acquire BESS services. A better understanding of the challenges and prospects they associate with BESS, as well as their potential interactions with BESS companies, is therefore vital. To address this gap, this study employs semi‑structured interviews with DSOs in southwestern Sweden to examine their perspectives on integrating BESS into distribution grids. The region was selected as a representative case of a grid area characterized by capacity constraints and reliance on electricity imports. The interviews reveal that the DSOs perceive more challenges than benefits associated with BESS integration. DSOs struggle with allocating limited grid capacity, designing tariffs that incentivize efficient grid use, and assessing the maturity of connection requests. Furthermore, the DSOs associate dependence on third-party actors with increased risk, as it implies reduced control over system reliability. Moreover, the DSOs express concern that unregulated BESS actors could gain disproportionate market power at an early stage when competition is limited. While the DSOs recognize a potential role for BESS in alleviating grid bottlenecks, they do not consider it a long-term substitute for grid reinforcements, as such investment decisions are often driven by factors beyond grid constraints. The results highlight the need for clearer regulations, standardized practices for connection requests, and further research on how collaboration between DSOs and BESS actors could be facilitated. Read the full abstract. Download presentation.