Axpo Signs Landmark BESS Optimization Deal in Poland

Watch Axpo, R.Power launch record-breaking deal in this graphic illustrating Central Europe’s transition toward a decarbonized energy grid in October 2023. The collaboration focuses on maximizing a 300 MW/1200 MWh Battery Energy Storage System (BESS) in Dzięgielewo, located in the Mazovia region of Poland. The deal is the largest of its type in the region and marks a new paradigm for how utility-scale storage assets are embedded into today’s power market.

Growing penetration of renewable energy (RE) across the continent makes flexible fast-acting storage a national energy security priority. Under the terms of this long-term route-to-market contract, Axpo will manage the participation of the Dzięgielewo facility in various financial and operational markets across Poland, including day-ahead, intraday, and balancing markets.

A Strategic Milestone for Poland’s Energy Grid

The Dzięgielewo project goes beyond a one-time, municipal improvement; it is also part of a larger Polish plan to lessen dependence on coal inherited from the past. Poland’s energy transition is suddenly making rapid progress, with growing wind and solar capacity. Yet this sporadic availability of renewable sources poses challenges as we need efficient buffering systems to stabilize the grid frequency during periods of inverse supply and demand.

This battery energy storage system (BESS) facility, co-developed by R.Power, one of the fastest-growing independent power producers in Europe, is meant to meet the gap between generation and consumption. The system enables the required battery of firming for a green grid, by storing excess energy during peaks in production and discharging when demand spikes or winds slow down.

The Dzięgielewo Project: Powering the Mazovia Region

Dzięgielewo BESS is a facility located in the center of the Mazowieckie voivodeship, at the juncture between significant load centers. Mazovia, which includes the metropolitan area of Warsaw, is one of the regions with particularly high requirements for electricity in the country. There are also several localized benefits to deploying large-scale storage here:

• Grid Congestion Relief: The BESS directs local energy flows and mitigates damage to aging transmission lines.
• Voltage Support: This axis will support services to maintain the technical condition of the regional distribution grid.
• Economic Resilience: Decentralized storage lowers the risk of price spikes during peak demand, that provide more predictable price floor for local consumers.

How Axpo Optimizes Battery Storage Performance

Creating the battery itself is a technical achievement, and achieving ROI requires powerful market intelligence. This is where the role of Axpo becomes critical. Axpo will use proprietary algorithms to guide itself through the challenges of the Polish energy market based on its longstanding experience in particular from energy trading and risk management, over a span of almost 15 years.

Here, optimization means deciding in an instant when to charge or discharge and when to hold energy for later use. The Dzięgielewo facility will join the “Balancing Market,” a system in which the grid operator pays for rapid balancing of supply and demand. Through Axpo’s dedicated trading floor, BESS can optimize income streams while also offering the best service for the Polish national grid (PSE).

Strengthening Central Europe’s Renewable Infrastructure

Now the scale of this deal showcases a trend that is growing in Central and Eastern Europe (CEE). While Western Europe has been ahead in BESS deployment for years now, the CEE region is fast catching up as a result of changing regulatory frameworks. A major component that has helped this development is the long-term “Capacity Market” price signals in Poland, enabling developers – such as R.Power – to finance these expensive capital projects.

Key takeaways from the Axpo and R.Power agreement include:

• Market Leadership: The 300 MW/1200 MWh capacity sets a new benchmark for third-party optimization deals in Poland.
• Technological Integration: The project utilizes lithium-ion technology optimized for two-hour discharge durations, ideal for the current needs of the Polish grid.
• Long-Term Commitment: This deal underscores the confidence that international energy players have in the stability and growth potential of the Polish renewables sector.

The Future of BESS in Poland

Industry analysts suggest that the Dzięgielewo project is likely the first of many. With Poland aiming to reach significantly higher levels of renewable energy by 2030, the demand for BESS optimization is expected to grow exponentially. This partnership between a major Swiss energy firm and a leading Polish developer creates a blueprint for future cross-border collaborations.

The success of the Dzięgielewo site will be closely watched by investors and policymakers alike. If the optimization strategies deployed by Axpo prove as effective as anticipated, it could trigger a wave of new BESS investments across the Mazovia region and beyond, further accelerating the decommissioning of carbon-intensive thermal power plants.