Diotech CEO Raivo Videvik to Äripäev Industry News: “Battery energy solutions play a central role in our energy security”

Our CEO Raivo Videvik gave an interview to Äripäev Industry News (Tööstusuudised.ee), where he talked about the experience of completing the Auvere BESS (Battery  Energy Storage System), the growing role of battery storage in ensuring our energy security, and Diotech’s development plans. The questioner was Toomas Kelt, editor of Tööstusuudised.ee.

What were the biggest challenges for Diotech in the Auvere battery storage project and how were they overcome?

Photo by Jarek Jõepera

The most difficult part was integrating the existing station infrastructure with the new storage technology to ensure smooth cooperation with Auvere’s production equipment. It was important to follow high safety and quality requirements, because the reliability of the battery banks and stable supply to the electricity grid depend on well-thought-out design and installation. The key to the success of the Auvere project was close cooperation with the end customer, Eesti Energia, partners and equipment suppliers. This meant detailed preliminary design, system testing, and thorough personnel training.

How do you assess the role of storage technology in ensuring the energy security of Estonia and the Baltics over the next decade?

Battery storage plays a key role in ensuring the energy security of the region, as it enables the production of renewable energy to be managed and helps balance the grid by providing frequency reserve capacity. Battery storage helps integrate renewable energy in larger volumes, which allows for reducing dependence on imported fuels and stabilizing the energy system during fluctuations in production and consumption volumes. This is precisely why we see Diotech playing a growing role in the Estonian and Baltic energy markets in the coming years, to ensure, similarly to the Auvere plant, the synergy and efficiency of battery banks with other energy production capacities for both the producer and the grid.

What technology was used in the Auvere storage and why was the LG Energy Solution solution chosen?

We used LG Energy Solution technology in the Auvere project. The LG solution was chosen due to the proven reliability of the batteries, security mechanisms, and flexible options for integrators. In addition, when choosing the technology, we also took into account the previous global experience that LG Energy Solution has created elsewhere, because the necessary tests and warranty conditions also met the strict requirements of the Auvere power plant project here.

How far is the situation in Estonia and the Baltics where battery storage systems become an everyday part of energy calculations and grid management?

Currently, BESS solutions are still in the expansion phase, but visible developments both in the electricity market and at the level of grid operators indicate that the integration of battery storage systems into production and consumption planning will become common practice in the coming years. Regulations and financial mechanisms are moving in such a way that the installation of storage systems would be increasingly attractive. Both small and large producers will certainly benefit from this.

Do you see a possibility in the near future that storage technology will become affordable for domestic consumers or small producers?

Yes, smaller battery solutions for households are already available on the market and on increasingly reasonable terms. Diotech has also installed storage solutions for a significant number of our customers – for example, solar parks. A wider breakthrough depends primarily on the decline in the price level of equipment and national support mechanisms. Considering how the prices of renewable energy solutions have changed over the past 5 years, we see that a similar trend will likely soon reach storage technology, and with it, interest among micro producers and home consumers will likely grow.

Today, we can already see in the Estonian market that demand for storage solutions for solar parks built on fields has increased. There are already thousands of solar parks with different capacities in Estonia, and if there is a plan to make a profit with such a production volume, then without a battery storage it will be quite difficult both today and in the future. Moreover, adding storage solutions to solar parks will benefit both the PV park owner and the security of supply of the network.

How big a role do you see Diotech playing in future energy network development projects – is the direction more in Estonia or is it expanding abroad?

As a system integrator, Diotech is focused on tailor-made solutions for grid-scale battery stations and developing cost-effective solutions for companies in various fields, from solar parks to industries, logistics or commercial real estate. Since the field of activity is broad and allows cooperation with various energy solutions, the field of work is also broad. We are an Estonian company, but we see further development beyond the border, especially in the other Baltic countries, Poland and Finland, but in fact we have potential projects on the horizon in other parts of Europe.

Trans-regional projects are promising, because there is a growing demand for storage technologies. Diotech sees itself developing cooperation opportunities with both regional and international partners to offer complete solutions from design to guaranteeing their functionality.

What new knowledge or skills did you gain from the Auvere project that you can apply to your next projects?

The Auvere project primarily taught us how to integrate complex control systems next to a large production unit. At Diotech, we developed the software architecture of the master controller in cooperation with CGI Estonia, which allows the customer operator who monitors the profitability of the battery cycle on a daily basis to control the system. In addition, we developed our own SCADA system for monitoring and maintaining battery storage systems in cooperation with Atemix Tööstusautomaatika. We gained valuable experience in planning the cooling, fire safety and monitoring systems of large battery stations so that they meet both local and international standards. This knowledge can be applied in the design and operation of objects of comparable size as well as smaller ones. In the coming years, we will also remain responsible for the high availability of technology at the connection point, which in turn will provide the customer with certainty regarding the return on investment.

How does Diotech evaluate cooperation with national partners such as Eesti Energia and could such forms of cooperation become more frequent?

Cooperation with Eesti Energia and other state partners has been constructive, as state-owned companies have a clear interest in the reliable operation of large energy projects. Such joint projects highlight the best possible technical competence and create a good basis for even more in-depth forms of cooperation in the future, including piloting new energy solutions.

Our experience has shown that Eesti Energia is a very important driver in the local market for the deployment of innovative solutions. In the case of innovative grid-scale projects, it is important to look for areas of cooperation with Eesti Energia as a state-owned company, and we are pleased that such cooperation is successful, as in the case of the Auvere project.

How do battery storage systems affect the price of electricity for consumers – are there any concrete changes in the market yet?

Battery storage systems help to smooth out price fluctuations, as they store electricity at lower market prices and feed it back to the grid at higher prices. This creates an opportunity to stabilize the exchange price of electricity, especially if storage capacities grow large enough. At the moment, the impact is still relatively limited, but thanks to battery storage systems, we are already moving towards cheaper and more stable energy.

What could be the ideal storage technology in Estonia in 10 years – what are the development directions and expectations?

Lithium-ion batteries will likely be combined with hydrogen or other innovative storage solutions to achieve better energy diversity. Further developments in battery technology are expected, including devices with higher energy density and longer service life.

Ideally, the storage portfolio would cover both short-term power regulation measured in seconds, minutes and hours, and long-term energy security measured in days and months. All of this ensures increasingly greater security of supply, cost-effectiveness and flexibility.

Read the article in Äripäev Industry News here.