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Battery storage offers bigger stadia cost savings, and new revenue stream

LONDON, ENGLAND - AUGUST 25: A general view of the Emirates Stadium exterior home stadium of Arsenal during the Premier League match between Arsenal FC and West Ham United at Emirates Stadium on August 25, 2018 in London, United Kingdom. (Photo by James Williamson - AMA/Getty Images)

  • Arsenal’s 3.7MWh BSS could halve energy bills at the Emirates Stadium
  • California’s Dignity Health Sports Park says its BSS has reduced its annual electricity bill by 10 per cent
  • Capacity for electricity resales suggest BSS make most sense for 30,000-plus-seater stadia

Last November, English football club Arsenal unveiled a battery storage system (BSS) at the Emirates Stadium in London – a first for a British sports club.

The final-stage 3.7MWh lithium ion BSS stores enough electricity to power the 60,000-seater Emirates for a 90-minute match; the equivalent of powering 2,700 homes for two hours.

It offers the stadium short-term energy security, but more enticing is the chance to cut electricity costs by buying cheaply at night and open a new revenue stream by selling services back to the grid.

And it’s likely to deliver significant savings, judging by the experience of similar systems at the Dignity Health Sports Park (formerly the StubHub Center) in Carson, California – home of the LA Galaxy and the Los Angeles Chargers – and the Johan Cruyff Arena, home of Dutch football club Ajax.

Adam Duvendeck, vice-president (operations) at the Dignity Health Sports Park, told SportBusiness that it has reduced its annual electricity bills by about 10 per cent directly as a result of its own, lower-capacity BSS.

“Where we see the biggest impact is when we have events. For most events, we’re able to reduce our power consumption on the grid by around 20 per cent.

“Our day-to-day savings using the battery are somewhat marginal. It’s worthwhile doing but where we are able to realise these larger percentage savings is by shaving peak usage during events. So, the more events that we have, the higher the percentage in savings we have.”

How BSS works at the Johan Cruyff Arena

Risk and reward

A BSS offers three distinct benefits to a stadium:

First, back-up power. Second, the ability to buy cheaper electricity at night, store it and discharge it during the day, cutting down bills. Chris Jardine, technical director of London-based Joju Solar, which specialises in the design and installation of solar energy, battery storage and electric vehicle charging systems, estimates that – based on a standard UK daytime electricity rate of eight-to-ten pence per kilowatt hour, and a night time rate of four or five pence per kilowatt hour – Arsenal could halve electricity bills at the Emirates via the BSS.

Third, selling services back to the grid, specifically frequency balancing. Jardine says Arsenal could “use the battery to charge and discharge at much, much shorter notice to help maintain a more stable electricity grid within the local area.

“If the frequency of the grid drops away, the battery will compensate for that. And if the frequency gets too high, the battery can charge up and soak up some of that excess power. That will help maintain the grid operation at the standard 50 Hz. And that’s useful to the National Grid, which would essentially be paying for that service.”

There are also risks. The most obvious is a technical risk, of the battery degrading over time and the use case falling apart. Battery capacities are holding up over time better than was initially expected, notes Jardine, but the technology being used in this way is still very new.

The second risk relates to the frequency response service. He explains that if the market for providing this service explodes, the potential return could be significantly reduced.

“If we see a rush on and people throwing in batteries to provide frequency response, then the price might drop away. It’s really based on supply and demand for that service. I think there is a longer-term risk around the stability of the prices that you’re receiving.”

The Arsenal way

While the club and its partners declined to reveal the cost of the installation, Jardine told SportBusiness its initial cost would be between £1m (€1.1m/$1.3m) and £2m, based on a market price for a BSS of between £500 and £1,000 per kilowatt hour.

Arsenal will install the system in two stages to minimise disruption to the club’s day-to-day activity. The initial installation is a lithium ion BSS with a storage capacity of 2.5MWh, which will be increased to 3.7MWh in the summer of 2019.

The project has been fully funded with investment from London-based investment manager Downing LLP. Third-party investment in solar energy and battery storage systems is common, as many firms regard the system as outside their core business.

Jardine: “We see most commercial institutions essentially pigeonholing their own finances for their own activities but being happy to partake in these third-party models where they don’t have to put any money in, but they do get some upside for participating in the scheme.

“I don’t think [Arsenal] fans would be massively happy on them spending £1m on a battery when they could be spending an extra £1m on a player, for example.”

He adds that using outside investment means that Arsenal are taking on less of the risk but can still get some of the rewards. “They’re not going to make millions out of this, but they’ll be getting some money and are opening up a door.”

The Emirates BSS a has already secured a firm frequency response (FFR) contract from the UK’s National Grid. The return will depend on the price agreed with the Grid, which is set by a competitive tender process.

Income from reselling to the National Grid will be shared between Downing LLP, Arsenal and Pivot Power, the UK firm which will operate the BSS day-to-day for the next 15 years.

Jardine says an investor – Downing LLP in Arsenal’s case – would seek “at least a 10-per-cent rate of return, maybe nearer 20 per cent, each year. Then they would share some of the upside of that with Arsenal in exchange for hosting the battery”.

Pivot Power is using Open Energi’s Dynamic Demand 2.0 platform to manage the BSS. David Hill, commercial director at Open Energi, told SportBusiness that Open Energi “automates and optimises the battery storage system in real-time”, adding: “This involves managing when the battery charges and discharges in response to different market signals. One of these is frequency response, a service bought by the National Grid to help it manage electricity supply and demand more flexibly and ensure the smooth running of the UK’s electricity network.”

Hywel Sloman, operations director at Arsenal, told SportBusiness that the marketing team at Arsenal is leveraging the news of the BSS installation at the Emirates to promote the club’s CSR credentials.

“As a club we look to share the CSR work we do with staff, supporters and other stakeholders,” he says. “We have a ‘sustainability’ section on our website…the launch of the battery features within this section of the website, and media were invited to cover the project being commissioned and going live.”

BSS fits Dignity’s sustainability agenda

Opened in 2003, Dignity Health Sports Park includes a 27,167-seat American football and soccer stadium, 8,000-seat tennis stadium, 2,000-seat facility for track and field, and 2,450-seat indoor velodrome – the VELO Sports Center – for track cycling.

The complex, which is managed by AEG Facilities, is heavily focused on green stadium operations. It was the first soccer-only MLS venue to utilise LED stadium lighting, was the first stadium in the US to irrigate with recycled water, and has a community garden and greenhouse that supplies fresh produce for team and venue staff.

It began running a BSS in January 2016, installing 20 Tesla Powerpack commercial batteries. Though smaller than Arsenal’s, the 1MWh/2MWh capacity makes it the largest energy storage system at any sports venue in the US.

Duvendeck explains that the complex works with California-based tech company Stem to maximise the battery’s utility: “We have had to work towards that as we’ve learned to utilise the battery. Stem helps us manage the optimisation of the battery and it wasn’t until we brought them into the picture that we were able to really focus on maximising the overall potential of the battery.

“They use a specific type of artificial intelligence to monitor our usage and then the battery’s discharge…but it did take us some time to develop that model with them.”

The park’s BSS cannot match Arsenal’s in providing power for a 90-minute stretch, but the system can be easily expanded and Duvendeck says it will be considered, with a view to the 2028 LA Olympics, when the venue will host five different sports.

“We aren’t able to go completely off-grid for an event in its entirety, but we have been able to do that for shorter durations,” he adds. One such occasion was the hour-long press conference it hosted in May 2017 in the lead-up to the vote for the LA 2024 Olympics [now LA 2028] to promote the city and venue’s sustainability efforts.

Batteries for everyone?

Jardine claims that, for Arsenal, “most of the economic benefits from this scheme will be coming from providing services back to the National Grid” but notes that in order to do so market rules state that a BSS must have at least 1MWh of capacity – a size of battery that he says would be feasible only for sports stadia with a capacity of at least 30,000.

“As the markets are set up today it wouldn’t be something that could roll down to the smaller clubs,” he says. “If we see changes in policy and the markets for providing grid services come down in scale, then that would open up the opportunity for smaller operations to do this as well.”

Pivot Power chief executive Matt Allen tells SportBusiness that the “economics of energy storage stack up, so batteries are a no brainer for any high energy consumer”.

Major US stadia told SportBusiness they are also considering installing a system. This includes the Mercedes-Benz Stadium – a leader in sustainability that plays home to the NFL’s Atlanta Falcons and MLS side Atlanta United – and the Milwaukee Bucks’ Fiserv Forum.

Scott Jenkins, general manager of the Mercedes-Benz Stadium, tells SportBusiness: “We’re exploring this idea and we’ve been talking to a company that could install a BSS at the Mercedes-Benz Stadium.

“We applaud Arsenal for installing the BSS at its stadium. The sports industry is in an interesting space to lead and demonstrate business opportunities in this area and help address climate change. It also tells a strong CSR story.”

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