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A visual representation of a smart microgrid in the Azores, highlighting decarbonization efforts.

Decarbonizing Azores: Battery storage and microgrids

Terceira, one of nine Azorean islands, is digitally transforming its grid to substantially grow grid resilience and the share of renewables.

Combining the real and the digital worlds

The Azores, already known for their lush wildlife and flora, are getting greener in another respect – making their power supply cleaner and less reliant on fossil-fueled generators. To accomplish this, Terceira expanded its local renewable power generation capacity, with a smart microgrid at its core. In collaboration with Fluence, Siemens is deploying a microgrid management system and large, autonomous battery energy storage system to accelerate the islands’ path towards a more sustainable electricity grid.

The Azores, a volcanic archipelago 1,400 kilometers from the Portuguese mainland, is populated with species found nowhere else in the world. And since 2023, the islands offer a new attraction – though one probably more interesting to the technology-minded than to nature lovers: one of the biggest battery energy storage systems in Europe has been built on Terceira, one of the archipelago’s nine inhabited islands.

External view of Terceira power plant on a hill

Renewable energy for Terceira

Terceira’s capital, Angra do Heroísmo, has an old town and fortifications classified as a UNESCO world heritage site. And the new microgrid and battery storage solution will now make it possible to supply more renewable energy to the historic city – and all the other towns on the island.

The most important renewable energy sources on the island are:

  • geothermal energy
  • wind energy
  • hydro energy
  • solar energy

The Azores’ history of utilizing renewable energy goes back decades. In the late 1980s, they installed the archipelago’s first wind turbines, and the first geothermal power plant was commissioned a short time later. Today, all inhabited islands produce power from renewable sources. About 40 percent of the archipelago’s electricity needs are met with renewable sources. Geothermal energy is especially significant, accounting for 60 percent of total renewable electricity generated; the rest comes mainly from wind and hydroelectric plants.

A threatened island paradise

Like all islands, the Azores are especially vulnerable to climate change. Rising seas threaten coastal settlements. And researchers expect that many islands will have to contend with increasing drought in the coming decades – a potential threat to the drinking water supply.

Of course, the islands can’t solve this problem alone – but they can do their share to reduce global CO2 emissions.

Energy from the islands for the islands

In the Azores, decarbonization is planned as part of a comprehensive energy strategy, which provides for a continuous expansion of renewable energy and a variety of other steps like encouraging electromobility.

By expanding local, renewable energy production, the Azores are solving two problems at once. More power from renewable sources means lowering greenhouse gas emissions. And local production reduces dependence on the mainland – because some 60 percent of necessary energy is still imported to the islands in the form of fossil fuels.

A map of the Azores archipelago highlighting wind energy production.
A solar panel installation in the Azores, Portugal, with a clear blue sky and a mountain range in the background.

Electrical storage for a more stable grid

Each island has its own independent grid. So, the power supply can’t be revamped for the whole archipelago but will need individualized island solutions – for instance, on Terceira. Here the Portuguese utility Electricidade dos Açores (EDA) is investing in innovative technology: a battery energy storage system with a capacity of 15 megawatt (MW) combined with a smart microgrid management from Siemens. The storage system provided by Fluence ensures that no autonomously produced electricity is wasted, and all gets used as efficiently as possible. It absorbs surplus energy and discharges it back into the grid to cover the demand when the production is too low.

The battery energy storage system holds two more advantages:

  • It regulates frequency
  • It balances voltage for the island’s electric grid – thus improving stability

Modularly designed: The storage system provided by Fluence absorbs surplus energy and discharges it back into the grid to cover the demand when the production is too low.

Storage facility for grid energy on Azorean island of Terceira

Intelligent microgrid management system ensures efficiency

A smart microgrid management system ensures that power generation, energy storage, and power consumption are fully balanced. It allows real-time monitoring and control for the entire infrastructure and can make hourly or daily projections for production, consumption, and storage utilization based on a wide range of data – including weather.

The system can incorporate an additional six megawatt into the power mix from renewable or endogenous sources like geothermal production. That means that with the new battery storage system, within the medium term, the island will be able to expand its share of renewable energy to around 60 percent.

A blueprint for energy islands

Once the goal of 60 percent renewable energy has been reached, the modularly designed battery storage system can be expanded as needed. This follows the example of other rapidly decarbonizing island grids, such as Ireland, which is quickly moving to meet a target of obtaining 70 percent of its electricity from renewable energy by 2030, and which is also procuring battery storage to help meet its goals.

But even the current configuration is already delivering measurable improvements for Terceira. The island’s annual diesel consumption has already been cut by 1,150 metric tons because less electricity must be produced with generators. That is equivalent to a reduction of more than 3,500 metric tons of CO2 emissions per year – roughly the equivalent of 1,500 vehicles driving 20,000 kilometers a year. So, after all, the new microgrid management system will very likely appeal to not just tech aficionados but nature-lovers as well.