As countries around the world start/continue their transitions to renewable energy while also electrifying different sectors, new technologies must step up to support these parallel revolutions. While it might not be the “silver bullet” solution, it is now clear that energy storage in various forms will be a crucial supportive technology – ensuring a successful and sustainable transition over the coming years and decades.
Energy storage is a critical hub for the entire grid with clear benefits for all parties involved: producers, consumers, grid operators, and government bodies. This technology is capable of augmenting resources from wind, solar and hydro, to nuclear and fossil fuels, to demand side resources and system efficiency assets. It is also very flexible and can act as a generation, transmission or distribution asset – sometimes in a single asset.
Ultimately, storage is an enabling technology. It can save consumers, producers, and grid operators money, while also improving reliability and resilience, integrating generation sources, and can help reduce environmental impacts. Although there are many forms of energy storage solutions currently available and in development, the most widely applicable form of storage, battery energy storage systems (BESSs), will be the focus of this blog post.
Benefits of BESS:
- Save Money: Obviously, financial incentives are the largest drivers, independent of which party the adopter belongs to. Energy storage can save operational costs in powering the grid, as well as save money for electricity consumers who install energy storage in their homes or businesses. Battery energy storage can also reduce the cost to provide frequency regulation and spinning reserve services, as well as offset the costs to consumers by storing low-cost energy and using it later, during peak periods at higher electricity rates. By using energy storage as backup power to avoid brief outages on the grid, businesses can avoid costly disruptions and continue normal operations. On the residential side, customers can save themselves from lost food and medicines, and avoid the inconvenience of not having electricity without having to rely on a natural gas generator. There’s also the option for both businesses and residential consumers to participate in demand response and other grid support programs to generate additional revenues from their battery asset.
- Improve Reliability & Resilience: Energy storage can provide backup power during disruptions. The same concept that applies to backup power for an individual device (e.g., a smoke alarm that plugs into a home but also has battery backup), can be scaled up to an entire building or even the grid at large. Battery storage provides flexibility for the grid, to ensure uninterrupted power to consumers, whenever and wherever they need it. This flexibility is critical to both reliability and resilience. As the cost of outages continues to rise, the value of enhanced reliability and improvements in resilience also increases.
- Integrate Diverse Resources: Energy storage can smooth out the delivery of variable or intermittent resources such as wind and solar, by storing excess energy when the wind is blowing and the sun is shining, and then delivering it when the opposite is true. But battery storage can also support the efficient delivery of electricity for inflexible, baseload resources. When demand changes quickly, and flexibility is required, energy storage can inject or extract electricity as needed to exactly match load – wherever, and whenever it’s needed. As previously mentioned, Energy storage is an enabling technology and the ability to integrate diverse resources really proves this. When the sun isn’t shining or the wind isn’t blowing, energy storage can be there. When demand shifts and baseload resources can’t react quickly enough, energy storage can be there.
- Reduce Environmental Impact: In simplest terms, energy storage enables electricity to be saved for later use, when and where it is most needed. This creates efficiencies and capabilities for the electric grid—including the ability to reduce greenhouse gas (GHG) emissions. By introducing more flexibility into the grid, energy storage can help integrate more solar, wind and other distributed energy resources. It can also improve the efficiency of the grid – increasing the capacity factor of existing resources – and offset the need for building new pollution-emitting peak power plants. As the world’s energy mix gets increasingly cleaner with low- and no-carbon resources, energy storage helps that supply mix evolve more easily and reliably.
Now that the high-level benefits have been covered, we can focus in more on specific use cases of battery energy storage and the benefits each provide. Some of these use cases are applicable to both consumers and grid operators, however the last couple are more targeted towards grid-level application.
- Standalone: As a standalone asset, battery energy storage can operate in a similar manner to generators by providing a business or facility with backup power in case of blackouts while also allowing them to participate in peak shaving and demand response programs to generate savings and additional revenues. Battery storage also has the advantage of being a cheaper and cleaner alternative to natural gas/diesel generators. There is also the potential for energy arbitrage where a consumer charges up their battery during off-peak hours when electricity is cheapest, and then sells the energy back to the grid during peak hours when the price is highest. As an alternative to selling back to the grid, a facility can simply offset their consumption during the peaks with this stored energy, effectively reducing their demand on the grid and avoiding peak pricing. Even as just a standalone resource, battery storage can be impactful and valuable assets to businesses of varying sizes. These benefits extend to grid level applications however the battery systems in question are obviously much larger in terms of capacity and scale where they provide grid operators with another tool to help manage supply-demand balances on the grid and avoid blackouts.
- Solar + Storage: Combing solar with battery storage effectively allows electricity consumers to also produce their own electricity, a term dubbed “prosumer”. This type of solution provides all the benefits of a standalone asset along with the ability to produce cheap and clean energy from on-site solar panels. Building on the energy arbitrage opportunity outlined above, your facility now has additional flexibility with the addition of this on-site generating capacity. This gives your facility to ability to directly charge your battery asset with solar for later use on-site or sale back to the grid during peak hours. You obviously also have the opportunity to use the solar power you generate immediately for on-site use as well to offset demand. Combined solar and storage deployments also provide much-needed additional flexibility to grid operators allowing them to generate and store electricity when the sun is shining and then discharge the battery systems when peak grid demand is approaching. This combination, when deployed at grid-scale, enables grid operators to better handle the inconsistency of renewables (not only solar) and in turn allows them to ensure a reliable and stable grid for all.
- Storage as virtual Transmission: Grid-scale battery storage systems can also be used to avoid or defer the costly building of new energy transmission lines. This battery storage use case enables grid operators to operate existing lines closer to existing generation stations, as well as alleviate congestion caused by increasing renewable generation, among other flexibility and reliability related benefits. The biggest takeaway from this use case is being able to avoid costs associated with network expansion, as well as help grid operators to offer additional and improved ancillary services.
- Storage as virtual dam: Our last use case, which is again more targeted to the grid operator, is to deploy battery storage as a virtual dam. This would help grid operators to optimize dispatch through output time shifting similar to the concept described in the solar + storage use case. Not only does this allow operators to better optimize dispatching of assets but also allows them to expand their capacity revenues, provide additional ancillary services, and turn irrigation flows in peaking power capacity.
Independent of their size and intended use, energy storage assets are here to stay and will become increasingly prevalent portions of electric grids around the world in the coming decade. If you’re interested in learning more about Edgecom Energy’s specific battery solutions, feel free to explore the dedicated page on our website or reach out to any of employees for specific questions.