Solar and wind power project developers are recognizing the financial benefits that incorporating energy storage into their projects provides. Storage has become a major part of microgrid configurations, and commercial and industrial (C&I) enterprises are discovering it can improve the cost-effectiveness of their own installations. Continuing technology advancements bode well for growth in the sector as investments in storage become more attractive.
Analysts have said that global outlays of $374 billion a year will be needed to upgrade the power grid with enough flexibility to account for the intermittent power generation profiles of renewables such as solar and wind. The Rocky Mountain Institute in a recent report detailed the multibillion-dollar potential of energy storage as part of those investments. The group said, “Total manufacturing investment, both previous and planned until 2023, represents around $150 billion, and analysts expect the capital cost for new planned battery manufacturing capacity to drop by more than half from 2018 to 2023.”
Though pumped-storage technology has been around for years, other storage technologies are newer, with the power generation industry still learning about the benefits—and challenges—that storage brings. Financial institutions and other potential investors in the space are working to become familiar with what storage means to the electricity sector, particularly because projects have unique characteristics based on generation sources, location, and their regional market.
“Energy storage is a unique power asset in that it can both discharge and absorb energy, acting as a generation or storage asset as needed [Figure 1],” Ray Hohenstein, market applications director for Fluence, told POWER. “This flexibility allows it to play multiple roles on the electric grid, including regulating power flows, providing critical peak power and ultra-fast black start capabilities, and helping other assets [both generation, and transmission and distribution (T&D)] operate more efficiently—all of which reduces costs as well as emissions.”
“I would say historically, energy storage is still quite new,” said Jacqueline DeRosa, vice president of battery energy storage at Ameresco, in an interview with POWER. “Energy storage hasn’t really been able to be monetized.”
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