A quick scan of the headlines in the industry press would suggest energy storage is busting out, as utilityscale storage systems are being built to deal with the infamous duck curve, or imbalance of power production from renewable energy. The use of storage will be part of one big happy scenario of cheap, clean power, the theory goes. Every day you can read about another municipality, state or utility that has adopted a 100 percent renewable power grid goal, and despite derailment of the Clean Power Plan, utilities have not altered their renewable objectives.
A report by research firm GTM Research and the Energy Storage Association that showed utility-scale battery storage installed capacity grew by 221 MW in 2016, or about double that of 2015. Total utility storage is 622 MW. The figures are proof of growth of long-duration batteries and an increased confidence that large energy storage will help manage peak demand, the report argued. GTM analysts predict a 10-fold revenue increase in storage system sales by 2022 to $3.3 billion.
Another report by Navigant Research released in mid-2017 predicted that the global market for distributed energy storage will reach 27.4 GW and $49 billion by 2026.
The premise is that utilities can’t have a high percentage of renewable energy in their system without some storage to have power available when the sun isn’t shining or the wind isn’t blowing. Most peak uses are early evenings and during the hottest parts of the day for air conditioning. If fossil fuel is to be taboo, storage must be part of the answer.
Considering the above, here’s our question: Why are there not more battery energy storage systems being installed? At the current rate of growth, getting from 622 MW to 27 GW in eight years appears to be an impossibility.
Most of the new storage added last year – 120 MW – was built in California, and that was required by state regulators. Storage isn’t a part of most utility resource integration plans because they have a variety of power generation sources for spinning reserves, demand side management and grid sharing arrangements.
The simple answer to our question is that storage isn’t cost-effective – yet. Storage costs are falling; therefore, it is frequently prognosticated by many – particularly storage vendors and their associations – that storage will fill the void in the grid created by intermittent output by renewable sources. But is that assumption true? When will storage become cost-effective? The answer is intertwined with the technology that will eventually win out.
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