More than 3.7 million electric vehicles (EVs) were sold worldwide over the past two years. That’s creating business opportunities for electrical contractors, many of which aren’t immediately obvious. One case in point involves electric utility-scale battery energy storage systems (BESS), which typically use the same lithium-ion (Li-ion) technology as EVs. As EV sales grow, so do Li-ion volumes. That helps send Li-ion technology down the cost curve, making BESS more attractive to more electric utilities.
“One of the largest drivers is the rapidly declining cost,” says Roger Lueken, a senior associate at The Brattle Group, which tracks the utility market. “We’ve seen double-digit percentage [declines] per year for battery packs for the past 10 years.”
The EV trend is also prompting electric utilities to look for new ways to keep up with demand. For example, a household with one or more EVs can use four to five times more electricity than homes without. BESS is one way to manage that demand, such as with batteries installed in or near neighborhoods with high concentrations of EVs. During the day, when most of those vehicles are elsewhere, solar or wind systems can charge the batteries. At night, they help shoulder the increased charging load.
“BESS also provides utilities with new flexibility to generate, control, and manage power within their grid,” says Clay Williams, project executive for energy/utilities at Pittsburgh-based Sargent Electric Co. “Many utilities are considering BESS to replace their peaker plants.
“Also, the utilities can dispatch the power, or have the grid operators dispatch the power, at times of peak demand, which will result in a higher price per kilowatt-hour being sold. The utilities may be able to obtain a more lucrative power purchase agreement.”
Finally, BESS is another option for serving customers in areas prone to outages. Take the example of a remote, six-home subdivision fed by a 20-mile-long distribution line that passes through an area where wildfires are common. A BESS could support a microgrid for those customers to ensure they have power when that line goes down. It also could eliminate the need for that line altogether.
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