As the behind-the-meter distributed energy storage market continues to mature, a series of factors have propelled residential energy storage systems (RESSs) to the forefront of industry consciousness. These factors include technological progress, legislative and regulatory tailwinds, and new grid challenges associated with intermittent renewable generation.
RESSs can be a highly flexible and valuable resource, improving efficiencies for system owners and the power grid. While residential battery storage has been a growing market in select geographies for several years, the market was primarily driven by early adopters concerned with supporting clean energy or self-sufficiency more than economic self-interest. RESSs were largely regarded by utilities as a niche product for clean energy connoisseurs.
Many utilities see RESSs as a new avenue to improve their services and relationships with customers at a time when new technologies present a real risk of load defection. Utilities around the world recognize these benefits (particularly the ability to reduce congestion on the network and limit the need for peak capacity resources) and have launched programs to deploy RESSs. Utility involvement, cost declines, government incentives, and increased solar photovoltaic (PV) integration are driving increased RESS deployments.
The global RESS market is gaining momentum, with installation growth rates soaring in geographies including Germany, Japan, Australia, and several U.S. states. However, long-standing uncertainties concerning feasible uses and cost-effectiveness remain. As a result, it is vital to support residential utility customers’ ability to tap into RESS value streams that go beyond traditional solar self-consumption. Such support will likely improve the value proposition and increased adoption of RESSs.
Emerging RESS Virtual Power Plants
For residential utility customers, aggregation through a virtual power plant (VPP) is a foundation for unlocking RESS potential to provide grid services. As energy markets evolve toward a greater dependence on distributed energy resources (DERs), strategies to generate more value from smaller, cleaner, and smarter systems are being designed and implemented — including the use of aggregation and VPPs. VPPs transform previously passive consumers into dynamic prosumers that can deliver services customized to their own needs while delivering services to the grid.
At the same time, utility DER management systems (DERMSs) are being designed, piloted, and closely examined for their potential to provide localized grid services. These systems are employed by utilities to control the same DER assets as prosumers, regardless of whether they own the systems or not. Although demand-side VPPs and supply-side DERMSs are closely related, their integration into a common solution set is yet to be fully realized.
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