Energy storage allows for a better match between power generation and consumption, improving reliability and efficiency. Different technologies offer unique benefits and applications.
Battery storage systems provide backup power and enable peak shaving, helping facilities save money on utility bills by shifting demand charges to off-peak hours. They also improve ROI on renewable assets by reducing curtailment and supporting renewable integration into the grid.
Benefits
Energy storage provides a number of benefits to the power system. It reduces costs by enabling load-shifting and by deferring electricity purchases during peak tariff periods. It also improves grid resilience and reliability by supporting renewable energy integration and providing backup power during outages. It can also be used to mitigate the effects of power plant outages and support new grid service markets like frequency regulation.
Residential and commercial battery energy storage systems allow consumers to manage their own energy use more effectively and minimize reliance on the grid. They also provide backup power during outages and facilitate the integration of renewables by shifting consumption from high-to-low tariff periods. For industrial users, well-designed ESS can help lower utility rates by shaving the single 15-minute demand charge peak that drives a significant portion of industrial energy bills. R&D in flow batteries, thermal energy storage and flywheels will continue to expand the range of applications for these technologies.
Technology
Energy storage allows businesses and homes to take advantage of renewables like wind or solar, even when the sun isn’t shining and the wind isn’t blowing. It also helps to stabilize the grid, reducing the need for expensive peak power plants.
Many different types of technologies are used to create energy storage systems. Battery energy storage systems (BESS) are the most common, using lithium-ion technology to store electrical energy chemically. Other technologies include thermal (such as pumped hydro) and compressed air energy storage.
All of these solutions address the fundamental mismatch between energy production and energy demand, decoupling the moment of generation from the point of consumption by absorbing excess electricity output during periods of low demand, and releasing it during high demand. They can also provide other ancillary services, such as frequency regulation, spinning reserve and load-leveling. The future will see advanced batteries that offer increased energy densities, faster charge/discharge times and longer cycle lives.
Cost
Energy storage is expensive, but the upfront costs can be overcome with financing options such as leasing and power purchase agreements. In addition, governments often offer investment tax credits and other incentives to encourage the development of these systems.
The overall cost of energy storage depends on your specific application. You’ll want to consider things like how many cycles the system will go through, its duty cycle and if it’s used to avoid peak demand charges or provide balancing services. You’ll also need to think about the capital expenditures (CAPEX), which include equipment purchases, installation and safety.
The good news is that the economics of battery energy storage are improving rapidly. According to a recent report by energy think tank Ember, utility-scale battery storage costs have fallen below $125 per megawatt-hour in markets outside of China and the US. This means that pairing solar with storage to deliver power when it’s needed is now cost-effective.
Applications
Energy storage is an essential component of energy systems worldwide, supporting grid resilience and renewable integration. Different types of energy storage capture and retain energy in chemical, thermal, or mechanical forms. They can be deployed on a range of timescales, from seconds to months.
Battery energy storage systems (BESS) have dominated the market, with new lithium-ion chemistries emerging to extend the durations they can store. Other systems like pumped hydro and compressed air storage are also growing, especially in conjunction with solar energy.
A key function of these technologies is frequency regulation, a rapid response to keep AC power frequencies within a narrow band. They also help reduce curtailment of renewables by allowing them to be dispatched at peak prices. This improves the ROI of on-site renewable generation, and supports sustainability and electrification goals.