Battery Storage Systems
An excerpt from "Five game-changers to consider before investing in the US electric energy market".
New and evolving technologies will forever change the energy generation landscape.
Led by California, Hawaii and New York, many states are creating energy policies that encourage renewable resources, distributed-energy resources, and energy-storage technologies. The cost of solar is dropping fast and the key to integrating solar appears to be battery storage. In the summer of 2018, California passed Senate Bill 100, a landmark legislation that requires California utilities to achieve 60 percent renewable portfolio standards by 2030 and be 100 percent carbon-free by 2045. Reaching these ambitious sustainability targets will require battery energy storage systems to become mainstream resources.
Battery storage systems
Battery storage systems are one of the most promising technologies to address the variability of renewables. These systems excel at short-term grid stabilization, rapidly accepting or injecting power to help ride through a cloud passing over the solar panels or a lull in the wind.
With storage, generation peaks and troughs can be leveled, enabling renewables to be a baseload power provider. New systems are being deployed that can feed networks for several hours, moving far beyond today’s very short-term applications.
The utility of these battery systems has been proven and, more recently, so has their profitability. A recent headline from Electrek, an online news site tracking the transition from fossil fuel to electric transportation, announced that “Tesla’s giant battery in Australia made around $1 million (AUD) in just a few days.”3 The 100MW / 129MWh Powerpack project in South Australia is owned by Neoen. The largest such system in the world at the start of 2018, it was paid up to $1,000/MWh to charge itself. The installation also demonstrated this technology’s stabilization function when a coal generator failed. The batteries provided a burst of power to normalize the grid, demonstrating the disruptive nature of new technology, and this battery system was installed in only 100 days.
The adoption of battery systems for power generation may coincide with a revolution in transportation electrification. Fighting climate change requires decarbonization of the entire economy. The battery-storage technology used in electric vehicles is more or less the same storage technology used for power generation. In early 2018, the Federal Energy Regulatory Commission passed Order 841, which directs system operators to come up with market rules for energy storage to participate in the wholesale energy, capacity and ancillary-services markets that recognize the physical and operational characteristics of the resource. The passage of this rule will help to eliminate a major barrier to energy storage by providing for more opportunities to provide grid benefit with fair compensation for those services.
As the modern electric power system decentralizes, energy storage resources located at the “grid edge” will play a major role in supporting the proliferation of distributed energy resources and reduce the need to invest in costly distribution and transmission equipment.
Are you making the most of your power market investments?
Energy market participants who build, trade or otherwise invest in the development of the energy markets must determine project viability and potential profitability. This work requires an extraordinary amount of data gathering and critical analysis - market shifts, changing legislative priorities, regulatory mandates, and evolving technology are only a handful of the variables that must be considered.
These white papers examine the five game-changing factors to consider before investing in the power markets.
- Viability of existing generation
- Market incentives
- Evolving technologies
- Interconnectivity and interdependencies
- Growing demand for electric transportation