POWER November 2020 - 28

ENERGY STORAGE
Analysts: Storage a Matter
of Dollars and Sense
More developers are adding energy storage to their power generation plans as they
recognize how the technology improves a project's economics.
Darrell Proctor
S
olar and wind power project developers
are recognizing the financial
benefits that incorporating energy
storage into their projects provides. Storage
has become a major part of microgrid
configurations, and commercial and industrial
(C&I) enterprises are discovering
it can improve the cost-effectiveness
of their own installations. Continuing
technology advancements bode well for
growth in the sector as investments in
storage become more attractive.
Analysts have said that global outlays
of $374 billion a year will be needed to
upgrade the power grid with enough
flexibility to account for the intermittent
power generation profiles of renewables
such as solar and wind. The
Rocky Mountain Institute in a recent
report detailed the multibillion-dollar
potential of energy storage as part of
those investments. The group said,
" Total manufacturing investment, both
previous and planned until 2023, represents
around $150 billion, and analysts
expect the capital cost for new planned
battery manufacturing capacity to drop
by more than half from 2018 to 2023. "
Though pumped-storage technology
has been around for years, other storage
technologies are newer, with the
power generation industry still learning
about the benefits-and challenges-
that storage brings. Financial institutions
and other potential investors in the
space are working to become familiar
with what storage means to the electricity
sector, particularly because projects
have unique characteristics based
on generation sources, location, and
their regional market.
" Energy storage is a unique power
asset in that it can both discharge and
absorb energy, acting as a generation or
storage asset as needed [Figure 1], " Ray
Hohenstein, market applications director
for Fluence, told POWER. " This flexibility
allows it to play multiple roles on the
electric grid, including regulating power
flows, providing critical peak power and
28
1. This Fluence energy storage system is located at Statkraft's Kilathmoy Wind Farm in Ireland.
Such systems enable storage of excess energy from renewable energy projects and provide
flexibility in the dispatch of electricity. Courtesy: Fluence
ultra-fast black start capabilities, and
helping other assets [both generation,
and transmission and distribution (T&D)]
operate more efficiently-all of which reduces
costs as well as emissions. "
" I would say historically, energy storage
is still quite new, " said Jacqueline
DeRosa, vice president of battery energy
storage at Ameresco, in an interview
with POWER. " Energy storage hasn't really
been able to be monetized. "
DeRosa pointed to a program-Massachusetts'
State of Charge Energy
Storage Initiative (ESI)-that addresses
that issue. The program " recognizes the
potential benefits of incorporating advanced
storage technologies into Massachusetts
energy portfolio. The ESI
aims to achieve the benefits by pursuing
a multi-pronged approach to establishing
an energy storage market structure,
building strategic partnerships and supporting
storage projects at the electric
wholesale
system,
utility
distribution
system, and customer-side scale. "
DeRosa said the program " looked at all
the different use cases of energy storage,
and the value it provides to ratepayers.
If you're an energy storage [technology]
that could be used to replace a gas-fired
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peaking plant, that [gas] plant might only
get started a few times a year. The storage
can provide many services, it can
load-follow and provide peaking power.
It can reduce carbon emissions. You can
use the storage resource to do the same
thing that power plant was doing. In every
single use case, it was cost-effective.
Other states have since done their own
studies, and they've found that they need
to put energy storage in place. "
Better Economics for Utilities
" Utilities are finding that energy storage
is a more cost-effective solution for many
grid needs than traditional power generation
or T&D assets, " said Hohenstein.
" In utility territories with high renewable
penetration and where peaking needs
are limited to a few hours a day, many
utilities are finding energy storage more
cost-effective than building new gas infrastructure.
The business case for energy
storage pencils out sooner than it would
for other types of generation. Utilities are
finding they can solve needs faster, address
them with more surgical precision,
and improve deployment of capital and
modernization of the electric grid. "
Researchers from the Massachusetts
POWER | November 2020

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POWER November 2020

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