HomeIndustry SectorsEnergy EfficiencyStorage, boon or bane for utilities?

Storage, boon or bane for utilities?

According to Engerati  the energy industry is sitting on the edge of its seat as researchers race to find the best and most-cost-effective energy storage solution.

Affordable energy storage is the missing link to a clean, reliable, flexible, affordable and decentralised energy future. The right solution will prove to be a major game-changer for the entire sector as well as its power consumers. Utilities will need to revise their business models in preparation for onsite energy storage solutions which may see a number of consumers go off-grid to become prosumers.

Tesla Motors has announced that it aims to sell cost-effective battery packs to anyone who wants to buy them. The company plans to develop a US$5 billion factory to supply cheap batteries for its latest electric vehicle model, as well as storage solutions for energy storage.

With this kind of investment on the horizon, it seems that energy storage may be nearing a tipping point. This will certainly have an impact on the grid, utility business models and infrastructure. Chris King, chief regulatory officer, eMeter, a Siemens business, says that while economics are improving, storage remains cost-effective today only in certain situations. He points out that storage has the potential to revolutionise the grid at substantially lower costs.

In the distribution grid as platform business model, the distribution operator could easily integrate intermittent and distributed renewable resources into the grid. Low-cost storage would solve many current challenges caused by fluctuation in distributed energy supply and the inability of grid operators to turn such resources on and off as required. Even with such storage, a smart grid that has communications, sensors, and controllers, is needed to operate efficiently. Fortunately, that challenge can be solved with today’s digital technologies

Building and water thermal storage have already been used effectively – think of night-time electric water heating in Europe – but have far greater potential than seen in the past. Lithium-ion batteries are a popular choice and are being tested in major experiments, such as Southern California Edison’s project which uses this battery to offset fluctuations in wind power production in the mountains north of Los Angeles.

Energy storage will be a key-enabling technology in the smart grid, King says. “The physics of electricity create the unique difficulty that supply and consumption must be balanced in real-time – every four seconds in a typical grid. Beyond being fast, such balancing must be very precise; otherwise, voltage and frequency go out of range and destroy electrical and electronic equipment.”

In the past, central generation stations have increased or decreased output to achieve balance. However, with decentralised power production by wind and solar – which usually has priority access to the grid – other tools are required. “Cost-effective storage is the answer.”

Some traditional utilities may view energy storage as a glaring threat to existing business models. Utilities, unable to provide storage on the grid, may see customers turn to alternative providers. However, utilities can make energy storage work for them too as long as utilities have the ability to control power flows either directly through automated distributed energy management systems or indirectly through dynamic prices and maximum demand charges for distribution service.

King says that whether storage will be a boon or bane to utilities depends on a number of factors. These include how the storage is implemented, the regulations applying to the situation, the financial incentives provided by policymakers to utilities, and the financial costs and benefits of the storage itself. “In the end, such storage should be a friend, so long as we get the policies, regulations, and technologies right.”

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