The business case for energy storage

Can regulated utilities prove the business case for energy storage?

Many of the most talked about energy storage projects of 2017 were commissioned or supported by regulated utilities. The trend shows no sign of slowing down in 2018.

Utilities in the United States, such as Portland General Electric in Oregon and the Public Regulation Commission in New Mexico are starting to include energy storage in their future resource planning. It can be argued that regulated utilities have an easier time proving the business case for energy storage than in a purely commercial project, as utilities benefit most from the added flexibility offered by storage.

Proving a low cost business case
Tucson Electric Power’s (TEP) solar plus storage facility, a 100 MW solar array with a 30 MW, 120 MWh energy storage system was built by NextEra Energy. TEP claims the lowest price (<$0.045/kWh) over 20 years for any such solar plus storage facility to date, with <3¢/kWh for the solar section of the project. The remaining value of approximately 1.5¢/kWh makes up the energy storage section.

Industry analysts have been skeptical over how such a project could be made viable at this low price, although as the details within the contract are confidential to utility and developer, could only scrutinise publicly available information. Jesse Jenkins, a PhD candidate at the Institute for Data, Systems and Society at the MIT Energy Initiative, maintains that the 3¢/kWh price relies heavily on subsidies and the 30% investment tax credit — without subsidies he estimates project pricing to be around 9¢/kWh. TEP also benefits from the lower co-installation costs of a combined facility.

T&D Deferral
Several regulated utilities have taken on smaller energy storage projects for T&D deferral. Arizona Public Service (APS) is building a 2MW, 8 MWh energy storage system instead of 32 km of new transmission lines to serve a small community. On the island of Nantucket,Massachusetts, National Grid will install a 48 MWh battery energy storage system to replace one of two backup diesel generators and delay installing a new subsea transmission cable.

Emergency response
Large and small energy storage projects were completed this year in response to energy emergencies. Developers in Southern California built multiple energy storage projects in response to gas leaks in Aliso Canyon which affected critical gas power plants.

Tesla’s completion of the 100 MW, 129 MWh energy storage system in under 100 days aimed to fight the South Australian summer blackouts. Currently the largest in the world, even this could be upstaged by a 100 MW, 500 MWh vanadium flow battery storage system in Hubei Province, China.

If you want to know more about these and other topics directly from end users of energy storage technologies join us at one of these events: 11th Energy Storage World Forum (Grid Scale Applications), 16-18 May 2018 Berlin or 5th Residential Energy Storage Forum, 14-15 May 2018, Berlin.

Read the original article


The importance of South Africa as an energy storage market

Could South Africa be an important energy storage market in the making?

A change in president could signal a new era for energy storage in South Africa. New leader Cyril Ramaphosa is expected to restart a previously held back renewable energy programme and provide a more friendly environment to wary foreign investors. Previous leader Zuma was forced to resign under the mounting pressure of corruption allegations involving…

Read More

How Can Energy Storage Systems Reduce Investment Expenditure for TSOs/DSOs?

How Can Energy Storage Systems Reduce Investment Expenditure for TSOs/DSOs?

Our demand for energy continues to grow – and while generation has kept up with demand, infrastructure improvements have lagged behind. Bringing grid infrastructure to modern standards is not a simple task. With most power grids many decades old, Transmission System Operators (TSOs) and Distribution System Operators (DSOs) face expensive decisions. Is it more cost-effective…

Read More

energy storage industry news

Would you like to receive energy storage industry news, free powerpoint presentations and opinion articles from our team?

YESand if I don't like it I will unsubscribe! MAYBE LATERI am busy now thinking all things energy storage