Energy storage a tricky issue for utilities

No single solution fits all purposes, report says.

With renewables becoming an important part of power supply, electricity storage is a challenge facing utilities.
With renewables becoming an important part of power supply, electricity storage is a challenge facing utilities.

As utilities consider electricity storage technologies to help make intermittent energy sources, such as wind and solar, more stable sources of grid power, universal solutions are hard to come by. While a diverse array of candidate technologies are available, no single option addresses all the application and regulatory demands placed on it.

“Choosing an appropriate grid-scale storage system is a complex issue, and the reality is that there are no silver bullets,” said John Kluza, an analyst at Lux Research. “Each utility must select a mix of technologies that best address its unique regional needs. Each region poses its own unique blend of regulations, grid structures and end-demands.”

In a report entitled “Grid Storage: Show Me the Money”, Lux Research have predicted some key trends in energy storage, based on the analysis of three representative regions: a congested metropolitan area running on multiple distant power sources, a grid region with more renewable energy and stronger environmental regulations, and an island grid with few electrical interconnections or energy sources.

Its three key conclusions are:
The storage market will stay fragmented for the foreseeable future. The technology that will prevail in each region depends on the needs in that region. Areas that need help meeting their peak load are adopting molten salt batteries, or, where possible, below-ground compressed air energy storage. Ice thermal storage is finding support in regions where air conditioning is driven by peak load. Lithium-ion batteries are gaining traction in regions with serious grid stability issues.

Regulation continues to slowly open up to storage. As the electricity storage technology becomes more practical and utilities’ needs for storage become greater, more regions will begin to encourage storage through incentives or mandates and improved cost recovery options.

New strategies for deploying storage will emerge. Expect storage suppliers to offer new business models based on various ownership structures, location strategies, and software aggregation. For instance, AEP recently deployed the first pilot of the community energy storage concept. Beacon Power’s model of operating as a vertically integrated electricity storage utility is a new strategy; and Ice Energy repurposed a page from EnerNOC’s playbook by selling peaking capacity to utilities, instead of trying to sell hard-to-monetize storage services.



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