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Which storage solution is right for you?

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Matt Robinson's picture
General Manager, Operations Technologies and Market Systems PSC Consulting

As an industry leader in the energy transition, power engineering and project delivery, Matt has spent the last 20+ years working across the full spectrum of traditional electricity supply and...

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  • Jul 24, 2020

This item is part of the Energy Storage Insights - Summer 2020 SPECIAL ISSUE, click here for more

Naturally, it depends. As storage technology continues to evolve, energy suppliers and consumers alike are presented with increasing options for deployment. Latest and greatest solutions that take advantage of technology breakthroughs are exciting, but determining when, and in what kind of technology to invest can be a challenge.

For instance, earlier this year, scientists at the University of Southern California developed a new redox flow battery. The benefits are that this battery is based on low-cost and readily available materials and can recharge hundreds of times with virtually no loss of power. Sounds impressive, but does that mean it’s the right storage solution for every case?

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Again, it depends.

Use matters

When considering existing and emerging storage technologies, you must also consider the use of such technology in each case. As a consultant to electric utilities, we consider all applications; small-scale batteries in homes and businesses that link up to deliver kilowatts of capacity, as well as grid-scale batteries rated in megawatts. After use is determined, our next analysis is how any new technology will achieve a client’s objectives and impact reliability, capacity, resiliency, power quality, and overall grid and operational flexibility.

A new class of asset

As an industry, our understanding of storage has matured over time. Now we are starting to think of storage as a separate class of energy assets with multiple technologies creating the systemic solution-set. It’s the same thinking as ‘generation-as-an-asset-class’ where coal, gas, hydro, wind, solar, nuclear, etc., are selected for their use-case within the whole energy system.  This ‘energy mix’ supplies systems with a diversity of fuels and technologies to reduce reliance on a single element in the system, while affording utilities operational flexibility.  The same will be true of storage, and policy is starting to align with this thinking.

No one-size-fits-all

We have come to acknowledge that no single storage technology holds all the answers. Each of the many storage technologies used or in development today have their own optimal operating conditions. Apart from varying construction and O&M costs, the main parameters distinguishing storage technologies are capacity (how much energy is stored) and output (the maximum amount of power that can be produced at any point). Additionally, energy storage has the capability to provide other services that are unique to its fast response rate, such as frequency regulation and inertia to improve grid stability and back up power to increase resiliency.

Ramp-rate and utilization aren’t only for generators

Ramp-rate is another key factor in determining which storage technology is best in each case. In broad-brush terms, electrochemical systems (vs. electromechanical) are quicker to ramp-up to power because they forego the mechanical inertia that must be overcome in electromechanical systems. Another point is that storage doesn’t necessarily follow the same economies of scale as traditional generation. As a general rule, battery storage has better economics the closer it is to the load – in part because you get better utilization of the asset’s potential at that point. So, bigger isn’t always better.

Storage is not a uniform technology, and its intended use is fundamental in deciding what technology to choose. As new technologies are tested and deployed, we’re finding alternative ways to fulfill many use cases. Even though there’s no silver storage bullet, we get closer to our targets when we analyze the use-cases for each opportunity.

Matt Chester's picture
Matt Chester on Jul 27, 2020

As a general rule, battery storage has better economics the closer it is to the load – in part because you get better utilization of the asset’s potential at that point. So, bigger isn’t always better.

Is the impact of this that we'll see distributed storage take off much more rapidly than the distributed generation trend has gone?

Matt Robinson's picture
Matt Robinson on Jul 28, 2020

It will certainly find a natural spot in teh distributed energy space.  Like PV, battery storage is a modular technology so it can leverage the advantages of commoditisation and mass production and the consequent price reductions per unit.  WIth small unit sizes available and it complimenting PV at the household level, it will naturally find a distributed role.

Bob Meinetz's picture
Bob Meinetz on Jul 27, 2020

"As a general rule, battery storage has better economics the closer it is to the load..."

Matt, how are you arriving at this conclusion?

With installation, a Tesla Powerwall with 13.5 kWh of battery capacity costs $15,600, or $1,155/kWh. That's nearly identical to the capacity-weighted average for grid-scale storage, according to EIA.

Wherever it is, storage wastes as least 10% of stored electricity in resistance losses compared to traditional generation, however, and electricity is our asset, not the battery. So no, you don't really get better utilization of its potential.

Matt Robinson's picture
Matt Robinson on Jul 28, 2020

Thanks for your comments Bob and a great question.  My information came from work I've done in Australia on very large industrial installations, mostly mining, whereby the storage component is assessed to optimise an installation's use of cheaper renewable energy.  Your figures appear to be for the upfront capital costs which, as you point out, can be relatively high.  In the industrial setting though, we're looking at quite different products. 

We should think about storage slightly differently to generation and, in a distributed/decentralised energy system, also take into account the value of energy along the suply chain.  At the load, the value of energy to the consumer is higher than the unit-value sold at the point of generation.  Not just from the perspective of tariffs but also the utility it holds for that consumer within their processes. So, the value of each MWh stored is also higher. 

In the case of an industrial load able to strike multiple supply agreements or with a behind-the-meter facility, the ability to time-shift and optimise the use of that cheaper energy holds additional value to that consumer when the storage asset is utilised in concert with the needs of the plant.  Leveraging the modular nature of storage allows facilities to co-locate or associate storage with particular processes.  It also depends on the job you want the storage to do - Spinning reserve,  extend supply to the evening shoulders, supply a particular process etc as to what capacity and rating you need the system to have.

Hopefully, that expains why my experience is that, in some cases, matching smaller storage units to a load or industrial system's needs can limprove the economics.

Matt Robinson's picture
Thank Matt for the Post!
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