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Hybrid Distributed Systems with Storage are the Future

image credit: Illustration 136764238 © Peter Varga - Dreamstime

This item is part of the Special Issue - 09/2019 - Distributed Energy Resources, click here for more

Price reductions for solar and storage are changing the utility landscape. Cost-effective battery energy storage systems (BESS) are creating new value streams and opening markets for many new applications. Some of these value streams are location-agnostic, but many of them require a distributed deployment.

Energy storage actually provides more value in distributed systems than in central or utility-scale applications. For example, batteries can increase the resilience and reliability of energy service, but only if they are on the customer’s side of the distribution system. That’s because the vast majority of outages are caused by disturbances in the distribution system.  Distributed BESS’ can also provide value for utilities including T&D deferral, voltage and VAR support, and for customers, demand charge management, and energy cost management under TOU rates. All of these value streams are becoming more important as renewable energy penetrations increase.

A recent study by the U.S. Department of Energy Lawrence Berkeley Laboratory, which used HOMER® Grid to calculate customer savings, provides interesting insights on how storage creates value for different types of utility customers.  But that value depends on the design of utility rates and the ways in which customers use energy. The economic impact of storage still varies widely from state to state and from utility to utility, but the study unearthed some key principles. In general, the researchers found that energy storage is most effective at reducing demand charges when its use coincides with peak utility rates. It is also most effective when the customer has a “peaky” or “narrow” load curve, such when the solar production drops suddenly at the end of the day ,but the load is staying high. When utilities have implemented Time-of-Use rates, battery energy storage can also create value by discharging when energy is most expensive. This aspect of energy storage may eventually become even more valuable to customers than saving on demand charges, the researchers found.

I will be presenting these ideas at the upcoming Distributed Energy conference [ https://www.distributedenergyconference.com/ ] taking place in Denver, Colorado on October 30 and November 1.

Using the HOMER software, we will show quantitative results for distributed storage applications at facilities in different locations and with different load profiles and tariff structures.  This will illustrate where we expect the market for BESS to be increasing and what markets are best for developers to target. The widespread deployment of distributed storage, particularly in a hybrid configuration with solar - has the potential to evolve into an entirely new electric power industry structure.

This content was provided by HOMER Energy, the developer and distributor of the HOMER software, the global standard for energy modeling tools that analyze solar-plus-storage microgrids and other distributed energy projects. HOMER software determines engineering and economic feasibility by simulating complex off-grid and grid-tied distributed energy systems that combine conventional and renewable power, storage, and load management. Learn more at www.homerenergy.com, and read more content like this at www.microgridnews.com.

Dr. Peter Lilienthal's picture

Thank Dr. Peter for the Post!

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Matt Chester's picture
Matt Chester on Aug 26, 2019 1:42 pm GMT

In general, the researchers found that energy storage is most effective at reducing demand charges when its use coincides with peak utility rates. It is also most effective when the customer has a “peaky” or “narrow” load curve, such when the solar production drops suddenly at the end of the day ,but the load is staying high. When utilities have implemented Time-of-Use rates, battery energy storage can also create value by discharging when energy is most expensive. This aspect of energy storage may eventually become even more valuable to customers than saving on demand charges, the researchers found.

Really well put-- energy storage is not a one size fits all solution, but when targeted at the right users can have a big impact, both economically & in terms of helping out the grid

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