Energy Insights Series Commentary - Bright Power

Many states are moving toward 100% renewable energy goals, leading to a rise in solar and wind power’s popularity. As solar and wind become more cost-effective and attractive, the power industry will need to determine how to manage the excess power created by those resources during peak production times and how to supplement the electricity shortfall when the wind isn’t blowing, or the sun isn’t shining. To help avoid load curtailment, battery energy storage is an ideal solution to integrate with renewable energy systems. So as long as energy storage continues to become more affordable, it’s likely that stand-alone energy storage or storage paired with solar/wind will start to replace natural gas peaker plants that typically sit dormant for most of the year and are too costly to run and maintain.

The ability for utilities themselves to own energy storage will be dependent on each state’s regulatory structure. For example, in New York, deregulated utility companies like ConEdison “own” very little power generation, and instead, act as means of distribution. This will make it more complex for a utility that cannot own energy storage to reap the benefits that energy storage provides to help balance the grid. In states with a regulated utility structure, such as Arizona, utility companies own both the generation and distribution of power. They are therefore able to own and operate energy storage systems as a mechanism to help them integrate increasing amounts of renewable energy onto the electric grid more seamlessly.