Energy Storage: A Key Strategic Element

graphic concept with grass, storage batteries, and windmills

graphic concept with grass, storage batteries, and windmills

Shivam Agarawal, Associate Director, Synergy Consulting, Inc. shares insights:

As global demand and policy support for clean energy continues to grow, successful development of Energy Storage Systems (ESS) or Battery Energy Storage Systems (BESS) projects provide a path for the reliable adoption of renewable sources by enabling grid resilience, flexibility, and cost reduction. Consequently, more than 740 GWh of new energy storage projects are estimated to be added globally by 2030, growing at a CAGR of 31%. Most announced BESS systems are projected to go online by the end of 2024, accelerated by manufacturing, technology innovation, maturing of business models, and global push for clean energy.

As one element of an integrated strategy, battery applications are essential to managing “behind-the-meter” costs for end users and the overall energy supply and demand. Additionally, battery projects can generate value through various avenues, apart from the conventional application of managing the demand and supply of electricity. Key applications include frequency regulation, voltage support, black start, power backup, and reserve capacity, among others.

Offsetting costs are integral to ensuring sufficient economic value for utility-scale storage projects. In ESS, one way it can be done is through energy arbitrage where power is purchased during off-peak to be resold when the electricity price is high. Combined with other applications it is strategically more profitable to focus on applications such as frequency regulation (when intermittent generators are ramping up or down) for grid stability, or transmission and distribution cost deferral for load growth/support.

BESS can also be implemented as a power balancing service limiting grid disturbances while coordinating plant loads. It includes Load Management that balances the network electricity supply and reduces demand during peak usage. Applications like voltage or reactive power support are used for managing the quality of power, and Load Following, which balances power, when implemented together increases value-add.

Additionally, battery systems allow generation time shifting wherein renewable energy can be leveraged to charge the BESS using solar by day or wind during high wind. Storing excess wind and solar generation allows excess energy to be accumulated for use when power is not generated for instance during nighttime in a solar PV project.

Battery applications enable access to a lower-priced reliable supply of electricity, surplus retention, and emergency power supply. Building a strategic ESS framework that incorporates government policy, tariff/contractual structure, and grid flexibility are key drivers to success.