It’s not surprising that the recent announcement from Elon Musk touting Tesla’s new “Powerwall” battery has drawn considerable attention from the media and from the energy sector. While some early hyperbole suggests the 7kWh and 10kWw batteries, which are designed to be used with solar power to store energy for homes and businesses, could “revolutionize” the power industry, their arrival has, at least, put storage in a prominent place of discussion in the renewable energy arena.
But as most in the sector know, energy storage is an area that has seen steady growth and innovation for several years and has played a role in our power grid for some time. Flywheel and battery energy storage systems are operating today in the competitive ancillary services power market – providing a 10x faster and more accurate response to a power dispatcher’s signals compared to power turbine generators, according to the Energy Storage Association (ESA).
The association also points out that more than 60 million Americans in 13 mid-Atlantic states plus the District of Columbia are saving money and receiving high quality service thanks to energy storage systems operating in that region.
The ESA says the U.S. energy storage industry comprises hundreds of companies and thousands of American workers building commercial energy storage systems throughout the country. And as the Tesla announcement suggests, the energy storage market is set to explode to an annual installation size of 6 gigawatts (GW) in 2017 and more than 40 GW by 2022 ‑ from an initial base of only 0.34 GW installed in 2012 and 2013, according to the market research firm of IHS.
To carry the analysis beyond our own shores and into actual application, IHS says the global market for grid-connected residential photovoltaic (PV) solar installations coupled with energy storage is predicted to grow tenfold to reach more than 900 MW in 2018, up from just 90 MW in 2014. Just to drive the financial point home, another consulting firm, IMS Research, reports the market for storing power from solar panels – which was less than $200 million in 2012 – can expect to catapult to $19 billion by 2017.
The experts agree that the expanding opportunity for battery manufacturers will largely be driven by the increasing attractiveness of PV for self-consumption, as well as by subsidies and increasing interest from home owners in becoming more independent of the electricity grid.
The push also goes the other way, as noted in a report released in February by the Interstate Renewable Energy Council, which said that among the technologies that can facilitate increased deployment of renewable energy, distributed energy storage – storage systems interconnected to the utility-owned distribution system, on either the customer or utility’s side of the meter – can address grid integration challenges. Distributed storage has the ability to address renewable energy integration, variability management, peak management, voltage and frequency regulation, grid resiliency and energy management, the IREC adds.
Findings by PJM Interconnection, a regional transmission organization that coordinates the movement of wholesale electricity in 13 states and the District of Columbia, shows that storage saves consumers money. PJM projects that just a 10-20 percent reduction in its frequency regulation capacity procurement ‑ made possible by additional storage projects ‑ could result in $25-50 million in savings to residential, commercial and industrial consumers.
Meanwhile, in California, which has one of the most aggressive Renewable Energy Portfolios in the nation (33 percent by 2025, a number that may go up to 50 percent), the Public Utilities Commission (CPUC) has approved a target requiring the state’s three largest investor-owned utilities, aggregators, and other energy service providers to procure 1.3 gigawatts of energy storage by 2020.
At the commercial level, AES Energy Storage, a leader in the sector today, recently announced a roadmap that includes the addition of battery-based storage resources across the U.S., South America, and Europe. Projects in construction or late stage development are expected to deliver 260 MW of interconnected battery-based energy storage, equivalent to 520 MW of flexible power resource, 25 percent of which is expected to be on-line by mid-2016. The projects are in addition to the 86 MW of interconnected energy storage, equivalent to 172 MW of resource, AES currently has in operation.
The innovation, potential and growth of energy storage are being demonstrated every day. The 25x’25 Alliance encourages federal and state policy makers to adopt the programs needed to encourage developing the technology to store renewable electrical energy. Making renewable power available to meet demand whenever needed would represent a major breakthrough in electricity distribution, help secure the reliability of our nation’s electricity grid and optimize the use of existing transmission assets.