Energy Storage

Energy storage systems are enabling technologies; their goal is to enhance and extend the operating capabilities of other assets on the grid.

Although electricity cannot be (cheaply) stored directly, it can be easily stored in other forms and converted back to electricity when needed.

By decoupling the production and consumption of electricity, resources such as solar and wind energy that may normally not be cost-effective can be made competitive and viable solutions to a far wider set of energy needs.

Electric power has a tremendous weakness; it must always be used precisely when it is produced. Based on this tenuous balance of supply and demand, its inherent monetary value also changes by the hour.

Storage not only helps marginally competitive resources get around these limitations, but can also improve the economic efficiency and utilization of the entire system.

By optimizing the existing generation and transmission assets in the market, less capital is needed to provide a higher level of service – while giving energy sources such as renewables more opportunities for development.

Energy storage business models

Energy storage facilities can interact in the electric value chain within three ‘business models’ which correspond to the market areas where they will interact: wholesale, retail and renewable.

Within the wholesale market, large-capacity storage facilities are able to arbitrage power generation from night- to daytime peak prices. These facilities also provide ancillary services to the grid, to promote stability and provide for power transfers across the grid.

Technologies include

pumped hydro,

compressed air energy storage (CAES),

superconducting magnetic energy storage (SMES) and

flow batteries (fuel cells).

In the retail market, small-scale energy storage facilities provide energy management, power quality and power reliability services to end-use consumers. By providing ‘clean’ and reliable power and a ride-through capability in the event of a power outage, a manufacturer can get back to his business with peace of mind – and a lower utility bill. Technologies include batteries, flywheels and thermal storage.

Renewable energy storage strategies include both wholesale and retail strategies that leverage the strengths of renewable resources.

Three general strategies correspond to the level of integration to a transmission system: off-grid, distributed generation support and baseload wind concepts.