Posted June 11, 2008on:
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.
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.
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.