Energy storage: The potential to change the industry

Development of electrical energy storage technology and applications in the electrical energy sector is moving ahead in leaps and bounds. All sectors are affected , from generation to consumption, and technology is advancing rapidly towards larger and larger network and grid  installations, while at the same time reducing the cost of smaller behind-the-meter installations. 

Energy storage is an established technology in all sectors of the electricity industry, including generation, transmission, distribution and consumption. Usage at the moment is not widespread but is growing rapidly. Mostly focused on short term storage measured in hours or less.  If one considers the full range of storage needs, to cover periods of low renewable energy (RE) resource for instance, the requirement runs into days, and over the long term into months to cover seasonal variations. At the moment these occurrences are handled by conventional generation sources, but as the penetration of RE into networks increases, the need for longer term storage will increase.

The full value of storage lies in its ability to provide services across a variety of applications,often at the same time. However, barriers exist that limit the ability to capture the full value of energy storage and allocate it across multiple stakeholders: system and non-energy benefits of storage are often excluded in cost-benefit analyses; paths to revenue are often unclear; regulatory frameworks inadvertently limit energy storage; and new business models are still in their infancy.

Fig. 1: Current value proposition of storage (adapted from[3]).

There is a change in attitude in many sectors of the industry from several years ago, when storage was considered to be “too expensive”, to an acceptance of the fact that storage is an essential part of any network that contains a large amount of RE (even if this does make the cost less attractive). Also, increasing attention is being paid to the value of storage in many applications where in the past cost was the prime consideration.

Existing applications are primarily concentrated in areas where energy storage can provide a direct benefit to the system and where markets or rate structures exist which have clear mechanisms to monetise those benefits. The industry is very fluid, with developments moving ahead at a rapid pace, and new applications appearing regularly, so it is fairly difficult to define distinct segments in the market. If behind-the-meter storage is excluded, the generation and network storage sector can be divided roughly into three sectors based on storage time.

  • Short term (STS) (<1 hour): Mainly used for grid support such as frequency support, inertia, reactive power and other short term interventions on the grid. STS is also used to handle short term fluctuations on solar and wind generation, especially in hybrid and off-grid systems.
  • Medium term (MTS) (1 to 4 hours): Used for grid support, peak demand support in generation, and load levelling/expansion deferment on transmission and distribution. Medium term storage is anticipated to replace gas peak generators in some networks.
  • Long term (LTS) (>4 hours): Used to provide long term continuous power in combination with solar CSP and other plant at present

The value proposition of energy storage

A value proposition is a promise of value to be delivered, and in the case of storage is backed up by experience with projects designed to leverage the value of storage in different applications.  In the recent past, the cost of storage was the main item considered when evaluating projects, and storage was often considered to be too expensive. Little attention was paid to value. This situation is changing, and the value proposition is becoming an important consideration when evaluating projects.

The full range of benefits provided by energy storage includes economic, system, and non-energy benefits. Storage benefits the grid economically in the form of increased efficiency and by reducing system costs. Storage also provides system benefits in the form of increased reliability and flexibility. Lastly, storage also provides non-energy benefits such as emissions reductions and helping to achieve clean energy goals [4].

At present, the value proposition of energy storage increases as one moves from the generation sector to the consumer sector, i.e. storage has the most value for the consumer at the moment (Fig. 1). This situation could change radically as the value of storage to generation is recognised.

Generation support

Other than CSP which provides several hours of storage, long term storage is not used extensively for generation support (GS) at the present although there are several projects that aim to provide peaking generation support using medium term storage. There are however, several projects moving in that direction (I would classify any project that provides more than one hour of storage at peak power capacity as generation support), and it is expected that more GS projects will emerge in future as the sector moves back towards the dispatchable energy . The first step in this direction is the use of storage to provide or replace peaking power. Several current projects are shown in Table 1.

Table 1: Generation based LT storage projects.
Project Capacity (MWh) Power output (MW) Hours at full capacity
PG&E California ( four projects) 2270 567,5 4
Slate solar farm 160 40 4
Big Beau solar 160 40 4
Niedersachsen grid 20 4 5
Long Beach, California 400 100 4

Projects which provide 4 hours of storage are being planned to replace ageing gas peaking generation in same networks. Storage is also being combined with solar (on site) to provide peaking power [3]. There are several advantages in using storage to replace gas peaking plant:

  • Storage does not require fuel and is independent of gas price variations
  • No fuel supply network is required
  • No C02 emissions
  • No ongoing maintenance and overhauls
  • Very fast ramp-up times
  • Silent operation

A notable project is the combination 100 MW/400 MWh peaking assist battery planned for  California [1].  This is  probably the first high-energy high-power combinations and the first to be used to supplement generation with stored energy rather than smooth out the short term variations in output of (RE). The storage has the capacity to provide full output for four hours. Recharge time is not mentioned, but would that also be in the region of four hours?

A recent white paper [2] predicts that as renewable energy expands, longer term storage beyond four hours will be required. A survey [4] showed that demand for long term storage will son outstrip the demand for short and medium term, the main applications being renewable energy self consumption, backup power and load shifting. Predictions are that storage of  >10 hours will comprise a significant portion of the total market in the future [2]. In addition, storage is being combined with gas turbine peaking plant to improve performance  and reduce GHG emissions.

Hybrid gas turbine storage

Because of their quick response flexibility to demand changes, gas turbines play a crucial role in electricity supply systems and help match supply to demand. The increasing proportion of non-dispatchable assets like wind turbines and photovoltaics (PV) embedded in the power network pose grid planning and load balancing challenges to managers, particularly given that wind and solar PV are the two fastest-growing electricity generation sources globally.

Maintaining increasing amounts of spinning reserves and frequency regulation compensates for the intermittency of non-dispatchable assets, but presents another set of issues that battery technology can address. Fuel conversion efficiency is compromised with gas turbines running below optimal loads. This, in turn, means that greenhouse gas (GHG) emissions are higher per unit of electricity generated and maintenance costs tend to be higher, as well. Supporting gas turbines with battery energy storage can act as virtual spinning reserves, a form of contingency reserve. In this way, costly inefficiencies are avoided by requiring turbines to operate at minimal loads less frequently [4]. GE has produced a hybrid system consisting of a 50 MW gas turbine paired with a 10 MW Li-ion battery.

Transmission sector

The primary use of storage is for load-leveling and the reduction of congestion (overload) on transmission lines. Storage elements are placed at strategic points in the network to absorb power at low load, and release power at high load, reducing the load on the transmission line. Storage is also used to provide reactive power to improve voltage levels. By reducing the maximum power levels while maintaining energy transfer levels, it is possible to defer upgrades. Other applications are frequency regulation and load following.

Distribution sector

The primary usage here is again load-leveling and reduction of overload, but includes integration of distributed generation, voltage support and back-up power. Storage can also be used to manage substation loading and expansion.

Consumer sector

The market for behind-the-meter (BTM) consumer storage system is expanding and there are a number of products on the market. BTM applications include own use energy storage, energy arbitrage, EV charging and demand side management.  There is a growing move in the BTM solar market from grid feed-in or net-metering to own use, and low cost storage is making this possible. The move is being driven by the reduction or removal of feed-in tariffs and net-metering buy-back rates, and the increase in time-of-use metering.

One of the interesting developments in the commercial/industrial BTM sector is second use EV batteries, which are at end-of-life for cyclical EV operation, but can still function as low-cycle storage devices. An estimated additional seven to ten years life is anticipated when these batteries are used for stationary energy storage. There is at least one hybrid power system in South Africa using second use EV batteries for storage and there are numerous others worldwide.  Several EV manufacturers cooperate with other companies to produce second use EV storage packs for BTM and other small-scale storage use.


Many microgrids are designed to use variable renewable enrgy sources for some, if not all, of their generation needs. As the grid achieves higher levels of renewable penetration, there is a greater need to provide an additional source of power to maintain stability. In the bulk power system this function is performed by the utility, but in a microgrid, operating in an islanded configuration, the intermittency of renewable resources would require additional generation or risk instability caused by voltage or frequency variation.

Energy storage can support microgrids by storing energy and using it to provide voltage and frequency support. In addition, storage can provide benefits, including smoothing variable generation and time-shifting solar and wind to meet peak demand. Finally, storage supports integration when connected to the grid. The ability to island a microgrid is one of the primary focus areas of the project as well as other stacked applications. Storage is an essential component of microgrids, as has been illustrated by the inclusion of storage in a number of industrial microgrids.

Benefits stacking

One of the challenges with storage is the fact that in single use applications the unit has a very low duty cycle, and is idle for a large portion of the day. For instance in the case of peak generation assist the storage system will only be active for between four and six hours of the day and idle for the remaining 18 to 20 hours. Benefits stacking is aimed at putting the storage to use by providing other functions during the idle hours, while not compromising the main function.

A crucial component of the value of storage is its ability to support multiple applications — and thus value streams — at the same time. In many energy storage applications, the delivery of the primary service may only take up to half of the storage system’s capacity. Using the remaining capacity in other applications allows the system to provide multiple, stacked services that create additive value for the system. A compelling case for benefits stacking is the application of energy storage to defer transmission or distribution system upgrades. In a deferral application, an energy storage system is only required a few times a year when peak demand on the system exceeds existing capacity. In a single application environment, the rest of the time the system would be idle.

Regulatory and legislative issues

One of the problems facing storage is regulation. How should storage be classified: as generation or consumption? If the answer is generation then the possibility of generation licencing and operational standards must be considered. Energy storage has the potential to transform the power system and fundamentally change the way we think about energy. However, it is a hybrid asset, neither generation or load, and does not neatly fit into our established grid categories.


[1] M Mhukanova: “The value of energy storage – enabling renewable energy”, SAESC 2018.
[2] M Niggli: “Beyond four hours: The transition to a more flexible, and valuable, long-duration energy storage asset”, ESS whitepaper.
[3] D Staker: “Its about time and location”, SAESC 2018.
[4] J Hewett, et al: “Beyond renewable integration: The energy storage value proposition”, American council on renewable energy, 2016.
[5] C Evans: “Further beyond 4 hours: Revisiting long duration storage”, ESS whitepaper.

Send your comments to


The post Energy storage: The potential to change the industry appeared first on EE Publishers.

Source: EE plublishers

More news