Energy Storage: It's Not Just Load Leveling Anymore

Fortnightly Magazine - August 1998
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ACCORDING TO ONE RECENT SURVEY, MORE THAN HALF THE U.S. population now lives in states with customer choice. Moreover, industry executives expect 20 to 50 percent of these customers to choose a new electricity supplier by year end. %n1%n

With changes expected in the way electricity is generated, delivered and sold, exerting pressure on prices, what does the future hold for energy storage technologies?

After all, restructuring efforts appear most active in the highest-cost states -- those with average electricity prices running above 7 cents per kilowatt-hour. %n2%n This focus on price should create demand for new technologies, including energy storage. Residential customers show no sign of turning away from telecommuting and home offices, with all the attendant computer-driven equipment. They can be expected to demand premium and convenience services such as power quality and short-term back up. Some customers may request storage to supplement renewable generation, such as photovoltaics and wind power. Industrial customers, striving to increase productivity, will likewise rely more and more on storage systems.

Moreover, storage technologies should see heightened demand as well in wholesale markets. Most of the state restructuring legislation is likely to result in reductions in electricity rates. Achieving those cuts will require diligence and creativity from power producers and marketers. Fundamentally, however, suppliers must reduce the cost of generating and distributing electricity. Consider pumped storage, a mature technology that is playing in competitive markets.

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