Community microgrids raise questions about the role of the utility franchise, versus the free market.
The intelligent grid cannot be achieved without energy storage.
industry searches for novel ways to handle the increasingly greater demands being placed on U.S. energy infrastructure. Indeed, a growing number of next-generation storage solutions are being piloted that lend themselves to the development of the intelligent grid.
At present, the only electricity-storage technology under widespread use is pumped hydro stations, with over 100 GW of storage capacity worldwide—equivalent to roughly 2 percent of global generation capacity. But this resource is not likely to grow significantly given its geographic limitations and regulatory checks. Research, development and deployment (RD&D) activities exploring a range of other advanced energy- storage arrangements are, however, underway and accelerating. Many of these technologies offer the ability to satisfy a range of applications helpful to alleviating transmission and distribution system constraints in a potentially economic way. Moreover, efficiencies are likely to rise with greater development and grid integration of these technologies, and, in turn, increasing familiarity with their operation (see Figure 1) .
To be sure, storage technologies face a number of considerable, though surmountable, barriers to mainstream commercialization and adoption. Cost—from both a power (megawatts) and an energy (duration of storage) perspective—and return-on-investment horizon are the foremost obstacles. Most advanced storage technologies are, however, likely to see decreases in capital cost as the cumulative number of projects increases.
Beyond sticker shock, storage technologies have been unable to justify significant utility investment given that the applications they perform often compete with cheaper conventional alternatives. For instance, it’s often more cost effective to build a natural gas peaking plant that offsets the variability of a wind farm than to build a dedicated storage solution to serve the same function. Furthermore, attempts to add functionality to storage systems in order to offset initial capital costs generally have been undermined by both inherent technical conflict and split incentives for stakeholders. For example, individual applications such as load leveling, spinning reserve, and backup reliability provided by a singular storage unit compete amongst themselves, consequently cannibalizing respective value streams.
Meanwhile, various storage applications tend to offer scattered value to a diversity of stakeholders, thereby raising questions about who should buy and own energy storage systems. For example, a 1-MW sodium sulfur (NaS) battery installation at a Long Island, N.Y., bus company was paid for by the local utility, the local transmission company, the state power authority, and the bus company. Accurately determining respective project costs and benefits proved to be a difficult, if near impossible, undertaking. Moreover, assigning value and fiduciary responsibility to energy storage’s disaggregated benefits is further compounded by a utility sector inertia that can obstruct the level of cooperation necessary for multi-stakeholder collaboration.
Still, continued grid constraints and associated reliability concerns, ambitious goals (mandates, in many cases) to integrate intermittent renewable energy (RE) resources, intraday energy arbitrage benefits, and emerging greenhouse-gas reduction initiatives are helping to economically justify utility-scale storage projects. In this environment, manufacturers are ratcheting up efforts to develop and test new storage solutions. And utility companies are, for their part, also beginning to more aggressively collaborate on, and deploy, energy storage to satisfy progressively more cost-competitive applications.