As utilities consider electricity storage technologies to help make intermittent energy sources, such as wind and solar, more stable sources of grid power, they're finding universal solutions hard to come by. They can select from a diverse array of candidate technologies, but no single option addresses all the application and regulatory demands placed on it.
In its latest report, Lux Research provides the first-ever framework to help business leaders compare today's array of energy storage scenarios, and determine which are most economically viable under specific circumstances.
"Choosing an appropriate grid-scale storage system is a complex issue, and the reality is that there are no silver bullets," said John Kluza, an Analyst at Lux Research and the report's lead author. "Each utility must select a mix of technologies that best address its unique regional needs. Each region poses its own unique blend of regulations, grid structures and end-demands."
Titled "Grid Storage: Show Me the Money," the report details candidate battery and non-electrochemical storage technologies, and evaluates them in two main grid applications – power (short discharge) and energy (long discharge). But it goes beyond cataloguing what is, to provide insights into what might be.
Specifically, the report explores deployment scenarios for energy storage in three representative regions: a congested metropolitan area running on multiple distant power sources, a grid region with more renewable energy and stronger environmental regulations, and an island grid with few electrical interconnections or energy sources.
The report evaluates storage system economics in each regional scenario including the effects of regulation, and offers insight into which combinations of technology, application, and region make the most economic sense. Among its key predictions:
The storage market will stay fragmented for the foreseeable future. The technology that will prevail in each region depends on the needs in that region. Areas that need help meeting their "peak load" are adopting molten salt batteries, or, where possible, below-ground compressed air energy storage (CAES). Ice thermal storage is finding support in regions where air conditioning (AC) is driven by peak load. Lithium-ion batteries are gaining traction in regions with serious grid stability issues.
Regulation continues to slowly open up to storage. As the electricity storage technology becomes more practical and utilities' needs for storage become greater, more regions will begin to encourage storage through incentives or mandates and improved cost recovery options.
New strategies for deploying storage will emerge.
Expect storage suppliers to offer new business models based on various ownership structures, location strategies, and software aggregation. For instance, AEP recently deployed the first pilot of the community energy storage (CES) concept. Beacon Power's model of operating as a vertically integrated electricity storage utility is a new strategy; and Ice Energy repurposed a page from EnerNOC's playbook by selling peaking capacity to utilities, instead of trying to sell hard-to-monetize storage services.
"Grid Storage: Show Me the Money" is part of the Lux Alternative Power and Energy Storage Intelligence service. Clients subscribing to this service receive ongoing research on market and technology trends, continuous technology scouting reports and proprietary data points in the weekly Lux Research Power Journal, and on-demand inquiry with Lux Research analysts.
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