Emerging energy storage use cases and factors driving utility adoption

Smart Energy International hosted a webinar on the 25th of February 2021, which explored some innovative energy storage use cases that are seeing widespread adoption.

During the webinar, Dr. Marek Kubik, managing director, Fluence, and Suleman Khan, the CEO of Swell Energy, discussed the challenges and benefits utilities and consumers are recording from the energy storage use cases.

Why utilities and grid operators are struggling with DERs

Khan explored some of the challenges associated with the deployment of distributed energy resources (DERs) and how these challenges are driving utilities into adopting energy storage technologies.

These challenges include:

  • Procurement of generation tends to be centralised and the deployment of DERs (PV) under Net Energy Metering programme has been viewed as expensive.
  • Aging grid infrastructure burdens utilities with expensive T&D upgrades and utility direct ownership or operation of DERs is not common and often fails at customer experience.
  • Utilities struggle to keep up with the demands of a digital-first customer base and high customer churn in deregulated markets.

The importance of energy storage and trending use cases

Although the evolution of energy storage applications varies in different areas of the world depending on the challenges, decarbonisation, decentralisation, democratisation, digitisation and connectivity are key factors driving an increase in energy storage adoption, said Khan.

For instance, energy storage arbitrage adoption is increasing in the UK and Ireland. Germany has also been identified as a leader in the behind-the-meter energy storage market.

On a global scale, renewable energy has grown over the past 15 years hence the need for energy storage. As demand grows, so does the need for capacity from DERs. This poses a huge challenge for utilities and grid operators, that will employ energy storage to allow the expansion of their renewables portfolio.

“Most grids we have now are interconnected, where you have DERs it makes sense to use energy storage,” said Khan.

Frequency regulation. This type of application helps grid operators to incorporate more renewables into their grid and to ensure the reliability of their grid as more thermal plants are aging and unfit to meet growing demand. Energy generated during times when demand is low and generation is high is able to be stored for use at later stages when demand is high and generation is low.

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Energy storage is also being leveraged for generation enhancement. This allows grid operators to deliver reliability and security as well as retire fossil fuels. Storage also allows the removal of some transmissions and distribution networks. This would in turn reduce the costs for grid expansion and modernisation for network operators.

Emerging energy storage use cases

Kubik presented three emerging innovative energy storage use cases. Amongst them is clipping solar with storage. This use case allows grid operators to provide flexible capacity by absorbing excess energy generated and discharging it at peak demand.

An example of a project where solar has been paired with storage is AES Gener’s 180MW solar + 112MW/560MWh energy storage project, Andes Solar IIB, in the Antofagasta region in Chile.

Combining solar with storage allows prosumers to offer grid services that standalone solar cannot.

However, regulatory support is vital and much needed to accelerate the deployment of hybrid solar+storage systems.

Israel is a good example of a country leading the adoption of such systems, owing to the implementation of supporting regulation. It is mandatory in Israel that every solar project has 4 hrs of battery capacity.

Energy storage as virtual transmission to avoid or defer building new energy transmission lines. This use case enables grid operators to operate existing lines closer to thermal stations, as well as alleviate congestion caused by increasing renewable generation, among other benefits. This would help reduce costs associated with network expansion, as well as help operators to offer additional ancillary services.

A case study of this use case is the Gridbooster 2x100MW/100MWh project in Germany.

Energy storage as a virtual dam. This use case would help grid operators to optimise dispatch through output time shifting, expand capacity revenues, provide additional ancillary services and turn irrigation flows into peaking power capacity.

An example of a project leveraging the use case is the Alfalfal 1 hydro power plant, which includes a 10MW/50MWh energy storage system, in Chile.

Speakers reiterated that energy storage will play a key role in accelerating the energy transition and in ensuring grid resilience in future energy business models.

Commenting on the power outage that swept across Texas due to the winter storm that hit the state in late February, Khan said: “10 years from now, what happened in Texas will not happen again,” if the state expands its energy storage rollout for grid resilience.

In a separate whitepaper released by the US Energy Storage Association (ESA), in partnership with the Smart Electric Power Alliance (SEPA), highlighting the five key factors impacting utility business models for energy storage, Robert Tucker, director, industry strategy at SEPA, said: ”Energy storage, more so than other asset types, requires utilities to think creatively in order to realise potential value streams.

“This report highlights the business models we see utilities using to extract these value streams to the benefit of the grid and customers.”