Energy storage industry still has a lot to learn, say analysts


Yuan Sheng Yu, managing consultant at Lux Research, has said stakeholders within the energy sector still have a lot to learn to reap the full value of battery energy storage systems.

During a session hosted at the Enlit Asia 2021 Digital Summit, Yu said a number of technical and commercial challenges are preventing the full benefits of battery energy storage systems being unlocked.

He said the industry still needs more time to learn how to optimise battery system deployment and operation to deliver the energy transition and secure power grids.

“There is still a lot to learn and a lot the industry, end-users, and customers need to know regarding battery energy storage systems application,” applauded Yu. “We expect several new projects to come online over the coming years, not just huge in size and scale, but also new use cases,” owing to factors including continued decreases in energy storage cost and a push by utilities and governments to integrate more renewable energy resources on the grid.

He said the market for stationary battery storage systems will reach $100 billion by 2035.

However, he said the industry needs to take advantage of the lessons learned so far to enable battery energy storage systems to drive global grid resilience.

Yu, added: “For decades, many utilities have modeled the impact of high penetration of renewables on the grid but last year we witnessed the true impact of how many utilities are not ready for future energy systems.

“As a result of COVID-19 and lockdown restrictions, energy demand dropped and renewables reached their highest level on the grid leading to record curtailment. This showed how battery storage is going to be critical in the future for stable grid networks not only because of decreases in energy as experienced in 2020 but owing to increases in solar and wind capacity deployment.”

Challenges to deployment

By leveraging lessons learned so far, he said the industry will be able to address some of the technical and commercial challenges hindering the energy storage market.

Wahha Irfan, manager of reliability programmes, distribution engineering strategy at ComEd, who was also a session speaker, said the regulated nature of the utility industry is one of the main factors challenging growth within the battery market in the US. He said regulation restricts energy companies from exploring the benefits of storage.

Irfan, added: “When utilities are regulated they have to be mindful of their limits and some of the limits include justifying every investment they make.”

However, he said some previous regulations have enabled ComEd to upgrade its grid and deploy microgrid and battery storage systems in Chicago.

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Proving the value of battery storage to gain regulatory approval is another challenge hindering the market, said Irfan. Because the majority of storage systems do not operate on a daily basis, it takes time to gain a proof of concept that utilities can present to regulators for approval, he said.

In addition, grid upgrades and communication challenges associated with the rollout of battery storage are key challenges. For instance, rollout will require cybersecurity software, supervisory control and data acquisition and communications systems to be upgraded, resulting in cost increases associated with storage deployment.

Lars Stephan, market development manager at Aggreko, suggested utilities employ “multi-year resource planning to avoid wanting to upgrade the grid in the near future again.”

Stephan, however, admitted that the industry has a lot to learn about the battery storage sector since the “storage market is still young and maturing.”

He said the challenge his firm is experiencing is proving to utilities the value of the technology. However, he said with the continued decrease in prices and more and more pilots being deployed, the industry will in the near future develop standards that can be applied at a global scale for safe and reliable operations of battery systems.

He reiterated that as the industry gains more knowledge of storage deployment, commercialization will also intensify and the full value recognized and reaped.

Yuan Sheng Yu, Wahha Irfan and Lars Stephan were speaking during the Enabling BESS as the future of global grid resilience session, which explored developments in the battery energy storage space. Find out more about the session at the Enlit Asia website.