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Perspective

Five Reasons Why Battery Storage Will Take Off

Five Reasons Why Battery Storage Will Take Off

One of the noticeable effects of worldwide efforts to contain the spread of the COVID-19 pandemic has been improved air quality, particularly in urban areas. Stay-at-home orders and a decrease in global travel have been cited as driving down emissions and pollution but attributing all these improvements to behavioral changes can be somewhat misleading.

While reduced vehicular traffic is no doubt the reason for some of the current improvement, particularly in heavily congested areas, a noticeable portion of the effect can be traced to reduced demand for – and the steadier output of – electricity. By reducing the need for power plants to operate at peak levels, suppliers can maintain a steadier supply to meet local needs, resulting in more efficient and cost-effective production.

Integrating energy storage technologies like lithium-ion battery energy storage systems (BESS) at fuel-fired facilities can help increase operational and cost efficiencies, offering power developers and utilities new levels of opportunity when it comes to extending the life of their existing assets. Hybrid systems with the ability to store power – as well as generate it – contribute to greater overall efficiency, while also helping to alleviate the need for peak-time plant operation.

BESS solutions can be installed for use with existing fuel-fired generating assets and are particularly suited for use at younger, gas-fired plants. By helping to extend power plant life spans, investors will see improved revenues and returns. Looking ahead, expected advancements in thermal energy storage (TES) systems will help usher in a future wave of power generation that can be scaled at will to respond to variable needs.

Black & Veatch has identified five ways in which BESS systems will benefit electricity grid:

1. BESS Can Improve Grid Resilience

We all recognize that grid resilience is more critical than ever before. The energy landscape is changing rapidly as variable renewable energy, distributed energy resources (DER) and electric vehicles affect load, change the generation profile and create new strains on the grid. As a result, variances in load and generation are among some of the largest challenges facing the electric industry today – and will likely become even more challenging in the future.

The extreme variation created by industrial needs, customer demand and weather conditions produce deviations that sometimes defy prediction. Although fast and flexible generation sources such as new gas-turbine facilities represent one partial solution, BESS adds another layer of balancing protection. BESS provides the ability to resource stored power quickly, easily and effectively, and shortens the response time when the need becomes critical. The existence of such hybrid facilities offers viable rapid response to grid fluctuation, shorter run times with fewer starts and stops and lower ramp rates.

As more hybrid facilities come online, the hope is that there will be fewer incidents when the grid can be caught short. Flexible generation sources will be able to address imbalance and restore normal frequency operation.

2. BESS Can Help Improve Plant Performance

Battery storage serves as a method to optimize gas-turbine performance, helping to balance supply and demand, while at the same time allowing plant managers to optimize turbine performance levels. Flexible BESS storage durations will help to avoid short turbine run times, and reduced start-stop cycling of gas-turbines will serve to increase their operational life cycle. Reduced “wear and tear” translates to lower costs, offering savings over the long term. And we believe that the beneficial effects will only become more recognizable as additional variable energy is added to the grid. BESS will be increasingly important in reducing the magnitude of gas-turbine ramping required to meet grid demands.

3. BESS Will Boost Sustainability of Existing Assets

Integrating BESS now to existing gas-fired generating plants offsets and reduces overall emission rates. With a concerted national and perhaps global effort to curb emissions, the industry will face less pressure to decommission existing assets in the future. As we have previously explained, we envision a scenario that allows clean, efficient gas-fired generating stations to remain a valuable part of the energy scene. We are all committed to cleaner, more reliable energy. BESS and other alternatives for improving operational efficiencies at gas-fired plants will make that goal more achievable.

4. BESS Will Only Become More Economical

Solar and wind technologies were once incredibly cost-prohibitive, but as technology improved and demand grew, prices declined. We expect to see a similar trend in lithium-ion batteries – as public demand for mobile devices and electric vehicles increases, economies of scale will drive down the cost of batteries. In fact, battery storage is already one-quarter of the price it was 10 years ago, and estimates expect it to be less than half of today’s price by the end of the decade.

Battery storage will also become far more efficient. As more renewable energy comes onto the grid, the capacity factors of base-load generators will decrease and become less efficient, resulting in higher emissions and increased fuel consumption. This leads to substantial revenue loss over time. The addition of integrated BESS can serve to lessen the impact. In addition, BESS can be a source of ancillary services for grid support, including frequency regulation, power quality applications and primary or secondary frequency reserves. Such services represent additional revenue streams for the industry.

5. BESS Can be Deployed Quickly

Fast deployment delivers immediate effect. The impact of hybrid solutions – adding BESS to existing generation – has been demonstrated in markets as diverse as Germany, the U.S. and Southeast Asia. BESS is deployable for new builds or for retrofits at existing plants, and megawatt-scale deployment in less than 100 days, from contract to commissioning, is not overly ambitious and the results are impressive. The relatively low capital cost of lithium-ion battery storage systems makes the option attractive for operators across a wide spectrum of use cases.

Conclusion

Studying the electric utility response to the COVID-19 pandemic can translate to valuable knowledge in a post-pandemic economy. The key is to concentrate on increased operational and cost efficiencies. Long-term planning must focus on investment to extend the lifecycles of existing power plants and to ensure that existing assets are used wisely in the future. We believe that these hybrid systems have an important role to play, not only for the immediate term, but well into the future of energy generation in this country and around the world.

 

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