Growing demand for renewable energy, an aging electrical grid, costly grid infrastructure improvements, and increasing extreme weather events will require increased energy flexibility to help the grid balance intermittent supply with responsive demand. Energy storage systems &#; like battery storage &#; are ideal candidates for providing this flexibility. In addition, these systems offer a wide range of benefits to energy users. In this blog, find out what battery storage is and what value it can add to your organization.
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At its core, energy storage unlocks energy flexibility, allowing it to play a critical role in balancing electricity supply and demand, making the electrical grid more reliable and cleaner. Energy storage systems can store surplus energy and dispatch flexible capacity to support the electrical grid during peaks of energy demand, such as when temperatures are high, or when intense weather events and power outages occur.
There are four basic types of energy storage:
Although over 90% of the world&#;s energy storage capacity is still pumped hydro storage, battery storage is catching up, accounting for the majority of new storage capacity installed. Lithium-ion batteries, in particular, are favored for their high energy efficiency, density, and long cycle life.
There are some key characteristics of battery storage:
Most commercially deployed battery energy storage systems have storage durations of two to four hours, used for short-duration applications like ancillary services and shaving demand peaks. As the grid further decarbonizes and balancing intermittent energy resources like solar and wind become more critical to the transition to a decarbonized grid, the use of longer duration energy storage systems may be warranted.
While lithium-ion batteries can discharge for a long time, a sweet spot is around two to four hours, based on the economics. For longer duration applications, alternative technologies may be required.
This is a mockup of an Enel innovation project: a gravitational energy storage system, which integrates Enel&#;s recycling of decommissioned wind turbine blades into the weights used by Energy Vault&#;s gravity-based energy storage system.
Because battery storage is flexible &#; meaning it can spin up and ramp up quickly &#; it can provide a wide range of services to keep the grid in balance. It can also enable your organization to be more flexible in its energy usage and generate revenue from a variety of value streams. Below we describe the main services that battery storage provides to three stakeholder groups: energy markets, utilities, and customers &#; per RMI&#;s framework introduced in The Economics of Battery Energy Storage.
Source: The Economics of Battery Energy Storage
Distributed energy resources (DERs) refer to the smaller energy generation and storage systems located on the consumer&#;s side of the meter for use on-site (i.e., behind-the-meter). They are typically connected to the lower-voltage distribution network, hence the name &#;distributed.&#; Distributed battery energy storage systems have different applications than the utility-scale storage systems that are typically located front-of-meter on the transmission network. Distributed applications pertain to the &#;customer services&#; stakeholder group mentioned in the previous question. In the remainder of these questions, we focus on these battery energy storage systems located on the consumer side of the meter, and omit &#;distributed&#; for brevity.
The main benefit is energy cost savings. Energy-intensive industries spend a large percentage of their operational budget on their energy bills, every year. In addition, increased pressure to decarbonize from both regulators and stakeholders are driving the need for organizations to more holistically assess how and when they are consuming electricity from the grid. When optimized for your facility&#;s consumption pattern and utility tariff, battery storage can help you charge and store excess energy when prices are low and switch your consumption to the stored energy when prices are high.
From demand charge management (both when the grid is at its peak and when the facility is at its peak), time-of-use energy arbitrage, and, when applicable, revenues for providing grid services like demand response
There&#;s also a growing need for on-site backup power, which battery storage, when paired with backup controls, can serve to provide. For example, Enel completed in a solar + storage microgrid at Alltown Fresh service station in Ayer, Massachusetts to support continuous power for service stations near evacuation routes across the state during emergencies. By integrating the system behind the same meter, on-site solar power will help charge electric vehicles (EVs). During a grid outage, the facility&#;s critical loads can continue to be powered.
Probably not. There are two main components to installing a battery energy storage system at your facility. The first is the technology piece, which includes both the hardware and optimization software. Similar to a GPS navigator guiding you home, the optimization software is what analyzes information in real-time to determine optimal operation of your system &#; like when and how much to charge and discharge at any point in time.
The second is the operation of the hardware and optimization software to maximize the system&#;s value. You could capture some value by operating the system according to a set of simple rules. However, capturing the full value of a battery energy storage system requires tapping into multiple value streams, sometimes simultaneously, such as:
Capitalizing on all available value streams requires specific knowledge and expertise about using and constantly updating the optimization software, accessing wholesale energy markets, and maintaining real-time dynamic tariff libraries to unlock this full stack of value. Therefore, we recommend that organizations work with a trusted energy partner, like Enel, who can interface with the complex market dynamics and diverse set of stakeholders like grid operators, utilities, and government agencies. Enel has more than 20 years of experience in this department.
For certain projects, Enel can help finance for you. Enel makes this possible through flexible financing options, which are different variations on a benefit-share agreement. Under such an agreement, Enel puts up the upfront capital cost for the battery energy storage system &#; meaning that your organization can retain your capital on your core operations, while still benefiting from battery storage. Through the life of the contract, you split the benefits (energy bill savings and grid revenues) with Enel, according to a pre-determined split.
As a result, your organization shares in the value created by the battery energy storage system, with no downside risk. Enel recoups its original investment with its split of the generated value. This zero-capex financing model is only made possible through Enel&#;s ability to underwrite future (uncertain but predictable) value streams. At Enel, we are confident in our ability to deliver on the full value of battery storage &#; and you can rest assured that through our partnership, we have aligned incentives to drive optimal performance for the system.
Lithium-ion battery storage has a great safety record. Tesla, a top energy storage system integrator worldwide, with more than 15 GWh of installed global capacity (as of ), has had only three confirmed fires. None of these incidents were behind-the-meter systems that require more stringent safety standards. Based on investigation reports, these incidents were primarily caused by improper installation of the system, meaning that these risks can be entirely mitigated through proper installation and maintenance.
At Enel, we adhere to the strictest industry standards of safety:
Beyond what industry standards require, we strive to work out of the box in the development and sharing of best practices, both internally and externally:
Our battery units are housed in containers, connected to the electrical grid, and safeguarded by advanced safety features, which are monitored 24/7 digitally and remotely for safe operation. Throughout the development and construction of our battery energy storage projects, we work closely with local fire departments to meet the safety requirements in our communities. Enel is a party to fire safety standards such as NFPA 855 (a member from Enel sits on the committee) and a member of the Energy Storage Association. We&#;ve also signed the Energy Storage Association&#;s Corporate Responsibility Pledge, further demonstrating our commitment to safety when deploying energy storage resources.
That is what we strive for. A battery energy storage system is composed of a container, batteries, a power conversion system, HVAC thermal management, fire suppression system, and other system controls and communications. At their end of life, systems are collected, sorted, and disassembled. While most of the system components can be recycled through direct processes (like for scrap metal and electronics), the battery modules require special treatment for the processing and recycling of lithium-ion batteries.
Depending on the chemistries used in the lithium-ion batteries, there are different processes for extracting and reusing the raw materials. At a high level, waste batteries are mechanically crushed, dried, and sieved into what is referred to as a &#;black mass.&#; Precious metals are then extracted from the black mass through pyrometallurgy and hydrometallurgy:
In evaluating these processes, it&#;s important to consider their environmental and resource impacts. Many studies have found that hydrometallurgy is a more suitable recycling method than pyrometallurgy, as it allows for a higher recovery of precious metals with lower energy consumption, greenhouse gas emissions, minimal air emissions, and purification. However, this may change as new technologies and improvements become economically viable.
Looking ahead, Enel is committed to best practices for sustainability and circularity. At the system&#;s end of life, we will work with our suppliers to pursue the most sustainable recycling or repurposing applications.
A long-awaited win in the Inflation Reduction Act of is the new eligibility of standalone energy storage for the 30% full credit investment tax credit (ITC). Previously, standalone energy storage systems had to be attached to a solar PV or wind system to be eligible for the upfront investment incentives, and they had to charge from that system 75% of the time. Now that standalone energy storage qualifies for the ITC, these requirements are no longer necessary to qualify for the incentive.
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This gives energy storage projects, like lithium-ion batteries, more siting and operational flexibility &#; as well as the ability to capture additional value streams like energy arbitrage, ancillary services, grid stability services, and more. Beyond the 30% full credit, there are opportunities to layer on bonus tax credits for meeting certain requirements on domestic content, energy communities, and low-income communities. Learn more about how to make the most of the Inflation Reduction Act tax credits.
You may be a good candidate &#; but a feasibility study is needed. Battery storage can be a good fit for organizations that want to reduce their energy costs, improve energy resilience, and reduce their carbon footprint. However, the specific benefits and costs will depend on several factors, including your energy usage, location, and project complexity. It is recommended that you first conduct a feasibility study to determine if battery storage is the right fit.
Industries that have high energy costs (due to energy usage or high tariffs) are good candidates for battery storage. Industries that fall into this category include commercial real estate, industrial manufacturing, data centers, governments, and schools. Battery storage is particularly well-suited for industries that operate during peak demand periods, as it can help reduce peak demand charges.
Location is also important &#; states like California, Massachusetts, Connecticut, and New York have storage-specific incentive programs. These incentives can help offset the initial cost of purchasing and installing a battery energy storage system. It is important to identify all potential value streams to see if a project at your site will make economic sense. Contact our team today for a tailored battery storage strategy and to find out how much value you can unlock by installing a system at your site.
NOTE: This blog was originally published in April , it was updated in August to reflect the latest information.
Even the most ardent solar evangelists can agree on one limitation solar panels have: they only produce electricity when the sun is shining. But, peak energy use tends to come in the evenings, coinciding with decreased solar generation and causing a supply and demand issue. The thing is, solar panels often pump out more than enough energy during those lower demand hours when the sun is shining to meet peak demand later in the day. This means that efficient solar energy storage can open up a wealth of possibilities for homeowners and businesses alike.
In this blog, we&#;ll look at solar energy storage in-depth, its benefits, and even tools for modeling it on your solar installs.
Click the image to download the free selling solar storage cheat sheet.Storing this surplus energy is essential to getting the most out of any solar panel system, and can result in cost-savings, more efficient energy grids, and decreased fossil fuel emissions. Solar energy storage has a few main benefits:
. If electricity isn&#;t stored, it has to be used at the moment it&#;s generated. Energy storage allows surplus generation to be banked for peak-use. As far as renewable energy is concerned, storing surplus power allows the lights to stay on when the sun goes down or the wind stops blowing. Simply put, energy storage allows an energy reservoir to be charged when generation is high and demand is low, then released when generation diminishes and demand grows.
Short-term solar energy storage allows for consistent energy flow during brief disruptions in generators, such as passing clouds or routine maintenance.
The energy grid is vulnerable to disruptions and outages due to anything from wildfires to severe weather.
Solar power storage creates a protective bubble during disruptive events by decentralizing where we get our energy from.
If you live in a state that has no solar net energy metering, or policies like time-of-use (TOU) rates and variable export rates, battery storage can help lower your utility bills while consuming more of your own power. So, while you may not be compensated as much for excess energy sent to the grid, any additional solar power generated and stored throughout the day can be discharged from a battery at night or on cloudy days in the place of utility consumption.
Solar energy storage can be broken into three general categories: battery, thermal, and mechanical. Let&#;s take a quick look at each.
Batteries are by far the most common way for residential installations to store solar energy. When solar energy is pumped into a battery, a chemical reaction among the battery components stores the solar energy. The reaction is reversed when the battery is discharged, allowing current to exit the battery. Lithium-ion batteries are most commonly used in solar applications, and new battery technology is expanding rapidly, which promises to yield cheaper, more scalable battery storage solutions. In fact, U.S. energy storage is expected to reach nearly 7.5 GW annually by , a sixfold growth from , representing a market worth $7.3 billion.
Thermal energy storage uses various mediums &#; such as water or molten salt &#; to absorb and retain heat from the sun. This heated medium is stored in an insulated tank until the energy is needed, usually to boil water for energy generation.
Mechanical energy storage takes advantage of the potential energy of an object to generate electricity. Mechanical storage methods convert surplus electrical power into mechanical power, which is converted back into electricity for later use. There are three prominent mechanical energy storage systems:
This method uses surplus electricity to spin a flywheel, which later generates electricity to supply quick energy during peak demand times.
With pumped hydro, water is pumped uphill to a reservoir located above turbine generators. The water is allowed to flow through turbines and generate electricity when demand is high.
With this energy storage system, compressed air is pumped into large vessels such as a tank or underground formation. The air is released to generate electricity during peak demand.
There&#;s no silver bullet solution for solar energy storage. Solar energy storage solutions depend on your requirements and available resources. Let&#;s look at some common solar power storage options for commercial and home applications.
Utility companies and other businesses generally have bigger budgets than individual households, making mechanical and thermal storage viable options. Though costs for these storage methods can be high, they help utilities keep up with peak energy demand.
Residential solar has myriad benefits, including resiliency, cost savings, and decentralization of electrical production (otherwise known as &#;virtual power plants&#;). But the commercial energy storage methods we discussed above are likely cost-prohibitive for the average homeowner. Thankfully, battery storage can now offer homeowners a cost-effective and efficient way to store solar energy.
Lithium-ion batteries are the go-to for home solar energy storage. They&#;re relatively cheap (and getting cheaper), low profile, and suited for a range of needs. Other batteries commonly available for residential use include saltwater batteries and lead-acid batteries.
Regardless of the battery type, home backup batteries allow homeowners to save energy during high production, low demand times (i.e. during the workday) for use during high demand periods when generation diminishes. Home solar energy storage inherits the same benefits of large-scale solar energy storage, translating into resiliency, uninterrupted energy, and cost savings. And these benefits go directly to the homeowner.
Technology to help design solar battery storage
Designing a storage system along with a solar installation used to be labor-intensive and include a fair amount of guesswork. Software like Aurora&#;s includes battery storage as part of its offerings.
Using Aurora&#;s battery storage functionality, solar installers can analyze load off-set, calculate the projected price of a project, forecast smart battery sizing recommendations based on customer priorities, and present it to the customer in a compelling, easy-to-understand way.
Aurora has also introduced battery self-consumption modeling. You can learn more here.
So, while the technology used for solar energy storage may seem complicated or overwhelming to some customers, Aurora can help you break down the complexities for customers with interactive and easy-to-understand models of performance and savings.
Click above to learn more about modeling battery storage for self consumption in Aurora.Click here to learn more about Aurora&#;s storage for self-consumption and energy arbitrage modeling capabilities.
The sun offers a limitless supply of clean power, but harnessing it can be a challenge. Thankfully, several options for commercial and residential storage offer proven solutions for storing solar energy, and emerging technologies are being developed daily. For commercial applications, mechanical storage options provide effective solutions to harnessing solar energy when it&#;s needed most, and grid-scale battery storage will likely become available soon. For residential solar, battery storage is the best option, with a variety of affordable units on the market. Together, these solutions provide an effective portfolio for storing solar energy and provide a compelling argument for further solar deployment in commercial and residential settings.
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To see battery self-consumption modeling in action, schedule a quick demo.
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