Lithium-ion (Li-ion) batteries are the most highly developed option in size, performance, and cost. A broad ecosystem of manufacturers, system integrators, and complete system providers supports Li-ion technology. However, the vendors best equipped to bring value to microgrids bring the right components to each project.
Or as S&C Electric’s David Chiesa puts it: “If you’ve seen one microgrid …you’ve seen one microgrid.” So there is no quick and simple price to give a prospective customer. Sources we’ve interviewed cite project proposals as low as $250,000 to as high as $100 million. Generation typically accounts for most of the cost.
Another use case for battery storage on microgrids is aggregating BESS as a virtual power plant (VPP) to correct imbalances in the utility grid. At the grid level, when the supply of power from renewables temporarily drops, utilities need to respond quickly to maintain equilibrium between supply and demand and stabilize the grid frequency.
To reduce energy costs, a facility with a microgrid can leverage a BESS to store power from variable renewable energy (VRE) sources, such as solar or wind, and then substitute the stored energy for utility power when utility rates are highest in an attempt to arbitrage.
The Inflation Reduction Act incentivizes large-scale battery storage projects. And California regulations now require energy storage for newly constructed commercial buildings. The same microgrid-based BESS can serve either or both of these use cases.
Volatile energy markets, utility grid disruptions, and the rising awareness of climate change have created new energy challenges that require innovative answers. As a result, many organizations are embracing microgrids as a solution to the mounting problems.