An appropriately dimensioned and strategically located energy storage system has the potential to effectively address peak energy demand, optimize the addition of renewable and distributed energy sources, assist in managing the power quality and reduce the expenses associated with expanding distribution networks.
It’s generation . . . it’s transmission . . . it’s energy storage! The renewable energy industry continues to view energy storage as the superhero that will save it from its greatest problem—intermittent energy production and the resulting grid reliability issues that such intermittent generation engenders.
Operating Limitations: Energy storage resources may be subject to operational constraints that do not affect traditional generation projects. For example, certain battery technologies will degrade more quickly if the state of charge is not actively managed within a certain range.
Like transmission, energy storage can help to manage supply and demand over broad areas of the electric system because it can provide both generation and load by converting excess electric power into another medium to be stored for later use.
Energy storage also converts energy from one medium to another—whether it be mechanical energy in a pumped hydro facility or chemical energy in a battery—so that energy can be provided when it is needed by the grid.
For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.