Of the technology trends contributing to the current state of the commercial, industrial and institutional (C&I) energy market, energy storage is one that has especially interesting implications for corporate energy strategies.
Batteries and other types of energy storage play a key role in enabling companies to embrace clean, low-cost energy at a higher level. By mitigating the intermittency issues that renewable power sources like wind and solar face, storage helps remove a significant barrier that has prevented more widespread adoption of renewable resources.
Paired with storage, technologies such as onsite solar and wind have an entirely new value proposition. Cost efficiency and increased reliance on renewable sources are among the most compelling benefits that companies testing this partnership between renewables and storage enjoy.
What is energy storage?
Energy storage is the capture of energy produced at one time for use at a later time. Energy storage solutions are technologies that discharge potential energies — stored through chemical, mechanical or thermal systems — to provide power to a company’s facilities. Energy storage as a technology can be broadly categorized in four ways: conventional and advanced batteries, mechanical storage, thermal storage, and software for discharge operation.
Why energy storage and how can companies benefit?
Advances in technology, battery duration, and increased distribution of renewable generation sources have renewed the interests of C&I buyers in energy storage. These trends, alongside rapidly declining prices for energy storage and constraints on the development of new power transmission infrastructure, make energy storage an exciting prospect.
Energy Security & Power Reliability
Storage is viewed as a failsafe power source. It is one of few technologies that can replace or supplement baseload generation, and it is able to act as a backup power supply during catastrophic system failures either at the facility level or on the grid. For many companies, this resilience is absolutely crucial, especially as the effects of climate change — including flooding, extreme weather events and rising global temperatures — pose an increasing threat to energy security.
Many companies in the information and communications technology (ICT) sector, for example, depend on the functionality of critical facilities such as data centers and colocation centers. This infrastructure, which backs the use of digital devices, networks and the internet, relies on grid security to deliver vital services.
As a result, ICT companies are particularly exposed to grid disruption. Energy storage that is rapidly dispatchable (discharges within milliseconds) can help to avoid outages. Having a fail-safe power backup in the case of an energy emergency can be a make-or-break for these companies, which are among the largest employers and economic powers in the world.
Equipment Maintenance Deferral
Companies testing the value of energy storage may also consider maintenance deferral. Using storage solutions promotes increased use of existing equipment, thereby deferring or eliminating costly upgrades. For energy managers with tight budgets and aggressive goals to hit, the ability to stretch the life of existing assets and use investments toward other efficiency and sustainability activities is significant.
Peak Load Management
Software-enabled solutions in the behind-the-meter energy storage market, which includes any systems installed on the customer’s side of the utility meter, open up the potential for demand charge reductions and peak load management. Proprietary software from companies including SolarCity, STEM, Tesla and others add intelligence to battery solutions to manage demand spikes in a facility’s load.
The reduction of a facility’s peak demand helps consumers to either avoid setting a new consumption maximum for the facility — and potentially a higher per kilowatt or capacity cost — or to lower their demand during coincident peak measurements.
The future of energy storage
Navigant reports that in 2014 and 2015, 520 megawatss (MW) of new energy storage capacity was deployed globally. More than 80 percent of these storage deployments were made in the utility sector, while some 9,000 MW of new utility-owned storage capacity is to be deployed by 2020. This means that non-hydropower storage will equal approximately 2,276 MW by the end of 2017. Overall, the global market is expected to grow 47 percent this year over 2016’s record-breaking performance.
The true potential for energy storage is in the untapped C&I market. More than ever before, companies are actively seeking ways to gain control over their energy spend by utilizing cleantech and other innovative solutions. As the price for batteries and other storage solutions drops, corporate buyers will be well poised to maximize energy investments while contributing to the clean energy transition. Additionally, with microgrid opportunities on the rise, energy storage in conjunction with other new energy opportunities are likely to be commonplace in the not-so-distant future.
Interested in learning how other companies are taking advantage of cutting-edge clean technologies? Download our whitepaper, New Energy Opportunities: Innovations That Shape How Companies Manage Energy, which overviews three more cleantech opportunities on the horizon, with case studies from companies that are already reaping the benefits.