Guest Author:  Anissa Dehamna, Principal Research Analyst, Navigant Research

Energy storage is a transformational technology. It converts electricity from a perishable good into a flexible resource. It changes the grid from a unidirectional power system to a dynamic network, and it is transforming how we produce, procure, and deliver energy. Storage does this by creating give in a system that has little inherent flexibility. In a white paper prepared for the Energy Storage Association (ESA) on a vision for energy storage in the United States, Navigant Research modeled the value of 35 GW of energy storage by 2025 against the cost of storage in the same period. We measured this value in terms of job creation, emissions reduction, grid operational cost savings, and reliability.

Broadly speaking, storage provides flexibility in one of two ways: operating the grid and building out grid infrastructure. Storage gives grid operators and vertically integrated utilities more efficient, faster responding resources to call upon when balancing generation with load—including intermittent generation such as wind or solar PV. This in turn makes the overall grid more efficient, resulting in less expensive operations and savings that can be passed on to the ratepayer.

In addition, flexibility within the grid system allows the grid to more easily interconnect technologies such as solar PV, wind, EVs, and EV charging. It enables quicker interconnection, in greater volume, with less investment overall (compared to traditional transmission and distribution). Flexibility allows the grid to accommodate changes in load incrementally—generation, transmission, and distribution capacity can be built as needed and more quickly than conventional infrastructure. Finally, storage is a physically flexible resource. Assets can be moved, functions of assets can be changed with software modifications, and hardware designed with modular architecture can be resized to accommodate growth. Systems can be programmed to provide multiple services, including islanding during weather events or to avoid outages due to imbalances in the grid. Energy storage supports flexibility in the grid, transforming it from a system that struggles with change and into a network that can adapt to disruption.

Aside from transforming the grid as it currently exists, storage is also facilitating a broader energy transformation. Specifically, the electric grid is moving toward a highly networked ecosystem of two-way power flows together with digitally enabled intelligent grid architecture. This transition includes distributed generation, intelligent sensors and devices, and a sophisticated IT backbone to manage not only the physical assets themselves but also transactions between assets—a foundation for transactive energy.

Part of this shift is the Energy Cloud, a dynamic energy ecosystem that leverages ubiquitous connectivity, intelligent sensors and devices, information and operations technology, and data-driven machine-learning functionality across the grid value chain. This network will be far more sophisticated than the legacy hub-and-spoke model in use today.

The Energy Cloud

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Energy storage is the foundation of the energy transformation. It complements technologies within the Energy Cloud, making them more efficient and valuable or more efficient and less costly. Storage does this by reducing the temporal aspect of load and generation. Resources that would be more valuable at another time of day can be shifted to peak periods of demand. Likewise, unexpected load events that would require an expensive peaker plant can be balanced quickly and efficiently. (Source: Navigant)

Already, distributed storage assets aggregated into fleets are providing services to local users as well as bidding into competitive markets. In other cases, utilities are procuring distributed storage assets, with or without solar PV, to deliver grid services. In still other cases, utilities are using energy storage for peaking capacity where natural gas turbines would normally fit into the grid system. These assets are designed for peaking capacity but can also deliver other grid services in between peaking events, such as balancing intermittency. Development time for assets is also falling sharply—storage plants are also being procured, built, and commissioned at the megawatt scale in less than 6 months.

In addition, distributed generation is here to stay—customers have made their choice and utilities have begun to model and plan for distributed energy resources. Navigant Research estimates that 71.8 GW of distributed solar will be installed in the United States between 2017 and 2025. While smart inverters can give utilities more control over distributed assets, storage provides the ultimate flexibility for integrating distributed generation, no matter where that storage asset is situated in a grid system. Storage is a prerequisite for the transition away from a centralized model and toward a more resilient, decentralized cloud model.

Aggressive energy storage growth will be the linchpin of the energy transformation. Join us for an ESA-sponsored Navigant Research webinar on May 30 at 2 p.m. ET where we will present a vision for energy storage in the United States over the next 10 years. Specifically, we will discuss how storage will support job growth, reduce grid operational costs and emissions, and improve grid reliability.