Difference between revisions of "Energy Storage 101/Drivers and Big Picture"

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=Decreases in Technology Costs=
=Decreases in Technology Costs=
Massive research and development investment and manufacturing scale-up has driven costs down for lithium ion battery storage. This was initially driven by the consumer electronics market (e.g. cell phones and laptops) and more recently accelerated by the electric vehicle market. There has been an almost 90% reduction in $/kWh cost in the last decade and lithium ion costs are expected to continue to decrease with additional manufacturing improvements and economies of scale.  
Massive research and development investment and manufacturing scale-up has driven costs down for lithium ion battery storage. This was initially driven by the consumer electronics market (e.g. cell phones and laptops) and more recently accelerated by the electric vehicle market. There has been an almost 90% reduction in $/kWh cost in the last decade and lithium ion costs are expected to continue to decrease with additional manufacturing improvements and economies of scale. Bloomberg New Energy Finance projects 2030 lithium ion pack costs at $62/kWh based on observed prices and an 18% learning rate. Source: [https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/ BNEF]
 
<br> Solar and wind technology cost reductions are driving deployment of energy storage for hybrid applications.
Bloomberg New Energy Finance projects 2030 lithium ion pack costs at $62/kWh based on observed prices and an 18% learning rate. Source: [https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/ BNEF]
 
=Increasing Renewable Generation=
=Increasing Renewable Generation=
Solar PV is driving over generation in midday and increased evening ramp drives value for flexibility and energy storage. Wind energy is similarly driving flexibility needs.
Solar photovoltaic (PV) is driving over generation in midday and increased evening ramp drives value for flexibility and energy storage. As more solar comes online, the effective net load in the middle of the day decreases. Wind energy is similarly driving flexibility needs.
=Evolving Utility Needs=
=Evolving Utility Needs=
*The grid is sized for infrequent peak needs and using energy storage for peak load reduction provides significant cost reduction opportunity to electricity customers.  
*The grid infrastructure (generation, transmission, and distribution) is sized for infrequent peak needs and therefore most assets are under-utilized most of the time. Energy storage can support peak load reduction to provide significant cost reduction opportunity to electricity customers.  
*Utility asset infrastructure is aging and peak load reduction may extend asset life and offer opportunity to consider investment in new technologies.
*Utility asset infrastructure is aging and peak load reduction may extend asset life and offer opportunity to consider investment in new technologies.
*Storage is being considered in generation planning. Battery storage costs may cross-over combustion turbines in the next decade. Accounting for operational benefits, breakeven may be sooner.  
*Storage is being considered in generation planning. Battery storage costs may cross-over combustion turbines in the next decade. Accounting for operational benefits, breakeven may be sooner.  


=Increasing Utility Customer Choice and Engagement=
=Increasing Utility Customer Choice and Engagement=
Customers (residential, commercial, industrial) are considering energy storage for
Customers (residential, commercial, industrial) are considering energy storage for:
*Bill savings
*Bill savings
*Increased energy independence
*Increased energy independence
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<br>'''Incentives:''' Legislators create economic incentives (e.g. rebates or subsidies) for deploying storage; No mandatory procurement   
<br>'''Incentives:''' Legislators create economic incentives (e.g. rebates or subsidies) for deploying storage; No mandatory procurement   
<br>'''Resource Plans:''' State agencies or regulators fund studies or direct utilities to create an energy plan with consideration of storage; No targets or incentives
<br>'''Resource Plans:''' State agencies or regulators fund studies or direct utilities to create an energy plan with consideration of storage; No targets or incentives
=Resources=

Revision as of 13:14, 3 November 2020


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Decreases in Technology Costs

Massive research and development investment and manufacturing scale-up has driven costs down for lithium ion battery storage. This was initially driven by the consumer electronics market (e.g. cell phones and laptops) and more recently accelerated by the electric vehicle market. There has been an almost 90% reduction in $/kWh cost in the last decade and lithium ion costs are expected to continue to decrease with additional manufacturing improvements and economies of scale. Bloomberg New Energy Finance projects 2030 lithium ion pack costs at $62/kWh based on observed prices and an 18% learning rate. Source: BNEF
Solar and wind technology cost reductions are driving deployment of energy storage for hybrid applications.

Increasing Renewable Generation

Solar photovoltaic (PV) is driving over generation in midday and increased evening ramp drives value for flexibility and energy storage. As more solar comes online, the effective net load in the middle of the day decreases. Wind energy is similarly driving flexibility needs.

Evolving Utility Needs

  • The grid infrastructure (generation, transmission, and distribution) is sized for infrequent peak needs and therefore most assets are under-utilized most of the time. Energy storage can support peak load reduction to provide significant cost reduction opportunity to electricity customers.
  • Utility asset infrastructure is aging and peak load reduction may extend asset life and offer opportunity to consider investment in new technologies.
  • Storage is being considered in generation planning. Battery storage costs may cross-over combustion turbines in the next decade. Accounting for operational benefits, breakeven may be sooner.

Increasing Utility Customer Choice and Engagement

Customers (residential, commercial, industrial) are considering energy storage for:

  • Bill savings
  • Increased energy independence
  • Renewable energy goals
  • Backup premise or critical loads

Policy and Regulatory Changes

Federal Policy
FERC Order 755 Frequency Regulation Compensation in Organized Markets

  • Pay for Performance compensation based on speed and accuracy


FERC Order 841 Electric Storage Participation in Markets Operated by RTOs and ISOs

  • Storage can participate in energy, ancillary services, and capacity markets when technically able
  • Clarifies technical provisions for energy storage


FERC Order 845-A Reform of Generator Interconnection Procedures and Agreements

  • Revises large generator interconnection requirements
  • Allows interconnection below combined nameplate for hybrid systems


FERC Order 2222 Participation of Distributed Energy Resource Aggregations in Markets Operated by RTOs and ISOs

  • Enables Aggregated DER (or Virtual Power Plant) participation in ISO/RTO markets


U.S. State Policy
States are taking varying approaches for energy storage deployment
Es101driver10.png
Procurement Targets: Regulators or legislators set procurement goals and mandates requiring utilities to directly procure or contract storage.
Incentives: Legislators create economic incentives (e.g. rebates or subsidies) for deploying storage; No mandatory procurement 
Resource Plans: State agencies or regulators fund studies or direct utilities to create an energy plan with consideration of storage; No targets or incentives

Resources