Battery Storage Potential To Change The Energy Sector Forever
One of the main issues that always arises when discussing renewable energy sources are their unreliability to provide a steady constant flow of electricity. For example, solar energy plants do not produce electricity at night and dependant on the weather may not produce as much in the day and wind turbines will only produce electricity when it is windy. Therefore, at this moment in time, fossil fuel power plants are needed to constantly provide electricity to keep the grid running. This means that unless there can be a way to store the energy, which is produced from the renewable sources, we will always be relying on fossil fuels to be the backbone of the national grid.
However, if there is a break=through in battery storage technology the energy industry will be changed forever. In recent years energy storage has become an economical asset within the electricity grid. If and when regulators and utilities find a way to generate revenue from energy storage it will cause finance companies to spend their money and invest in the technology. This would then lead to a rapidly changing energy sector.
Energy storage can be used to offset expensive peak generation on days when there is high demand for electricity. For example, in Southern California households face peak rates of $0.38 per kWh however during off peak times they only face costs of $0.13 per kWh. The $0.25 difference could be cost savings for a household if they have a battery, as they can use the stored energy when prices are more expensive and then charge the battery when prices are lower. Total savings would be dependent on the size of the battery installed; however, households could expect to see themselves save a few dollars per day.
Battery storage could also be a step-in reducing transmission and distribution costs and also lead to less new power plants being built. The technology would mean that there are less losses in transmission and would make the whole network more efficient.
The main issue with battery storage technology are the high costs for the batteries. It can be hard for punters to justify to investors that they are worth the expensive up-front costs. However, within the last 10 years, prices of battery storage have fallen by almost 90% and look like they will continue to do so as the technology improves making batteries more efficient.
The trend of the reducing costs of battery storage means that the technology will only become more competitive with the traditional fossil fuel methods of producing electricity. Demand is only going to grow for battery installations in households and on a larger scale making it a profitable investment.
Falling costs and increasing revenue will not make any difference unless big companies start financing projects and investing into the technology and slowly but steadily more companies are becoming willing to invest into it.
One example of this is NextEra who are hoping to see between 700 megawatts and 1400 megawatts of energy storage in its pipeline between now and 2022. Brookfield Renewable Partners have also started investing in battery storage, albeit a very small b ase project of only 10 megawatts at the moment. Another financer, Hannon Armstrong have also started investing in energy storage projects. This is all promising news for a technology which has the potential to completely change the face of the whole entire electricity industry.
Only time will tell how much of an impact battery storage will have on the sector.