This article comes from White & Case LLP and is authored by Jane Rueger and Dan Hagan.
Until now, there have been only a few, comparatively costly ways to temporarily store large quantities of electric energy—keeping it available for later use, when needed. Technological advances (in battery technology, in particular) are poised to make energy storage efficient and commercially viable in markets across the US. And these technologies are emerging just as environmental pressures are encouraging a focus on renewable energy—typically based on unpredictable sources such as sun or wind—which can only be reliable at every hour of every day if they are paired with effective energy storage.
Now is the time for industry participants, regulators and other stakeholders to brainstorm creatively about what the future of energy storage markets should look like.
As a result of these and other factors, energy storage is one of the few areas predicted to have massive growth potential in the current global energy markets. Yet the path ahead is not straightforward.
While the technologies are evolving rapidly, many market practices and regulatory standards have not begun adapting for the changes in structures and conventions that energy storage will require. Everyone with an interest in energy storage and renewable energy needs to start thinking now about the best ways to update our market and regulatory approaches.
If we address these issues thoughtfully in advance, we can be prepared to unlock the full potential of energy storage commensurate with technological advances bringing down costs and making storage widely commercially viable.
Energy storage provides massive growth opportunities
At least one source projects that the world’s energy storage capacity will double within only a year—from 1.4 gigawatt-hours added in 2015 to 2.9 gigawatt-hours added in 2016—and will reach 21 gigawatt-hours by 2025. The US is leading this charge, with 18.3 megawatts of energy storage deployed in only the first quarter of 2016.1
Although some energy storage technologies, like pumped hydroelectric energy storage, have existed for decades, the last five years have brought an explosion of interest in other new technologies, such as battery storage.
A June 2016 US White House report extolled the benefits of energy storage and noted the great strides taken to incentivize deployment of energy storage in the US.2 Still, as the report acknowledged, considerable obstacles must be surmounted before we can realize the full potential of energy storage.
Some of these obstacles are technical, since many storage technologies remain in a developmental state. Other obstacles are commercial, including building energy storage of sufficient scale and finding financing for nascent energy storage technologies.
But a third, major category of significant obstacles includes regulatory barriers and market structures that have been slow to accommodate the vibrant new potential of energy storage.
The promise of these new technologies and approaches can only be met if markets are structured in a way to allow these new technologies and approaches to provide grid management services.
Read the rest here: https://goo.gl/dJt9Nr
Filed Under: Energy storage