This executive summary comes from the report Electricity Storage Technologies, impacts, and prospects, authored by Deloitte Center for Energy Solutions
The electricity system in the US may be on the cusp of a period of more rapid change than at any time in the past 25 years or more. The rising role of renewable generation, both grid-scale and distributed; tightening emission limits on fossil-fuel based generation; the acceleration of smart grid deployment; and the emergence of multiple options for electricity consumers to better manage overall consumption and the shape of their load, together point to a very different landscape than in the past.
One important barrier to these developments achieving their full potential has always been the absence of economic and reliable electricity storage solutions. But there appears an acceleration in research and development of various forms of electricity storage which offer the promise of more economic deployment at scale in the near term, bringing load-shifting and electricity reliability within reach of more and more utilities and consumers.
In the past, the main options for electricity storage at grid scale have been pumped hydro storage where water is pumped uphill during off-peak hours when electricity is cheap and then released during peak hours to provide electricity when it is expensive, and compressed air storage, which achieves similar load-shifting objectives by compressing air in caverns, then releasing it to drive turbines.
However, in recent years, both the need and the technological solutions for electricity storage have been growing, driven by the proliferation of intermittent renewable electricity generation—primarily wind power and solar power—both at grid scale and distributed at building or local scale. In particular, the development of battery storage technologies targeted at distributed applications have also been facilitated by the increasing focus on both hybrid and all-electric vehicles in recent years, in which similar battery arrays could be used in stationary applications.
This paper examines the state of maturity of the various new technologies under development, the likely timing and impact of their deployment, and the implications for electricity providers and consumers of all sizes. How and how much will the electricity system be transformed by wider and more economic availability of electricity storage solutions? Which technologies will be best suited for which applications? How long might it take for widespread deployment of electricity storage in the US?
The key findings and conclusions from our examination of this matter are as follows:
- The pace of development and deployment of new electricity storage technologies is accelerating and these solutions could play an important role as the US electric grid incorporates more intermittent renewable sources of generation, and more distributed generation.
- These changes provide opportunities for new players as the technological and business landscape evolves to incorporate more energy storage.
- As an emerging element of electricity delivery systems, electricity storage faces both great opportunity and considerable challenges.
- Participants wishing to enter this market or expand their presence need to carefully consider many factors, related to choice of technology, type of applications they target, the regulatory framework, and the characteristics of the markets they wish to serve. Different business models may be necessary for different contexts and objectives; there is unlikely to be one dominant business model in this sector.
Why electricity storage now?
There are a number of different applications where energy storage solutions can usefully be deployed. Some technologies are uniquely suited to specific applications, while some can be more broadly used across a range of applications. Matching the application to the technology in a way that is both effective and economic will be a key success factor in increasing the market presence of energy storage technologies.
Research into electricity storage has identified five broad families of applications:
1. Electricity supply applications: Generally at grid-scale where storage is used either to add additional capacity at peak periods or to shift electricity generation over time from an off-peak period to an on-peak period, usually within the same day
2. Ancillary services: For the grid operator to maintain quality and reliability of electricity delivery; these services would include such items as provision of reserve or surge capacity, load-balancing across the grid, and over time and voltage support
3. Grid support applications: Support the transmission grid, relieve congestion, allow deferral of expensive transmission system upgrades, or provide on-site power for sub-stations across the system
4. Renewables integration applications: Where intermittent power sources become a more important part of the overall power generation mix, which allows the time-shift of renewables inputs to the grid and the firming of intermittent capacity; without energy storage solutions, wind is primarily an off-peak, night-time contributor, while solar power only delivers electricity when the sun is shining during daylight hours.
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