Battery Storage for Microgrids Growing Globally, But Needs Utility Support

June 8, 2020
Energy storage systems are on the rise as a component of new microgrids or portable energy supplies that have traditionally used fossil fuel-based resources, according to Guidehouse Insights.

Energy storage systems are on the rise as a component of new microgrids or portable energy supplies that have traditionally used fossil fuel-based resources. But utilities need to undertake more widespread usage of storage on permanent microgrids, according to Guidehouse Insights.

Peter Asmus, who developed the “Energy Storage for Microgrids and Remote Power Systems” report with primary author Ricardo Rodriquez, said that utilities need to play a bigger role in developing permanent microgrids. Utilities have played a lead role in remote microgrid projects in places like Alaska, but are not in the lead on permanent microgrids in California or anywhere. 

Utilities seem to be “waiting to see how it’s all going to play out,” he said in an interview with Microgrid Knowledge.

He also noted that California utilities rejected some proposals for storage on permanent microgrids because they didn’t think the microgrids could be up and running by this year’s fire season. 

Such efforts as Pacific Gas & Electric’s December 2019 solicitation for 20 microgrids, totalling more than 500 MW, was disappointing to storage developers because it mostly used fossil-fuel sources and placed the microgrids at substations rather than customer sites. The utility in March said it had temporarily suspended, but not canceled the project.

Adding storage to microgrid projects, however, offers various benefits to the system, including enhancing the ability of the microgrid to manage renewable energy. The battery can store energy for discharge in the evening when the solar panels are no longer generating electricity, for example.

Microgrid projects don’t always incorporate renewables, but “most people when they think about microgrids today are thinking about batteries and solar,” Asmus said. 

Future development might see differing types of batteries instead of one type of battery on a single microgrid, paired with various generation types, according to Asmus, who said the commercial and industrial sector is the fastest-growing segment in microgrid development, partially driven by the declining cost of batteries .

Rodriquez said that emerging “energy as a service” business models include using batteries to store power to save costs through time-of-use rates, and other load management activities.

“The most successful companies in this industry will be those that unlock the potential of these new business and financing models to reduce the risk and upfront costs to customers,” the report says.

In compiling the research, analysts Rodriquez and Asmus studied specific trends and market dynamics for each major region in the world. 

The report studied regional market trends and market forecasts in North America; Europe; Asia Pacific; Latin American and Middle East and Africa. It also looked at energy storage for microgrids in world markets in 2020-2029; microgrid capacity added by generator type in world markets 2010-2019; installed microgrid power capacity; and ESMG power capacity by region in world markets 2020, as well as other data.

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About the Author

Jason Fordney

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