Energy Storage Quickly Becoming a Capital-Deferment Tool

March 23, 2016
S&C Electric’s Mike Edmonds explains how energy storage offers an opportunity for utilities to defer capital expenses.

Mike Edmonds, President US Business, S&C Electric Company

S&C Electric’s Mike Edmonds explains how energy storage offers an opportunity for utilities to defer capital expenses.

Utilities are deploying a variety of new technologies to improve their bottom lines. Distribution automation, for example, is helping reduce costs through greater efficiency, reduced truck rolls, and other benefits. Utilities need to view energy storage in a similar light.

As the price of energy storage continues to decline, it’s going to provide more and more utilities with an ability to defer capital expenses, especially those associated with the cost of having to build out feeders, specifically around peaks. The build out of most utility grids is driven by peaks, where during an average of 15 to 20 hours a year, a conductor will overheat because it has to accommodate an increased amount of current to satisfy a particular load. When that happens, utilities typically over-duty existing resources or activate otherwise idle generation to produce more energy, creating significant costs for them and their customers.

If a utility were to deploy an energy storage strategy instead and provide the extra power needed at the end a problematic feeder, it wouldn’t have to transmit extra power down the line because it’s already down there. You eliminate the peak on the line and more importantly you eliminate the expenses needed to upgrade it. It’s through such a strategy that energy storage becomes a real capital-deferment tool for utilities.

Indeed, the fascinating thing about energy storage is that it’s such a multifunctional technology. For a distribution engineer, energy storage represents a tool he can use on the network to eliminate the need to use higher-cost alternatives to protect against peaks. He can put a point-driven isolated energy storage unit at the problematic site to solve the problem. That is only one of a variety of use cases for this powerful technology.

I’d be interested in hearing your thoughts on how energy storage is playing a role in your capital-deferment strategies. Please feel free to comment below, or you could come up and talk to me after I discuss this subject at the ETS16 conference, March 29-31 at the Paramount Theatre in Austin, Texas.

Mike Edmonds is the president of the U.S. Business Unit for S&C Electric. This blog originally appeared on S&C’s corporate blog, GridTalk.

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