Ben Lavoie, of Ameresco, describes what drives the battery energy storage market, why it’s valuable to pair storage and distributed energy, and how close battery storage is to becoming the norm.
Microgrid Knowledge (MGK): Give us the background: From your view as an energy services provider, how are organizations maximizing the benefits of battery storage?
Ben Lavoie (BL): Ameresco has long been installing energy storage solutions for our customers as a part of our advanced technology portfolio. These systems provide a variety of benefits including utility billing cost savings, energy security, power quality improvements, expanded deployment of renewables and new revenue generation. The federal government, in particular, is benefiting from the ability of energy storage to strengthen a site’s resiliency to utility outages — ensuring they can continue mission critical operations, while producing valuable electricity cost savings during normal conditions.
MGK: What developments are you seeing among battery energy storage technologies?
BL: There are so many exciting new technologies being developed in the energy storage realm, touching every aspect of the system. The pace of these developments has accelerated as global manufacturing of batteries expands, supporting multiple industries including transportation, electric power systems and commercial products. Significant advancements in battery chemistry are emerging that maximize life, improve safety and reduce cost. We are also seeing developments related to thermal management, intelligent controls and system energy density. As more experience is gained, industry is establishing a deeper understanding of how energy storage can be deployed for multiple stacked use cases and paired with other types of energy assets like solar PV to maximize their effectiveness.
One particular area of development is related to safety codes and standards. Significant developments have been made to revise UL, IFC and NFPA codes (among others) to ensure safe system operation. This is an important aspect to the success of the dynamic and rapidly growing storage technology space. These new codes and standards specific to energy storage are leading to better and safer equipment design, and improved guidelines related to the installation and operation of energy storage equipment.
MGK: How important is battery energy storage in making renewable resources, such as solar, more sufficient?
BL: Solar has become a very viable, self-sufficient generation resource on its own in virtually all parts of the country due to its rapid cost declines and scale of deployments over the last decade. However, the addition of energy storage makes it even more effective by mitigating some of the flaws of solar, such as shifting the time of use, firming fluctuating PV production due to cloud cover, or managing power quality such as flicker and reactive power control. One example is the so-called “duck curve” phenomenon in California, where widespread solar by itself created periods of very steep ramping in the state’s load profile — a challenge for utilities and grid operators to manage. However, the incorporation of storage allows for flattening of the load profile to mitigate this issue and enabled continued progress toward greater levels of renewable generation deployments.
“Energy storage provides the unique benefit of giving organizations the ability to control energy — taking advantage of storage technology to minimize their costs, balance their supply and demand more efficiently, and protect against power outages.” — Ben Lavoie, Ameresco
MGK: How can organizations capitalize on pairing storage with other distributed energy generation, such as solar plus storage? What sets them up for success?
BL: Pairing storage with distributed energy generation can increase the value of that generation asset. This could help with realizing retail demand savings, increasing the value of renewable energy or obtaining capacity market value, for example. In certain states, such as Massachusetts, the addition of storage provides additional incentive or value creation opportunity that could not be obtained by a stand-alone solar generation system.
MGK: What are the major benefits of energy storage and how can it be a solution for organizations as they realize the importance of smart, resilient working environments?
BL: Energy storage provides the unique benefit of giving organizations the ability to control energy — taking advantage of storage technology to minimize their costs, balance their supply and demand more efficiently, and protect against power outages. Although storing a commodity is common in many other industries, the cost-effective ability to store energy is quite revolutionary in the world of power — giving end users new opportunities to manage their consumption. Energy storage provides exciting new opportunities to accelerate the transition to a decarbonized energy future.
MGK: What are the current market drivers or trends you are seeing around energy storage?
BL: There are many quickly changing aspects to the energy storage industry. A primary market driver has been significant reductions in technology cost. The cost of lithium ion batteries, for example, has dropped nearly tenfold during the last decade. This has enabled wider opportunities for utility, commercial and industrial, and residential customers to benefit from cost-effective energy storage.
Right now, there is also interest from policymakers to enable greater use of energy storage and the benefits it provides. As such, utilities are offering incentives for energy storage, and programs that incent solar now include storage with it. Many states and regions are also implementing new regulatory frameworks, state mandates or incentive programs that recognize storage for the value the technology creates. Examples of this include the FERC 841 ruling, the MA SMART program and California’s SGIP program.
MGK: How close are we to cost-effective battery storage options being the “norm”?
BL: This depends on a number of factors, but I’d say we’re there now — and it will only get better. Utilities are now procuring very large battery storage systems on a widespread basis because they are, in many cases, proving to be better investments than upgrading wires or replacing a conventional peaking plant. Further, pairing low-cost renewable generation like solar plus storage allows maximum benefit to an already cost-effective approach to power generation. This will only continue to become more evident as the costs of storage and PV continue to decline in coming years.
Ben Lavoie is the lead energy storage engineer – federal solutions at Ameresco.