Commercial Energy Storage – Pros and Cons
There are several advantages to using Commercial Energy Storage in your building. The pros and cons are discussed here. These include the cost, location, efficiency, and benefits. Whether you’re in need of more power during the day or looking to save money on electricity bills, Commercial Energy Storage is a great option for your building. You can also use it to generate additional revenue through the sale of surplus energy. Read on to find out more. Listed below are a few factors to consider:
Cost
The cost of commercial energy storage systems continues to decline. But there are several factors that may hold back the market’s progress. Regulatory policies may stymie growth by making energy storage more complex and expensive. Furthermore, manufacturing investments may only yield small improvements in efficiency, similar to the solar PV market. Furthermore, tariffs may increase the costs of imported battery and BOS hardware. While these factors are unlikely to prevent the market’s growth, they may slow its progress.
One factor that may drive the cost of commercial energy storage is the federal tax credit. While this credit may not be available for every business, if you can install solar panels along with your battery system, you could potentially receive a tax break worth up to 30%. Additionally, energy storage systems may help your business generate new revenue. With this in mind, the use of storage solutions can help companies cut their energy bills and create a more secure energy supply.
The high capital cost of commercial energy storage systems has slowed the market’s integration. Furthermore, lack of a clear valuation framework for ancillary services discourages investment. To counter this, utilities are increasing their investments in energy storage systems. However, these investments may lead to a reduction in their profits. By understanding the costs of commercial energy storage, businesses can better plan for future investments. The costs of installing and operating commercial energy storage systems vary dramatically depending on their size and complexity.
The average cost of battery storage systems in California is $1,522/kWh. In California, two-thirds of battery capacity is used for frequency regulation, while the rest provides ancillary and energy-oriented services like black start and easing transmission congestion. In short, battery energy storage systems are not cheap to install, but they can be worth it if installed properly. And the industry will continue to grow as the technology improves.
Efficiency
One of the benefits of commercial energy storage is its ability to manage peak demand and grid dynamics. It can also reduce the need for backup power plants. While pumped-hydro storage has traditionally been the most popular type of storage in the world, its geographic and environmental limitations are leading to the increased use of new technologies. In addition to its energy efficiency benefits, energy storage offers a number of other benefits, including greater flexibility and increased security of supply.
Energy storage enables buildings to participate in demand response (DR) markets without affecting their on-site energy use. It helps to respond to price signals from utility companies, allowing a business to make a more profitable contribution to the DR program while preserving occupant comfort and security. Energy storage also offers a reliable backup power supply in times of power outages. Its cost is comparatively lower compared to other energy efficiency and demand response methods, making it a smart investment for businesses of all sizes.
While commercial energy storage offers a host of benefits, the biggest disadvantage is that many facilities do not pay utility rates that allow them to reap the benefits of this technology. However, there are ways to overcome these challenges and maximize the efficiency of your business. For example, you can use your storage to shift load to off-peak times. You’ll save money on utility costs because you will be able to shift peak loads to off-peak hours. Furthermore, energy storage is a valuable insurance against common losses.
A commercial energy storage solution is profitable for a certain segment of commercial customers. Some storage solutions are used in demand-charge management, grid-scale renewable power, small-scale solar plus storage, and frequency regulation. A successful installation should result in a positive net impact on your bottom line. And if you’re in the business of selling energy storage, you can make a nice profit from it. And with the right tools, you can create a lucrative business by serving more customers.
Location
The current location of commercial energy storage projects varies greatly. Some are located behind the meter, while others are at the transmission system level. The DOE International Energy Storage Database is an excellent source of free information about energy storage projects and the policies that govern them. Some of these facilities are owned by electric utilities, others are commercial, and still others are distributed. Energy storage can serve a number of purposes, including providing electricity for residential and commercial customers, providing an option to reduce their reliance on power plants.
While battery deployment has accelerated in recent years, it is still a small drop in a very big ocean. In the United States, only 221 megawatts of commercial energy storage capacity were installed in 2015, compared to the 65 megawatts that were installed in the same period the previous year. With these numbers, it’s easy to see how state policies can open up new markets for commercial energy storage and bring its benefits to more consumers.
In recent years, commercial energy storage has emerged as the fastest-growing storage segment in the U.S., with the bulk of the growth occurring in California. Other markets have emerged in recent months. Demand charge management is a key driver for this market, and this report delves into the economics of demand-charge reduction across 51 utilities, and provides state-level economics through 2021. The report also includes a forecast for the future growth of commercial energy storage.
The development of game-changing energy storage technologies will alter the functionality of the electric supply system. It will impact commercial facilities and energy consumers alike. By making it easier to use solar energy and batteries, on-site solar energy is also becoming more common. However, if the installation of commercial energy storage projects is not feasible, the cost of installing on-site solar systems can make the investment more affordable. This can reduce demand charges and other costs, and may also help improve resiliency.
Benefits
The benefits of commercial energy storage systems are diverse. Most facilities pay demand charges based on peak electricity usage, which can amount to 30% or more of overall energy expenditures. Strategic energy storage systems allow for significant cost savings by discharging energy during off-peak periods to reduce demand charges during peak periods. These savings are then added to revenue streams from reduced energy bills. Moreover, many businesses are now transitioning to electric vehicles and implementing energy storage systems for ultra-fast charging.
In addition to helping save electricity, energy storage also helps in enhancing the overall efficiency of the electric grid. In addition, it can support the integration of renewable energy resources by augmenting the capacity factor of existing resources. By providing a stable source of electricity for peak demand periods, it helps in the evolution of energy supply mix. In fact, by 2030, the demand for energy storage will triple. This means that the benefits of energy storage technologies will multiply.
As a result, combined solar and energy storage systems can help in streamlining energy use and reducing the risk of demand charges. While solar energy is a great source of clean energy, the intermittency of the sun can make its generation unreliable and unpredictable. Because of this, energy storage solutions can help businesses minimize their risk of being hit by rising electricity costs during peak demand periods. With commercial energy storage systems, businesses can reduce risks associated with energy use and enjoy savings.
Another benefit of commercial energy storage is that it can serve as a backup power source for the grid during periods of interruption. These energy storage systems can also be used for the entire grid to provide uninterrupted power to consumers. This flexibility is crucial for grid resilience and reliability. Moreover, businesses can participate in demand response programs when they are available. With the power supply fluctuating, it becomes difficult for businesses to cope with the increased load. It is better to avoid power cuts during peak hours.
Compressed air energy storage
One of the biggest challenges facing utilities is integrating renewable energy sources into their power supply. A recent study by PNNL and BPA looked at the potential of using natural porous rock reservoirs to store compressed air energy. In the Northwest, nearly 8600 megawatts of power comes from wind energy. By 2050, these utilities plan to achieve carbon neutrality by 2050, and they are looking to new methods for storing renewable energy to meet their goals.
In the US, there are two main types of energy storage: liquid air and plant-scale. Liquid air is more scalable, allowing for easy deployment between industrial and commercial projects. Commercial compressed air energy storage facilities can produce up to ten megawatts of energy. This type of energy storage is also flexible, enabling them to change from generating power to storing energy in a matter of seconds. The ability to convert from one source to another is another key benefit.
One CAES project is currently in development, the ADELE project in Stassfurt, Sachsen-Anhalt, Germany. The project is a joint venture between RWE, General Electric, Zueblin, and the German Aerospace Center. State funding is being provided by the German Federal Ministry of Economics, while the participating companies will contribute at least EUR 10 million. CAES technology is highly efficient and can be used to store energy without the need for electricity.
Commercial compressed air energy storage plants use the same basic principle. When power demand is high, a large air compressor pumps pressurized air into a geological storage structure. When power demand is low, the compressed air is released. The air rushes through turbines and re-generates electricity. Depending on the type of compressed air energy storage, these plants are capable of generating 80 percent of their original electricity.
