There’s no denying that energy storage is gaining momentum in the public consciousness. It continues to weave in and out of all types of discussion–whether it be political, environmental, technological or economical. And as mass blackouts and power outages pop up more and more, it has become clear that the traditional electric grid is in desperate need of strengthening and diversity.
We wrote recently about a series of outages in California that impacted hundreds of thousands of customers–a situation that could’ve been entirely avoided with the adoption of energy storage.
As arguments about how to modernize the grid unfold, energy storage has become the front-runner as a potentially viable solution to that problem. And not only creating grid resiliency but also offering opportunities for job creation, cost savings, safety and reliability. Furthermore, energy storage boasts environmental benefits by alleviating dependence on fossil fuels in favor of renewables such as wind and solar.
With all of the above said, the next logical question is: “Sure, that sounds great, but what is the true value of the supposed resilience that energy storage will provide?”
First, let’s define exactly what a resilient power system is. For a power system to be resilient, it needs to be able to island and operate independently from the grid during power outages or blackouts. Basically, these systems should be capable of operating as self-sufficient microgrids. Common examples of where these systems can benefit customers most is during severe weather such as hurricanes where medical services, gas and groceries are in exceptional demand.
While this all sounds good, it can be much tougher to put a dollar figure on the value of investing in grid resilience via energy storage. According to U.S. Department of Energy National Renewable Energy Laboratory (NREL), the expected cost of the loss of business or the liability incurred because of the lack of power is used as a proxy for the value of resilience.
NREL recently conducted a study in an attempt to place a value on grid resilience investments by incorporating the avoided cost of a grid outage into the financial planning of choosing cost-optimal system sizing for buildings in Anaheim, CA. For each of the building types analyzed, two paths were investigated–one that puts zero value into resilience and one that puts value into resilience in terms of dollars lost per hour of outage.
The study included the benefits of utility bill savings driven by the PV and energy storage systems during normal grid operation in addition to the benefits of running during grid outages.
When using a primary school as an example, NREL determined that the installation of a PV and battery storage system is the optimal choice with reduced bills from lowered demand charges and energy expenses strongly off-setting the lifetime cost of the system.
And that’s before factoring in the cost of savings from grid outages and the system’s ability to deliver lowered electric bills–which more than doubled the net benefit of choosing to install a PV and energy storage system.
NREL also found similar net benefits when considering solar plus energy storage for both a large office and a large hotel. Interestingly, when valuing resilience, the PV and energy storage system became the most economical option for the hotel over time “whereas neither PV nor storage would be economically viable otherwise.”
NREL also analyzed the cost to island a PV system. Naturally, they reiterated how highly variable those costs can be due to a plethora of site-specific variables. As stated in the report, “For a resilient power system to result in a
net economic benefit for a customer, the cost to island must be no more than the added savings delivered by the system.”
The study analyzed 21 scenarios and found that the max cost to island stretched from 3% to 21% of the non-islandable system cost. However, it’s important to note that these figures did not account for any added costs from giving a grid-connected system the ability to island.
Ultimately, the crux of this study highlights the fact that a bigger net needs to be cast when determining the cost-benefit of a PV and storage system as opposed to more traditional methods. By attributing a value to grid downtime, you get a much clearer picture of an energy storage system’s true impact and the savings it could generate in the long run.
At Dynapower, we’re exceedingly proud to be at the forefront of the energy storage revolution. Our products are backed by industry leading certifications and are subject to extensive testing at our 150,000 square manufacturing facility in the Green Mountains of Vermont.
We’ve deployed more than 500MWs of energy storage solutions worldwide–including critical backup power for commercial and industrial facilities, reduced electricity bills, fully independent microgrids and fluid integration of solar and wind energy into the electric grid.
When it comes to grid resiliency and overcoming outages, Dynapower has developed and implemented its Dynamic Transfer™ technology to seamlessly transition from grid-tied (current source) operation to microgrid (voltage source) operation. The transition is seamless to the critical loads and supports 100% phase imbalance in UF mode.
Check out our MPS®-i125 EHV Behind-the-Meter Energy Storage System for a good example of one of our premier products that implements Dynamic Transfer. These systems can be paralleled together to meet the sizing needs of any behind the meter installation and operates in both grid-tied and microgrid applications.
Ultimately, one thing is certain. The outages and rising grid issues highlighted above aren’t going anywhere until a viable, effective solution is implemented. At Dynapower, we are proud to be part of that solution. And that solution is energy storage.