Battery energy storage in North America and globally has quickly emerged as a critical solution to support renewable energy development and electrification. It addresses the need for utilities transmission network operators and electricity end users load management, grid flexibility, frequency control, and backup power. The market forecasts growth expectations for battery energy storage deployments promising to increase 30%-40% year over year through 2025. The global transition to a lower-carbon energy system is spurring the rapid development of renewable energy generation and electrification of the transport sector.
The global transition to Green House Gas Emission reduction is spurring the rapid development of renewable energy generation and electrification of the transport sector. This shift translates into progress in installed solar capacity, offshore wind project pipeline expected to substantial capacity increase by 2030, a more stable onshore wind installation landscape, and the commitment by leading auto manufacturers to a future of 100% electric vehicle fleets. While these developments are certainly supportive of long-term climate goals, they are also creating considerable challenges for utilities and transmission operators amid their efforts to maintain a reliable, flexible and resilient power grid.
There are several energy storage technologies such as pumped hydro, thermal, compressed air, hydrogen and emerging new technologies; however, battery energy storage is emerging as the front-runner and will account for 85% of new MWs added this year.
Beyond supporting grid resiliency, battery energy storage’s appeal is also in its extensive set of use cases that unlock value through cost avoidance, loss mitigation and new income streams. For utility-scale applications, battery storage reduces and delays capital-intensive investments in transmission infrastructure, offers a source of backup generation, and captures additional revenue in markets willing to pay for resource adequacy and ancillary grid services.
BESS produces significant benefits for customers and their homes and businesses, including:
- Storing energy from the grid or a rooftop solar system
- Providing energy during peaking events when energy prices are high
- Helping customers more quickly recover the costs of their rooftop solar system
- Supplying emergency power during power outages
- Helping utilities and states reach their carbon reduction goals
Distributed battery energy storage systems also provide valuable grid services to utilities and co-ops, such as:
- Serving as dispatchable reserves of power that can be sent to the grid
- Providing load balancing abilities to help smooth out the daily load curve
- Lowering utilities’ demand charges through peak shaving capabilities
- Deferring major grid infrastructure investments
- Integrating renewable energy sources with the grid system
- Keeping polluting plants offline during high energy demand periods