Commercial-scale battery energy storage systems (~100kW+ nominal power output) and utility-scale battery energy storage systems (~1MW+ nominal power output) are a rapidly growing sector of the variable renewable energy landscape. As VRE systems, particularly solar PV systems, increase in popularity and market penetration, large BES systems are emerging as the ideal complement to transform the one-dimensional solar-only system into a flexible, powerful Swiss army knife of capabilities. With rising utility rates and daunting price schedules, gaining traction, BES systems provide the autonomy to stay abreast of uncertainty.
Why should I invest in it / what are the benefits? What situations would benefit from commercial BESS?
According to NREL, “Battery system design and dispatch strategies differ depending on the use-case and the value streams that are being tapped…. Depending on the market structure in a particular location, commercial-scale, behind-the-meter battery projects may tap into one or more of the value streams below.”
Demand charge reduction: by discharging the battery to reduce on-site power demand to levels below power peak thresholds [<kW], a site can shave the peaks in usage, thereby lowering demand charges on its electricity bill.
Time of use/energy arbitrage: by discharging the battery to reduce on-site loads when retail energy prices are high [$/kWh], a site can abstain from drawing from the grid when prices are high, therefore lowering energy charges on its electricity bill.
Capacity/demand response: by discharging the battery to power the grid when the utility/ISO requests [kW], a site can receive compensation for backup for the grid itself.
Frequency regulation: by frequently charging/discharging the battery to regulate the grid [f, V], a site can receive compensation for regulating the grid itself.
Energy sales: by discharging the battery and selling power to the grid when retail energy prices are high [$/kWh], a site can receive better pricing on energy than through solar alone.
Resiliency, independence, and flexibility: by discharging the battery during outages, a site increases its energy independence and avoids the costs of interrupting regular operations. By decreasing reliance on the utility grid, your system will help reduce your carbon footprint, increase your energy independence, and open up new revenue streams that would normally be closed to a solar-only project.
When designing a solar + storage project, it’s important to consider which of these value streams are active/effective in your area, and to what degree they will affect your bottom line. As the modern electric grid becomes more decentralized, and variable renewable energy systems continue to gain market share, utilities and ISOs will gradually turn to energy storage systems to manage the new grid’s inherent variability. Installing a robust and flexible BES system will increase the financial viability of your project and provide stability in an increasingly variable landscape.
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