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Energy storage is the missing piece of the puzzle to meet ambitious global carbon emission targets and the surging demand for clean electricity. When combined with a solar power generation system, a Solar+Storage system will compensate for some of the short falls of both traditional power generation and renewable energy product ion. It can help lighten up the load on an aging electrical grid and cut carbon footprint by reducing short term peaks in demand, managing grid instability and smoothing the intermittency issues when it comes to
There is a lot of value that energy storage can bring, especially with the growing installed solar capacity in the market . Yet the energy storage
industry is comparatively in its infancy. A few hurdles will have to be addressed before the market can see a scale-up in Solar + Storage projects
- Cost: We have often heard of the term “Energy trilemma” in the electricity supply industry – the challenges to balance the three critical goals of energy security, environmental sustainability and affordability. Whilst energy storage could help address the intermittent nature of solar electricity generation and shift the reliance on fossil fuels to a more sustainable renewable source, the current cost of energy storage is still too high to make a viable business case.
Despite drastic fall in energy storage prices, a Solar + Storage system still costs at least 3 to 5 times more than a solar PV system alone. However, on the bright side, the rapid developments in the energy storage industry are expected to further drive the growth in energy storage installations and economy of scale should ultimately lead to commercially viable system costs.
- Technology: Grid-tied energy storage application is fairly new and there is insufficient publicly available field data on the performance and reliability of each energy storage technology and integration algorithm. The bulk of the data are proprietary, making it difficult to take a long-term view of the technology risks. This issue is further compounded by several competing storage technologies and huge advancements being made by various manufacturers. The gaps in data and analysis capabilities can deter investments and hamper the growth of energy storage deployment.
Therefore, it will be beneficial that such energy storage performance metrics can be made available in the public domain, with major stakeholders or energy storage players in the market to list their system yields in an accessible database. Such open knowledge sharing can bolster the development of best practices in Solar + Storage system deployment and could spark further improvements across such assets in the long run.
- Application: In the paper “The Economics of Battery Energy Storage” published by Rocky Mountain Institute, energy storage can generate more value when multiple services are stacked across 3 different levels – behind the meter, at the distribution level, or at the transmission level. Depending on where you are in the value chain and the applicable local regulations, the full potential of the batteries can rarely be utilized and this limits the net economic benefit to the energy storage owner/operator. In particular, behind the meter value chain comes with great uncertainty given that policy and regulations may change over the system’s lifetime. With the bulk of the untapped value still lying with Distribution and Transmission companies, clear and consistent policy support is necessary to tap into the full value of energy storage.
- Lifetime: Energy storage systems typically last 10-15 years, less than half the lifetime of a typical PV system. Hence to manage energy storage life in a project, it would be critical to build in replacement cost for the energy storage systems and develop best practice in Solar + Storage system implementation so as to deliver the same cost-effective long-term benefit.
Energy Storage Systems are here to stay and the capacity of installations can be expected to grow exponentially over time in tandem with the already expansive growth of renewable power generation technologies such as Solar PV. Cheaper and more efficient energy storage coupled with renewable power systems are likely to play a key role as the world transitions to a clean energy future.
India’s focus towards large scale solarisation- 100GW by 2022 is the primary driver that is making energy storage industry development a necessity. Although India has added 34.4 GW of solar capacity over the years, most of this deployment has been in the utility space. Solar rooftop hasn’t been able to scale considerably and achieve critical mass in terms of capacity growth.
Solar by nature is intermittent and hence this limits the time period of its usage to only daytime. This intermittency can be constrained or even overcome by the use of electricity storage which represents a huge opportunity. Storage provides flexibility to the grid and will be able to ensure uninterrupted dispatchable, predictable and reliable power to satisfy the energy needs of the consumers whenever needed.
Rooftop solar is being well accepted by C&I customers which contribute to about 70% of the solar rooftop capacity. Rooftop solar with storage provides a perfect opportunity to ensure greater uptake of rooftop solar power by customers.
However , we are still in an early stage of energy storage for mass deployment. Higher costs of such a system due to the added cost of battery replacement and shorter life spans of projects pose a challenge in rapid deployment. As a nascent industry, it lacks historical data required by lenders to familiarize with the sector and hence investment into the sector adds another challenge.