“Powering the Grid: Exploring the Applications of Utility-Scale Energy Storage”
“Utility-scale energy storage provides a range of services that can help make the electric grid more reliable, efficient, and resilient.”
With the increasing penetration of variable renewable energy (VRE) sources in the grid, the role of energy storage becomes increasingly critical. A utility-scale battery energy storage system (BESS) is a crucial tool for enabling a flexible and reliable grid. BESS can provide several services to the grid, including arbitrage, firm capacity, operating reserves, transmission and distribution deferral, and black-start capabilities.
Arbitrage One of the primary applications of BESS is arbitrage, which involves purchasing low-cost off-peak energy and selling it during periods of high prices. This can result in significant revenue generation for the BESS operator, as well as cost savings for ratepayers.
Firm Capacity BESS can also provide reliable capacity to meet peak system demand. This is particularly important in regions where there is a high penetration of VRE, as it can help ensure that there is enough capacity available to meet demand during periods of low renewable output. The duration of firm capacity service can range from 4+ hours, and it is typically valued in U.S. electricity markets through scarcity pricing and capacity markets, or through resource adequacy payments.
Operating Reserves BESS can also provide operating reserves, including primary frequency response, regulation, contingency spinning, replacement/supplemental, and ramping/load following services. These services can help ensure the stability of the grid by providing fast response to unpredictable variations in demand and generation.
Transmission and Distribution Replacement and Deferral BESS can also be used to reduce loading on transmission and distribution (T&D) systems during peak times, thus deferring the need for T&D upgrades. This can result in significant cost savings for ratepayers. However, the value of this service is only partially reflected in electricity markets, via congestion prices.
Black-Start Finally, BESS can also be used as a black-start capability, which involves bringing online units to start the system after a system-wide failure or blackout. While this service is critical for grid resilience, it is typically compensated through cost-of-service mechanisms rather than electricity markets.
BESS is a versatile technology with several applications in enabling a flexible and reliable grid. The optimal use of BESS depends on the needs and characteristics of the grid, as well as the regulatory and market structures of the region. As the role of VRE sources in the grid continues to grow, BESS will play an increasingly critical role in ensuring the reliability and stability of the grid.