By: Kevin Williams
Categories: Money Savings
There's an environmental and economic cost to our unending thirst for energy. Utility companies must burn fossil fuels to provide consumers the power for their homes and offices. In addition, they tend to produce more electricity than needed in order to provide a constant supply. Unfortunately, this results in wasted electricity, higher than necessary electrical bills for consumers, and global warming.
But, the development of intelligent home energy storage can help utility companies lower their carbon footprint as well as provide several other benefits to them. These include the integration of renewables into the grid, enhanced ability to meet customer demand, and an increase in the grid’s resilience and reliability. Many of these advantages come as a result of lithium-ion batteries installed by consumers for behind-the-meter (BTM) applications.
This is important to note because such battery technology is rapidly developing. As a result, its cost is decreasing about 20 to 30 percent each year. This means that commercial or utility-grade batteries could be available for mass consumption by 2020. In addition, according to the 2015 PwC Global Power and Utilities Survey, 97 percent of utilities executives from 70 companies in 52 countries expect a medium or high amount of market disruption by 2020 — and nearly half expect the biggest impact to come from energy storage.
Utility companies’ success is related to how well its capacity and production are balanced with variable demand, intermittent supplies, and interruptions. With this in mind, there are three models by which utilities can approach the acquisition and implementation of intelligent energy storage systems:
Owned – In an owned system, the utility company itself owns lithium-ion energy storage equipment. This can help you balance supply and demand, support the integration of renewables such as solar into the grid, and reduce the amount of fossil fuels that need to be burned. It has the additional advantage of reducing operational costs, and could even generate a return on capital investment itself. Unfortunately, this option can be quite expensive and its implementation must survive regulatory scrutiny.
Paid on demand – This approach is where you purchase a certain amount of stored energy from an independent third party. It works best if your utility’s output needs are predictable, and it’s a more economical approach than owning energy storage equipment. However, it carries the risk of possible interconnection hazards.
Incentives – You can incentivize consumers to purchase and install their own intelligent energy storage devices. This will make them more likely to buy-in to the concept of energy storage. However, you need to be careful with this because it can mean the risk of a reduction in profits.
The rapid development of lithium-ion batteries is making them more affordable every year. In addition, intelligent energy storage systems can communicate energy usage data back to your utility company to assist with load balancing and forecasting. There are tremendous benefits to utilities for investing in intelligent energy storage.