I study batteries for a living, and I’ve noticed that an astonishing new battery development is announced nearly every day. If I didn’t know better, I’d say we’re about to be inundated with batteries flooding the market. But I do know better. And though grid storage technologies are all the rage right now, most aren’t anywhere near market maturity. Our new infographic Making Sense of Grid Energy Storage in 2016, as well the companion report An Explanation of Current Grid Energy Storage Technologies, cuts through the hype and narrows the field, looking at the handful of technologies that are already commercialized or nearly ready for market.
But if you listen to the chatter, it almost seems inevitable that one day soon, batteries will be used to soak up electricity anywhere and everywhere they can, fixing all of the problems we currently face with our aging electric grid. Wouldn’t that be nice? A more sobering—and probably more realistic—projection is that game-changing battery technology will always be “5 to 10 years from market” as long as the utility-customer relationship remains fundamentally unchanged. The missing key in grid storage advancement isn’t so much the storage technology itself, but the effective enabling of the many stacked functions that are needed to unlock the technical and economic benefits of grid storage.
What are these “stacked functions”? They’re all of the many value-added services that grid battery storage promises to one day provide, such as offset peak power usage, store excess and/or on-site renewable generation, supply backup power, improve power quality, reduce grid strain, and other wonderful things. Unfortunately, a relationship that essentially involves a one-way flow of electricity from the utility, countered by a once-a-month flow of dollars from the customer, does not lend itself easily to the real-time grid interactions that grid storage could make possible. In reality, we can’t even begin to derive value and stack the functionality of batteries to benefit the customer, utility, and wider market until we restructure the utility-customer relationship. The need for restructuring is complex and multifaceted, but it will likely involve major changes to utility regulation, energy price signaling, energy and information flows, and even the way customers see and think about their utilities. If we’re ever going to have a shot at putting this tech to good use, we need to experience as much change in the social dynamics of grid energy management as we’re seeing in technology advancement.
These challenges are certainly difficult, and they won’t come to resolution overnight, but the following opportunities to shift and restructure could help improve the potential outcomes for grid storage deployment:
- Learn about the current and near-term niche market opportunities for storage. Perform customer segmentation studies and detailed economic analyses at the territory level to gain market data.
- Learn from the leaders. Regulators in states like California and New York are driving the grid storage market. Keep a close eye on these states, which will serve as proving grounds for what works and what doesn’t in the budding grid storage marketplace.
- Understand the technology. Not all storage technologies are created equally, and some are better fits for certain applications than others are. Do your homework and due diligence when it comes to selecting technologies and vendors. Read our recent report for a tech overview.
And don’t worry; you’re not in this alone. Your utility peers are equally challenged. But E Source is here to help. If you’re having trouble finding the best path forward in developing your grid storage strategy, reach out and let us know!