Rationale for Energy Storage

Interest in energy storage has grown for four other reasons than to balance electricity generated from variable renewable sources. These four reasons include: advances in storage technology; high price of fossil fuels, in particular gas; deregulation of energy markets, including markets for high-value ancillary services; and problems siting new transmission and distribution facilities.

Storage capacity can be used in dynamic pricing markets to buy electricity at the cheapest time during the day and sell it at its most expensive known as time shifting. Therefore, without subsidies, it must be financially viable at this highest price and below. This may result in a levelling of electricity prices through an increase in the off-peak price and decrease in the peak price.

Alternatively, energy storage can be used to ensure demand for electricity in off-grid applications, for example solar photovoltaic (PV) cells with battery storage. During hours of daylight the solar photovoltaic can generate electricity for the consumer and to recharge the battery. Then at night and other times when electricity generated from the PV cannot meet demand, the battery is discharged to meet the demand gap. If the battery runs low, an additional generator can be used to meet remaining demand.

There are other uses for storage than just to integrate more renewable capacity into the grid. Many of which are required in a conventional grid system with no intermittent capacity.

With a few exceptions, it is thought that it is economically more viable to have a grid with separate storage and renewable generation capacity. The main exceptions are:

  • A solar thermal plant, which has some storage capacity;
  • A solar PV/battery system with shared power electronics;
  • A wind/energy storage system at locations with weak transmission or where it is expensive to build new transmission capacity.
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