The power generation sector is one of the important industrial sectors which contribute to the increasing carbon foot print. When it comes to power generation, the trend is shifting from non-renewable sources of energy such as coal and crude oil toward more clean and renewable sources such as wind and solar power and many others that are at nascent stage, but likely to gravitate towards commercialization. Recent developments including a major utility holding company in the U.S., viz. Xcel Energy, to phase out all its power generation assets that use non-renewable sources and committment to becoming a 100% clean energy producer has raised eyebrows. Apart from aiming toward 100% clean generation, there is also an increasing focus toward the use of energy efficient technologies, such as battery storage (using non-lithium ion batteries), distributed generation, electric grid modernization and advanced nuclear reactors along with hydrogen, sunlight to fuels, smart cities, biological sequestration and advanced manufacturing technologies, being the top priority clean energy innovation areas, ushering in a new era of clean energy 2.0.
MarketsandMarkets™ View Point:
Ajay Talyan – Analyst : Energy and Power, at MarketsandMarkets™, shares his Point of View as mentioned below:
Battery energy storage system (BESS) — Benefits in balancing power generation and demand:
The battery energy storage systems market is segmented by connection type and application. The on grid connection segment is expected to grow at the highest CAGR duirng 2018–2023. This rapid growth is due to the use of Battery storage systems in main applications such as power demand management, load leveling, and peak shaving.
The Utilities segment is expected to grow at the highest CAGR during the forecast period. Power generation from multiple energy sources, both renewable and non-renewable, can cause a mismatch in generation, transmission, and consumption. Hence, utilities install battery energy storage systems within the electricity grids to control voltage and frequency deviations. The battery energy storage systems provide a cost-effective alternative to the conventional infrastructure, mainly helping substations and transmission and distribution network to meet the growing peak demand.
The battery energy storage system is one of the most effective storage technologies avaliable. This is because of the reduced cost of its implementation and the advances in battery development which have resulted in higher energy densities and incidence of improved chemical compounds used in the batteries. The integration of battery energy storage systems offers enormous benefits, which help Distribution System Operators (DSOs) to overcome the challenges caused by increased power distribution, fluctuation, and uncertain generation from renewable energy sources.
The battery energy storage systems are also unique as a storage unit in power systems as they offer advantages such as improved power quality, reduced energy costs, reduced emissions, and the ability to provide ancillary services to the overall system. They also promote the usage of locally produced energy and improve the reliability of the supply system as a whole, and reduce the need for emergency reserves of energy. Thus, battery energy storage systems improve grid efficiency, reliability, and power quality.
The battery energy storage systems have good environmental impact as these systems integrate well with communication technologies which act as a useful tool to measure and report greenhouse gas emissions at all the stages of system life cycle. When it comes to residential applications, battery energy storage systems in combination with Photovoltaic (PV) systems can reduce CO2 emissions by 20%.
The implementation of battery energy storage systems is omnipresent
A sea of companies is coming up with battery energy storage system projects in their power network. In 2018, Eskom, a South Africian electricity utility, supplying close to 95% of the energy within the country, has launched a 360 MWh/ 1440 MWh Battery Energy Storage Systems (BESS) project. In 2018, The Energy and Resources Institute (TERI) with the support of MacArthur Foundation launched a pilot project to support the implementation of BESS at the distribution level, in Kolkata, India. The project is launched keeping in mind the ambitious targets of the Government of India to achieve 175 GW of renewables by 2022 and to reach 275 GW by 2027. Globally, various companies, regulatory bodies, and governments are exploring the benefits of the application of battery energy storage systems in the areas of renewable integration, frequency regulation as primary control, reliability, transmission congestion relief, transmission and distribution upgrade deferral, power quality, voltage regulation, peak load shaving, and spinning reserve. Apart from the benefits mentioned earlier, the reduced carbon footprint of the BESS will help governments decarbonize their power economies.
Some of the Industry experts opine:
“I was stunned at the ability of batteries and the battery industry’s ability to meet our needs. This was something I didn’t expect to see until 2020. Here it is in 2017, and it’s already in the ground.’’ - Michael Picker - President - California Public Utilities Commission
‘“NY-BEST’s mission is to grow the energy storage industry and establish New York State as a global leader,” - Dr. William Acker, Executive Director - NY-BEST
‘‘Our goal is to fundamentally change the way the world uses energy. It sounds crazy, but we want to change the entire energy infrastructure of the world to zero carbon.’’ - Elon Musk – CEO – Tesla
The increasing use of battery energy storage systems will provide a number of value propositions to both commercial and industrial customers in the future, such as bill management where storage in combination with the on-site renewable power sources can help in hedging against volatile electricity prices. Higher grid independence in terms of increased consumption of on-site renewable sources can lead to energy bill savings as well as low carbon footprint. Energy storage as an ancillary service can act as an added revenue source. The market for the residential application is expected to grow at the highest CAGR of 38%, on the back of increasing adoption of solar energy production, as the fastest growing segment.
Clean energy 1.0 has taken many years of regulatory time and capital investment for a sector that majorly depends on reliability and safety. It will definitely take a long term commitment to get similar results from technologies still nascent to the market, but are soon to transition, with a special emphais on BESS leading upto Clean energy 2.0. With an increasing trend for a 100% clean energy future more corporations, utilities and states are likely to commit to the same. The pressure on the sector to continue to innovate is paramount, and the regulatory sphere will have an important hand in how the progress is expedited. It is very imperative that regulation is as innovative as the technologies.