EPRI study finds US energy storage market could be as large as 16 GW of capacity if systems can meet $700–$750/kWh and all benefits can be monetized
|Positioning energy storage technologies. Source: EPRI. Click to enlarge.|
The total US energy storage market could be as large as 14 gigawatts of capacity if energy storage systems could be installed for about $700–$750/kWh and the energy storage owners and operators could monetize the estimated benefits, according to a new analysis of energy storage applications and technology options published by the Electric Power Research Institute (EPRI).
Further, the study found that actual installed costs would need to be lower to accommodate life-cycle impacts and maintenance. Niche high-value market sizes were estimated to total approximately 5 GW if energy storage systems could be installed for $1400/kWh and all benefits could be monetized.
The study found that in the near term, compressed air energy storage (CAES) systems, currently the most cost-effective bulk storage technology for long discharge durations; advanced lead-acid batteries; and Zn/Br flow batteries generally had the smallest gap to support the business case based on regional benefits. Lithium-ion batteries potentially could be the most cost-effective option in the long term for short duration (less than 4 hours).
However, the authors cautioned, specific applications and sites may vary, and a life-cycle cost and benefit analysis will be required to support a specific application business case.
The analysis looks at 10 energy storage applications that EPRI considers would serve the bulk of the energy storage market and includes applications to support wholesale energy services and renewable integration. The research also identified and modeled 21 benefits of energy storage, including power quality, power reliability, retail time-of-use energy charges, and retail demand charges, among others. The analysis compared the present value of benefits with the estimated costs for energy storage systems installed in various regions across the US.
There are a wide range of potential benefits for energy storage applications and when aggregated, these benefits can justify the costs of installing storage in many places. Storage systems dedicated to a single application can be valuable, but the true value of storage appears when the same system serves multiple applications.—Mark McGranaghan, vice president of Power Delivery and Utilization at EPRI
The study provides updated capital cost and performance information for storage systems available within the next one to three years, along with longer-term trends and emerging systems. It outlines a framework and methodology that electric utilities and industry stakeholders may use as one approach to estimating the value of energy storage systems in near-term applications.
The analysis summarized in this paper indicates that capturing multiple benefits—including transmission and distribution (T&D) deferral, local or system capacity, and frequency regulation— is key for high-value applications. Applications that achieve the highest revenues do so by aggregating several benefits across multiple categories.
When end-user reliability, distribution system support, and system capacity benefits are aggregated in a T&D support application, the present value range of benefits is estimated to be less than $500/kWh of energy storage for ISO markets modeled. For the same application, if the energy system is able to provide regulation, is located in an area with local capacity requirements, and is able to defer transmission investments, analysis estimates that the present value of benefits ranges from $1228–$2755/kW-h of energy storage. However, the number of locations at which all of these benefits can be realized together is limited.—“Electricity Energy Storage Technology Options”
The report notes that many of the energy storage options it discusses have not been validated in the applications discussed, and are not “grid-ready.” The report suggests a near-term roadmap to achieve grid-ready storage solutions by 2015:
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The report recommends that industry stakeholders develop a blueprint action plan and roadmap for advancing the market integration of energy storage solutions within the electric enterprise. EPRI’s goal is to enable and achieve grid-readiness of energy storage solutions by 2015.