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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:

Click to enlarge.

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.




Just selling older EV/PHEV battery packs for buildings and homes could add up to a lot of storage. 10 kWh times one million homes provides a LOT of distributed storage and could take a lot of load off the grid for summer air conditioners.


A big chunk of domestic demand is thermal related, its much cheaper to store heat. It is also more efficient to use natural gas power stations and heat pumps than to heat direct with natural gas (ignoring CHP)


Solar thermal home heating can easily be done in the southwest U.S. saving lots of natural gas to make fuels. However, natural gas is SO cheap the people will not invest in this.


My grandmother heated her house with electric thermal storage units;

She charged them up at night when the rates were low and turned on the unit's fans when she got up in the morning.


Li ion will be at about $350/kWhr in 2012. That's less than half of what EPRI used as their price assumption. The cost I quote is for vehicle batteries too, which have high energy and power density requirements. Personally I think the renewables industry is missing an opportunity to get involved with battery development that is tailored to their specific needs. Because the volume and power density requirements for stationary applications isn't as severe as the vehicle applications. Meaning there are a number of existing alternative chemistries that don't work for vehicles, but are perfectly suited for stationary. For instance solid electrolytes which are typically too resistive to allow for the high current densities that the vehicle applications require, could be fine for stationary applications. This would allow the use of high energy electrodes such as sulfur cathodes and silicon anodes, which are also being developed for vehicles, but with many more intrinsic hurdles to be overcome. Stick a glass electrolyte between these and see what happens. You'll get low current, but high energy. Since your not volume or mass constrained as when you have to haul the battery in a vehicle, you just adjust the electrode area to give you the needed system current level output and call it a day. The thing with stationary therefore is just to get the cost down, but sulfur and silicon are by definition dirt cheap vs. the transition metal oxides and hard carbons used in the vehicle batteries. So that should help. That and large volume production facilities like they are now building in the US and which are beginning to come online.


E-energy storage will evolve rapidly during the next 5 to 10 years. Lower cost batteries designed for fix storage usage (as ChrisJ) suggested, will be part of the solution.

Electrified vehicle batteries could play a progressive role, specially when their performances have reduced to the point when they have to be replaced.

V2G may also materialize to help with peak demands.


I tend to think of air conditioners in the summer in the southwest U.S. when considering peak demand. I have read that the power consumption then can be three times the nominal demand. Distributed storage could help with turn on current for all those non synchronized air conditioners.


Absorption AC systems can use the heat to cool the house, so perhaps there is a market for such a system storing heat at night and then running the AC during the day.


This is a good way to begin the practical discussion of how to implement distributed energy and storage systems. The storage component functions in small neighborhood grids to load level and provide backup should one (or more) neighbor have an outage.

But more than likely, intelligent neighborhood grids can handle up to 10 percent localized failure of stand alone CCHP systems. Of course with distributed energy the is no single or central power source - the entire community contributes to their own and neighbor's power requirements.

From a social point of view this means that low income, not-for-profit, educational and city services in distributed energy communities will receive locally produced energy for little or no cost. This eliminates the tax collection/accounting/subsidy/rate award structure of present centralized energy systems.

Community, responsible for community.

Looks like the future is now...


Absorption AC with evacuated tube collectors are a proven method. Yazaki has a 10 ton commercial unit that could be used on office buildings and schools, but someone must pay for it and that is less likely to happen.


DOE is supporting a number of municipal CHP energy projects - there are 2-3 business installations in Oregon. What we need to see is a demo 25kWh Rossi-based system able to produce absorption AC heat AND enough remaining heat to power a Stirling-type genset. IF the overall efficiency was 60% or more - it would be significant.

Such a device may be viewed as disruptive. However, should the maximum heat output (kWh) be capped (there are ways) at some relatively low number - these low power systems will not significantly threaten traditional or alternative energy products.

It is time to build a couple prototypes and put them in real field tests. Distributed energy must be seen as a way to unburden the established grid/centralized power structure. It relieves pressure to build more power plants of all kinds AND lowers cost to home owners and small business.

It also eliminates need for some percentage of foreign oil and drastically improves energy security.


Errata: I should have used plain kW rather than the kWh units for referencing heat in CHP systems.


I could see utilities and home owners working on installing decommissioned PHEV batteries and putting UPS banks in garages. There is a program in California that puts a turn off box on air conditioners. If there is a heavy load it might delay the turn on of your air conditioner in exchange for a lower power rate.

With UPS in your garage, the air conditioner can turn on when the thermostat tells it to and the UPS provides the turn on surge current. Commercial air conditioners are synchronized so that you do not have thousands of them turning on at the same time. This is not the case with home air conditioners, maybe with the "smart grid" this could be a feature.


With Smart Grid, every Volt and Leaf could provide regulation services; AC Propulsion demonstrated this in 2002. With Level 2 connections (220 VAC/24 A, 5.3 kW) some 3 million of them could take the market and get compensated more for their services than their battery systems cost.

The worth of such services declines as more bidders enter the market, but the cost of batteries is falling too. If fees from services can underwrite the first few million PEVs in the USA, that would be a huge boost and accelerate adoption.


If utilities offering Smart Grid with the AC Propulsion-type V2G capability - were to slash cost of a kWh by 50% - they might get some takers. Which would help expand the adoption rate.

Question is, WILL utilities be willing to take the risk to do so? Or just sit back and clip the coupons from increased overnight energy sales?

Bob Wallace

ChrisJ - on what are you basing your statement that "Li ion will be at about $350/kWhr in 2012"?


The idea of using degraded EV batteries for grid storage might have been pushed out further into the future if BYD's claims hold.

BYD has released their first EOY performance summary for their EV taxi fleet. They report no drop in battery range after a year of mostly rapid chargers and a fleet average of 36,400 miles.


That's bad news for the grid; large fleets of cars reliant on quick charging make demand spikes even worse.

What we need is fleets of EVs in commuter and personal service, charging mostly at night but plugged in most of the time. These can be used as schedulable demand and increase system reliability.


That is a likely scenario and one that makes sense. I like the idea of commuters charging at work, we immediately see cleaner air and imported oil reductions over time.

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