Utilities recognized the importance of these technologies and built many of them in the 70’s and 80’s, resulting in large-scale storage facilities representing nearly 3% of all generation capacity by the early 1990s. Pressure from deregulation caused this investment to fall off, and their impact on the Grid will continue to diminish over time as their representation in the overall market shrinks without renewed support. A growing number of private industry firms are now entering this market with updated and innovative energy storage technologies, which stand to reverse this trend.
By maintaining a cache of ready power, these assets can provide much needed flexibility in times of extreme urgency. The benefits of this ready power will be most easily seen in the improvement in the efficiency, reliability, and security of the Grid.
At its heart, energy storage is an economic decision. Without storage, an industry must develop and maintain an entire delivery network capable of meeting the highest peak of the year. With storage, the owners only must build out what is necessary to carry a heavy, but normal load—resulting in a much higher utilization of the existing equipment, and hence a higher return on their investments (ROI). Without sufficient storage capacity in the electric power industry, excess generation and transmission facilities have been built and remain underused for much of the year. On average, power facilities are used only 55% of the time; and transmission systems are only marginally better at 60%. By establishing a number of caches of energy along the value chain, storage can balance supply with demand on short timelines. This allows for a more efficient use of the existing resources in the market, lowering prices and improving the quality of the service.
Energy storage facilities can also improve the reliability of retail customer’s electricity service. It is estimated that poor power quality costs businesses $150 billion a year in lost productivity. Electricity consumers need assurances that the power they contract for is delivered as the market evolves through deregulation. Otherwise, economic growth will be stymied as firms expend mostly wasted effort attempting to solve this problem with the wrong tools. On-site energy storage assets can dramatically improve the firm’s power quality, and hold a small cache of energy to let the firm “ride-through” short power outages.
The Security of the electric power grid requires maintaining and improving the level of reliability and capability of the network. Unforeseen events can come from volatility from normal operations, and contingencies from unplanned failures of a component. By providing a first-response potential, and enhancing the capability of other assets Energy Storage assets will improve the Security of the US electric power grid.
Energy Storage has a vital role to play in the future security of the US wholesale electricity transmission grid. Storage assets placed strategically throughout the network are the only assets that can immediately respond to failures on the grid in a flexible manner. Acting much as a shock absorber, Energy Storage will be the first line of reaction to unforeseen events across the entire transmission network. Acting in concert with other technologies in a coordinated fashion, they will be an essential component to improve the reliability and capability of the network, issues that are necessary to enhance overall Security.
Energy Storage also has a role to play in enhancing the Security of the retail electricity market. Large commercial and industrial users increasingly rely on electricity to power information technology and precision manufacturing equipment—equipment that does not allow for power disruptions without serious repercussions to their bottom line. Currently, UPS (universal power supply) energy storage devices are used to provide reactionary protection for some critical loads. However, energy storage assets could also be incorporated into other retail energy strategies to improve the capability of the consumer to weather events.