The Energy Information Administration (EIA) predicts utility-scale battery energy storage will double this year in the U.S. Their survey of front-of-the-meter generating units with a capacity of 1MW or greater has California in the lead with 7.3GW of storage, followed by Texas with 3.2GW. Utility-scale storage currently makes up the bulk of energy storage capacity (In 2023, utility-scale storage accounted for 79% of the total storage capacity in California, followed by residential at 13% and commercial at 8%), but residential and commercial energy storage capacity are not insignificant. As battery energy storage costs continue to drop, utilities and commercial and industrial businesses alike are increasingly recognizing the many benefits of integrating batteries into their power distribution and generation systems.
In leading states like Texas and California, battery energy storage installations are driven by a desire to store excess power generated by abundant wind and solar PV resources. Such is the primary use case for utility-scale storage projects, including California’s Moss Landing site which is currently the country’s largest at 750MW. And while storing energy is literally the purpose of these installations, what that stored energy is used for goes beyond what many consumers may perceive as simply a giant uninterruptible power supply (UPS). Granted, backup power is an important service, but for a transmission or system operator, or even an energy intensive industrial plant, backup power is only one of the many benefits instantly dispatchable battery power can offer. Let’s have a look at some of these additional benefits.
For utilities and front-of-the-meter batteries
Peaker plant replacement
Power plant replacer. Unlike traditional fossil-fuel generators or power plants with long ramp up/down times, batteries can absorb and dispatch power in a fraction of the time. This makes a battery energy storage system an ideal replacement for a utility peaker plant that only runs for a few hours a few weeks out of the year when major demand spikes occur. Locating utility-scale energy storage facilities at old power plant sites (like Moss Landing) is ideal since the new energy storage system can leverage the old power transmission and distribution infrastructure. This approach also enables a gradual phase-in of increasing battery dependence and phase-out of fossil-fuel generators.
Spinning reserve
Stand-by power. While a battery doesn’t have any spinning parts, its ability to absorb and release power on command makes it equivalent (with a faster response time) to a spinning generator’s ability to crank out more power when needed. Spinning reserve is power held in reserve, or on stand-by, so it can immediately be dispatched onto the grid when other generation sources drop, or load suddenly increases.
Frequency regulation
Frequency manager. Maintaining frequency to within .01Hz of the norm is critical to balancing generation and load. It’s necessary for preventing underfrequency load shedding, equipment damage, and generators and other equipment from tripping offline as they protect themselves from frequency swings. Responding to frequency deviations, a battery can inject or absorb power instantly to bring the frequency back to normal before more aggressive mitigation strategies need to be activated.
Resource adequacy
Supply/demand balancer. A battery can ensure sufficient reserves exist to maintain a balanced grid. Supplying power at the right place and the right time becomes simpler when batteries distributed throughout the network can dispatch power close to where it's needed.
Black start
Jumpstarter. Like jumpstarting a car battery, a battery can jumpstart (known as a black start) a power station to get the turbines running again after a blackout. Batteries can also enable a power plant to island or disconnect from the grid, maintaining certain functionality even when disconnected from the main power grid and absorb the plant’s generated power.
Voltage support
Through their ability to produce or absorb reactive power, batteries can help maintain a specific voltage level under both steady-state and post-contingency operating conditions, replacing mechanical means such as capacitors, static VAR compensators (SVC), and synchronous condensers.
For commercial & industrial applications and behind-the-meter batteries
Energy arbitrage and time-of-use bill management
Buy low, sell high. Purchase and store power in your battery during off-peak hours when prices are lowest and use that stored power during peak hours when electricity prices are highest.
Demand charge reduction
Energy shifting. Businesses that cannot shift their energy consumption patterns can rely on batteries to supply power during times when grid power is subjected to demand charges.
Increased PV self-consumption
Save energy overflow. For businesses with installed solar PV, excess power that is generated by the panels can be stored for later use rather than curtailing power production to meet the current load.
Providing ancillary services
Make extra cash. Commercial and industrial entities with battery energy storage can take advantage of offering ancillary services to the grid in energy markets where they are supported. This can include voltage support, fast frequency response, regulation up/down, and response reserve service. From an ROI perspective, providing ancillary services can be more lucrative than simply doing energy arbitrage, especially if the battery isn’t being used for other purposes.
Backup power
Giant UPS. While providing backup power is often the first battery use that comes to mind, the percentage of time that a battery is put to this use is generally very low, which means that with the right energy management system (EMS) that can manage the battery’s priorities, that battery can be used for other applications while it waits to provide backup power.
The right energy management system is key
If many of these advantages appear redundant, it’s because they are. Utilities have redundant systems in place to maintain a balanced grid. The good news is that several of these redundant systems can be aggregated and handled by a single battery that serves multiple use cases because the applications are not normally all occurring at the same time.
A critical component for managing multiple use cases is the control system. Much like an elevator needs a software system to get you to the correct floor, you need a software controller that has purview over the network and other energy resources to manage when the battery should absorb or dispatch power and when it should remain in a holding pattern. Such a controller, sometimes called an EMS, enables all these applications and benefits while balancing business requirements with the battery energy storage system’s capabilities.
A sophisticated EMS that can handle optimization of multiple, simultaneous objectives is ideal for getting the most value out of a battery installation. Adaptability to changes in requirements or updates to system capabilities are also important aspects of the EMS. An EMS can be a separate software element, or it can be bundled within a power plant or microgrid control system.
But wait, there’s more
This high-level overview of battery benefits is just the beginning. If you’re interested in further insights into how you can maximize the value of your battery, download our Maximum battery value guide.