Distributed Energy Storage Systems: Page 3 of 6
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What are the biggest challenges to the increased deployment and commercialization of energy storage solutions?
First, the energy storage industry needs to continue to drive down costs—not only battery costs, but also hardware costs and soft costs. Second, the industry needs to move beyond the battery and recognize that other energy storage technologies—particularly software—play a key role in energy storage system performance and return on investment. Third, the industry needs to avoid adopting a cookie-cutter approach to grid-scale energy storage. These are complex systems, and a simplistic approach is likely to result in system failures or suboptimal deployments. Finally, the industry needs to continue to advocate for common-sense regulations and incentives that encourage energy storage deployment. In spite of these challenges, we believe the energy storage industry is heading for a period of strong and extended growth.
What can technology or service providers do to improve the value of energy storage systems for independent system operators and distribution system operators?
Technology and service providers can improve the value of energy storage systems by developing systems that can perform multiple applications, allowing their owners to use a single energy storage asset to access multiple value streams. For example, owners may want to program their systems so that they can be used for renewable smoothing during one part of the day and for grid balancing or electric vehicle charging later in the day.
Energy management business development leader, Dynapower, dynapower.com
What products and services does Dynapower offer for solar-plus-storage applications?
Dynapower has deployed more than 230 MW of grid-tied storage inverters in North America and Europe. Nearly half of that installed base is storage plus renewable resources, either PV or wind. We employ multiport inverters, which allow storage and renewables to connect to a single inverter. Compared to a solar-plus-storage system deployed with two single-port inverters, a multiport inverter system uses fewer BOS components, takes up less space and costs less.
What are the primary behind-the-meter applications for Dynapower’s inverter-based energy management solutions?
Solar Grid Storage, which SunEdison acquired in March of this year, was a pioneer in using our solar-plus-storage solutions to provide frequency regulation services in behind-the-meter applications. This approach allows a single project to capitalize on more than one revenue stream. The industry needs to quickly move in this direction in advance of the reduction in the commercial investment tax credit for solar property, which is scheduled to drop from 30% to 10% in 2017. Our solar storage systems are also used in microgrid applications to provide emergency power along with frequency regulation and solar generation. This approach is particularly useful in public buildings that are designated as emergency shelter locations, such as police stations, fire stations and schools. Massachusetts recently awarded several grid resiliency projects, some of which will follow this model.
What battery technologies are you using in your energy storage systems?
We deploy most of our systems using lithium-ion batteries with battery management systems. However, some chemistries are better than others for certain applications. At the highest level, you need to distinguish between power applications, such as frequency regulation, and energy applications, such as load shifting. On a couple projects, we have used our multiport inverters in conjunction with two different battery types, such as lead-acid and lithium-ion. This allows us to use an energy-type battery to participate in energy markets and a power-type battery to participate in the power market, which provides attractive improvements for the project’s internal rate of return.
What are the biggest challenges to the increased deployment and commercialization of distributed energy storage solutions and microgrids?
Financing is probably the largest barrier, just as it was at one point with PV. It will take a while for the financial community to get comfortable with bid-in markets for frequency regulation. Investors also have questions about the capacity degradation associated with some new battery technologies. Battery costs are trending downward, which will have a positive effect on deployment rates. However, the bigger challenges are unlocking multiple revenue streams and overcoming concerns about bankability.