Every market has unique demands regarding reliable renewable energy resources. Between 2022 and 2023, America witnessed exponential growth in the utility-scale storage industry, with 2022 seeing energy storage installations accommodating 11,976 megawatt hours of volume (MWh) and 2023 achieving a cumulative volume of 13,518 MWh in the 1st three quarters. MWh denotes energy storage capacity. Despite some delays, the American storage market saw record volume of 2,354 MW and 7,322 MWh in 2023’s 3rd quarter alone. The rising demand can be attributed to IRA provisions that incentivize companies for manufacturing and investment. Hence, utility-scale storage is only likely to grow. The US is expected to install 63 gigawatts (GW) storage systems from 2023 to 2027. If things continue at this pace, renewable energy resources will become comparable to fossil fuel resources, with the latter predicted to decline by about 4% a year by 2030.
Nevertheless, a power storage battery in the utility sector refers to battery storage that can accommodate a few MWh to higher volumes of energy. The location of these batteries can be found close to the distributed grid systems, transmission network infrastructure, and local industrial or commercial facilities. They facilitate the distribution and use of green energy when no energy is produced, or grids cannot access it during production.
Need for utility-scale energy storage systems
As hinted once, renewable energies face intermittency issues due to their dependency on weather conditions for energy production. It hampers grid stability and power supply. However, energy developers require systems that can send continuous and steady supply to the grid for local applications to ensure people smoothly move to Net Zero and rely on it. Hence, battery storage systems have become essential for everyone, including energy developers, utilities, and network operators. They heavily rely on these units to trade power at a wholesale market rate, make green energy more affordable, and leverage ancillary services revenue. Wholesale market trading refers to the bulk purchase of electricity from energy producers by energy suppliers.
Cost of the utility-scale battery storage
Various factors can guide the economics of power storage units. Size and lifespan can be the most important considerations. By analyzing your requirements accurately, you can optimize them to be cost-efficient. For help, you can visit Inthequeuellc.com. One can address this concern by looking at variants like duty cycle, battery cost, asset lifetime expectation, degradation, charge cost, discounts, etc.
- Duty cycle: The cost will be lower if you charge and discharge a higher amount of energy during the battery’s lifecycle without any additional expenses
- Battery price: Buying a unit will have a cost. Plus, you must also account for maintenance and operational expenses
- Battery storage system life-expectancy: The average lifespan for these units can be 25 years
- Degradation: Grid storage batteries often lose 20 – 40% of their performance ability in the first ten years due to the frequency of use
- Charge cost: These batteries need to be charged, which will incur a significant fee
- Discount: You can explore an opportunity to acquire something at a better price point
The battery storage sector is snowballing due to the proliferation of utility-scale projects. When evaluating these projects, you must consider the risks and potential hurdles based on their nature or purpose.