
Large-scale addition of wind/solar generation challenges utilities industry slow to keep up with modern technology
Ever lower prices for solar PV and wind power generation are driving demand for energy storage around the world, according to a new report from Navigant Research that examines the global market for energy storage for renewables integration with a focus on six utility-scale, commercial and industrial, and residential applications.
The uptick in large-scale additions of variable forms of generation presents challenges to the electrical grid, but energy storage systems are helping to mitigate concerns and integrate renewable energy resources without affecting grid reliability.
“Thanks to the continued drop in prices in energy storage, solar PV, and wind, energy storage is forecast to see strong growth across both utility-scale and behind-the-meter applications,” says Adam Wilson, research analyst with Navigant Research.
“Interestingly, while utility-scale renewable prices are experiencing bigger declines, formidable drivers in the behind-the-meter market, such as peak shaving and incentive programs specific to energy storage, are expected to push the segment to account for roughly two-thirds of forecast global energy storage capacity through 2026.”
According to the report, solar PV has reached grid parity in several locations around the globe and no longer requires policy incentives in order to justify deployment in many markets.
Energy storage systems have also experienced steady price decreases over the last five years and are establishing a growing presence in the grid-tied and remote system markets.
This has provided customers in both utility-scale and BTM markets greater flexibility in installing economically viable solar PV plus energy storage systems.
While this prospect is exciting in terms of global sustainability and greenhouse gas reductions, the large-scale addition of these variable forms of generation presents challenges to an electrical grid and industry that is slow to keep up with modern technology, according Navigant.
Challenges vary depending on the dynamics of the local grid, interconnection regulations, and the generation source.
The argument for energy storage for renewables integration (ESRI) relies on several different factors, including the condition of the local grid, the type and amount of renewable generation, and incentives and subsidies, among others.
The lack of consistency among regions and even countries within the same region proves to be another barrier to the deployment of ESSs as developers struggle to create standardized systems and financing options that are deployable on a large scale, according to the report, Energy Storage for Renewables Integration.