Why is energy storage important?
Energy storage fundamentally improves the way we generate, deliver, and consume electricity. Energy storage helps during emergencies, such as power outages caused by storms, equipment failures, or accidents. But the game-changing aspect of energy storage is its ability to balance power supply and demand instantaneously, which makes power networks more resilient and efficient.
Why should I consider energy storage for my business?
Owning your own Energy Storage System is your path to greater grid independence and grid casualty preparedness, as well as to significantly reduced electrical costs. It will support your renewable energy system by storing the energy you generate during the day for use in the evening, or whenever your peak demand period is.
In addition, with energy storage, you can take full advantage of the daily fluctuations in the price of electricity by purchasing electricity at the cheapest price of the day, and consuming stored electricity during the most expensive hour of the day.
And last, but not least, as the owner of an energy storage, you can participate in the electricity grid frequency reserve market by offering frequency control capacity to the transmission system operator, who pays a daily variable price for the control reserve offered to the energy storage operator.
The electricity grid frequency reserve market is by far one of the best uses and sources of revenue for energy storage.
How much does energy storage cost?
We are often asked what the price of a 1MW energy storage is.
The answer can be anything between 500k€ and € 5M€.
In reality, the price of an energy storage is determined by its capacity, ie the amount of energy in the battery, which is defined as kWh or MWh.
The product development and cost level of Li-Ion batteries are falling all the time, and with it the prices of energy storage systems are falling. Slower in small systems than in large systems. It can be said that the average price of energy storage equipment ranges from € 320 to € 700 kWh depending on the size of the system, the characteristics of the energy storage and the state of the art.
It is always a good idea to look at what kind of energy storage will be used and what power / energy ratio would be optimal to get the optimal return from energy storage.
What are the key characteristics of Energy Storage Systems?
Rated power capacity is the total possible instantaneous discharge capability in kilowatts (kW) or megawatts (MW) of the Battery Energy Storage System (BESS), or the maximum rate of discharge that the BESS can achieve, starting from a fully charged state.
Energy capacity is the maximum amount of stored energy in kilowatt-hours (kWh) or Megawatt-hours (MWh). The energy capacity is often given as the so-called DC nominal capacity, which is the actual capacity of the Li-Ion battery at the battery terminals. However, since the DC nom. capacity is not usable in the whole system, the actual usable capacity is often described as the so-called AC nominal capacity, which takes into account the battery operating window (which is generally 90 – 95 % of the battery’s DC-rated capacity) and the DC-AC-DC conversion efficiency (which is between 95 – 98 %). As a rule of thumb, it can be said that the system’s available AC nom. capacity is about 90 % of the nominal capacity of the battery.
Storage duration is the amount of time the storage can discharge at its power capacity before depleting its energy capacity. A battery with a power capacity of 1 MW and 2 MWh of usable energy capacity, for example, will have a storage duration of two hours.
Cycle life/lifetime is the amount of time or cycles a battery storage system can provide regular charging and discharging before failure or significant degradation.
Self-discharge occurs when the stored charge (or energy) of the battery is reduced through internal chemical reactions, or without being discharged to perform work for the grid or a customer. Self-discharge, expressed as a percentage of charge lost over a certain period, reduces the amount of energy available for discharge and is an important parameter to consider in batteries intended for more long-term applications.
State of charge, expressed as a percentage, represents the battery’s current level of charge and ranges from completely discharged to fully charged. The state of charge affects a battery’s ability to provide energy or ancillary services to the grid at any given time.
Round-trip efficiency, measured as a percentage, is the ratio of the energy charged to the battery to the energy discharged from the battery. It can represent the total DC-DC or AC-AC efficiency of the battery system, including losses from self-discharge and other electrical losses. Although some battery manufacturers refer to the DC-DC efficiency, it does not describe the actual capacity of the system. AC-AC efficiency is typically more important to the operators of Energy Storage Systems, as they only see the battery’s charging and discharging from the point of interconnection to the power system, which uses AC.
What kind of maintenance costs does the energy storage have?
The energy storage is very maintenance-free and requires little maintenance.
In principle, there are no moving, consumable parts in the energy storage system. Depending on the chosen implementation solution, the cooling system is practically the only part that requires annual maintenance, which mainly consists of replacing and cleaning the filters.
What is the service life of an energy storage?
Very often an energy storage system is given a lifespan of about 10 years.
That’s a good rule of thumb, but still a little misleading because it is the applications for which the energy storage is used that matter, and how many daily charge / discharge cycles the energy storage is required to go through.
On average, batteries of today (2022) are capable of about 6 000 – 8 000 full charge / discharge cycles, after which their charge level will have dropped to about 70% of the original level, and they reach the end of their service life in energy storage applications.
It is often thought that this 6 000 – 8 000 cycles (or ten years) is the total lifespan of an energy storage system, but that is not the case.
The energy storage itself is a piece of equipment to which the battery can be easily replaced when it reaches the end of its service life. In the next 10 years, for example, the price of batteries will be only a fraction of the current price level, which means that with a relatively low renewal cost, another 10-15 years of new service life can be easily added to the system.