By Gio Hwang, Vice President of Business Development
Posted November 4, 2021
The U.S. energy storage market has hit an inflection point. According to the Energy Storage Association’s latest report, in 2021, investment in the energy storage market will exceed $5B, which is a growth rate of 4X over the previous year.
With growth in the market expected to continue at a rate of at least 20 percent each year through 2025, a significant amount of innovation is required to support progress. Among these innovations is a new approach to deploying utility-scale standalone storage or hybrid solar + storage projects.
Just as the solar industry has evolved from a reliance on the integrators to manage and drive projects, the storage market is also moving in this direction. As the technological and commercial risk of storage projects becomes manageable, EPCs, developers, and power plant owners have new options. Today, they can work with a new breed of technology-agnostic grid integration and energy management system (EMS) providers, reducing their reliance on the traditional energy storage system integrator.
Energy Storage and Grid Resiliency
An Energy Storage System (ESS) plays an important part in utility-scale clean energy deployment. It adds resiliency to the grid, helping to reduce imbalances between demand and energy production.
A battery energy storage system (BESS) can dispatch electricity when demand outstrips current production, if there are disruptions in traditional forms of generation, and at times when intermittent renewable resources are not generating electricity. Energy storage can help the grid operate reliably, safely, and economically, reducing the reliance on gas peakers during peak demand hours. When co-located with variable renewable energy sources, it can make solar or wind dispatchable, which will enable more renewable resources to be built and utilized. In this way, a BESS can contribute to decarbonization goals, and save costs, making the grid as a whole more flexible, resilient and reliable.
Among the benefits are:
- Cost savings: battery energy storage can extend the capabilities of existing infrastructure and defer the need to build additional grid assets such as transmission and distribution lines in a highly congested grid
- Resilience: battery energy storage can provide backup power during disruptions caused by natural disasters or other emergencies
- Flexibility: As demand changes, battery storage can inject or extract and store energy as needed.
- Compliance: Storage can provide ancillary services such as frequency control and operating reserves and effectively manage distributed resources like electric vehicle chargers and rooftop solar
Solar + Storage: A New Approach to Deployment
According to SEIA, over the next decade, the U.S. will dramatically ramp up standalone storage and solar + storage installations to achieve economic and climate goals. Solar already accounts for a large proportion of energy generation projects paired with storage. SEIA’s website quotes a May 2021 report from Lawrence Berkeley National Lab showing that of all the energy generation projects in interconnection queues nationwide, solar accounts for the majority of projects paired with energy storage.
As more and more states are aiming to achieve net zero carbon emissions, solar and wind are becoming a greater share of the bulk power in our energy mix. As we increase adoption of solar and wind, we need more energy storage to unlock that vision and turn off those gas turbines.
With these developments, power plant operators are starting to get more comfortable and familiar with storage technology. Previously, when they were procuring these energy storage systems, they were typically relying on a turnkey project from an energy storage systems integrator. Although there are benefits to using an integrator, there are also costs. If asset owners are more familiar with how to manage and deploy these technologies, and have a partner who can manage the installation, they do not need to pay that premium.
Power plant owners can now procure directly from the battery OEMs and work with a qualified EMS provider who has experience deploying projects on a massive scale. This allows them to cut out the integration middleman and save time and costs. In this new model, a vendor-neutral EMS provider can work with the asset owner to pick the DC block of their choice that meets their technical requirements, while minimizing ever-increasing supply chain risks.
The Merit Approach
Merit Controls has developed a vendor-neutral open architecture that works with myriad assets and is proven at utility-scale. Today, our offerings support more than 4GW of solar and battery storage, working with notable leaders such as Enel Green Power, NovaSource Power Systems and Borrego. In addition, our deep modeling knowledge and expertise helps with energy storage modeling for both distribution planning and interconnection submissions.
We are setting the standard in grid integration products and services. We provide advanced, proven grid integration products and services for utility power generation, all in one platform. To learn more about how we work with EPCs, developers and power plant owners to deploy solar + storage at utility scale, contact us today.