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Journey to Energy Independence

Why Energy Storage?

Renewable energy storage"One of the greatest challenges facing the electric power industry worldwide is how to harness the immense renewable energy resources and deliver them in a useable form as a higher-value product. By storing the power produced from renewable sources off-peak and releasing it during on-peak periods, energy storage can transform this low-value, unscheduled power into schedulable, high-value 'green' products. Developing these resources will not only lessen environmental impacts but also increase each country's domestic energy security (lowering payments for imported energy)."

"Two challenges in particular are well known to renewable energy proponents. First, many of the potential power generation sites are located far from transmission facilities. Although the costs of connecting these sites to the transmission system will delay these resources from being tied into the local grid for a long time, it leaves the possibility for off-grid applications. The second challenge is the timing of resource itself. Generally, renewable energy sources are intermittent or vary in intensity throughout the day, with much of the potential for generated power not coincident with the peak demand. Renewables - especially wind - suffer from lower prices in the wholesale market due to the inability to guarantee delivery levels."

"Electric power has a tremendous weakness: it must always be used precisely when it is produced. Thus, one of the greatest challenges facing the electric power industry is how to harness the immense renewable energy resources and deliver them when they are needed..."
— By Richard Baxter.

Energy Storage A Nontechnical Guide by Richard Baxter is a complete resource on the operation of energy storage technologies and how they interact in the marketplace today. Richard Baxter explains new opportunities for these technologies, detailed descriptions of the technologies and their market applications, and business opportunities energy storage technologies can expect throughout the industry. The book explains how, and under what conditions, energy storage technologies can become a vital component of the electric power industry.

The Missing Link in the Electricity Value Chain

The continuing evolution of the U.S. electric power industry has been stymied because the electric power market is incomplete. Unlike other successful markets, it has no growing storage component. Energy markets need storage in order to successfully emerge from deregulation—witness the successful evolution of the gas industry. Without a storage component, the market will not function properly and price spikes, instability and volatility will remain chronic problems. Many of the market-based services (Like tailored end-use products) that make the gas industry as flexible as it is today only became available by leveraging storage capacity.

What is Energy Storage?
At its heart, energy storage is an economic decision. Without storage, an industry must develop and maintain an entire delivery network capable of meeting the highest peak of the year at any given moment. Without storage, the industry must operate within a "justin-time" framework that is dependent not only on variable end-use demands, but is also completely at the mercy of one of the most uncontrollable variables known: weather. With storage, the owners only must build out what is necessary to carry a heavy, but normal load—resulting in a much higher utilization of the existing equipment, and hence a higher return on their investments (ROI).

Although electricity cannot be directly stored (cheaply), it can be easily stored in other forms and converted back to electricity when necessary. The additional value of the electricity during peak demand can cover the cost of storing power produced at night. As demand continues to expand, storage can play a crucial, multi-functional role since storage facilities are designed to excel in a dynamic environment.

How Storage Helps
Without a means to store electricity, a number of conditions will remain endemic to the industry: 1) raised volatility, 2) reduced reliability and stability, and 3) threatened security. By utilizing energy storage technologies, each of these challenges facing the industry can be greatly diminished thereby leading to a more efficient market that costs less to operate, that is more responsive to market changes, and that is more reliable in the event of a disruption.

Energy storage technologies provide a wide spectrum of capabilities that will perform a number of applications throughout the market. These capabilities can be grouped into three market roles: 1) energy management, 2) bridging power, and 3) power quality & reliability. Since the purpose is to act as a ‘shock absorber’ to the system, the incremental and beneficial impacts will accumulate as they are implemented.

Market Role
By supplying power when and where needed, energy storage will create a far more responsive market. It will:

1) Reduce the need for additional transmission assets,
2) Be the preferred supplier of ancillary services,
3) Provide better integration of renewables into the system,
4) Support more efficient use of existing assets,
5) Improve the reliability of electricity supply,
6) Increase the efficiency of existing power plant and transmission facilities, and
7) Reduce the investment required for new facilities.

The current power market suffers from uncertainty. The regulatory framework is incomplete, obvious market leaders have fallen, and the winning business models are still not defined. Energy storage can help by improving the economic efficiency and utilization of the existing system, not by replacing it. By optimizing the existing assets in the market and creating more opportunities, increased private industry investment will move into the market prompting greater competition and lower prices.

Read the full report:
 Energy Storage - The Missing Link in the Electricity Value Chain
 (Downloads a 23 page white paper in Adobe PDF format)
 Published by the Energy Storage Council  © May 2002

"Energy storage can improve the efficiency and reliability of the electric utility system by reducing the requirements for spinning reserves to meet peak power demands, making better use of efficient baseload generation, and allowing greater use of intermittent renewable energy technologies. Energy storage technologies include utility battery storage, flywheel storage, superconducting magnetic energy storage, compressed air energy storage, pumped hydropower, and supercapacitors."
- U.S. DOE Energy Storage Technologies

Energy Storage - The Sixth Dimension of the Electricity Production and Delivery Value Chain
(Downloads a 34 page Adobe PDF document)
By Jason Makansi
Executive Director, Energy Storage Council 


Information Links:
California Energy Storage
Electricity Storage Technologies
Applications of Electricity Storage
Energy storage (Wikipedia encyclopedia)
The U.S. Department of Energy's Distributed Energy Program

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