One of the reasons digital technologies remain interesting is their ability to evolve and change. Energy storage definitely fits into this category. It started out simple, storing electricity, but it quickly became apparent that it could do much more. One of the most popular branches of technology is behind the counter (BTM) applications. Consumers loved them, as did utilities and regulators. With falling prices, increasing blackouts and government stimulus, the trend is likely to continue.
As exciting as the BTM market is, utilities and grid operators have also been making waves with energy storage systems on their side of the meter. The one that is attracting the most attention is utility-scale battery energy storage systems (BESS). The application has been around for over a decade, but it has evolved to the point where it is playing a key role in modernizing the power system.
Li-Ion is the leader
The technology is proving to be a valuable, versatile tool in transforming the energy sector. Proponents have said modern BESS applications supercharge the technology. According to NREL (National Renewable Energy Laboratory), BESS technology can improve the flexibility of an energy system. They use a variety of battery chemistries such as lithium-ion (Li-Ion), redox flow, lead acid, and molten salt. But it was Li-ion technology that led other chemistries when it came to utility-scale BESS devices on the market.
Before we continue, it would be a good idea to define what is meant by utility scale. Several terms have been used interchangeably, such as E.g. utility scale, large scale, long duration etc. and this can be confusing. Let’s stay with the utility scale. Utility scale makes it clear which side of the meter is being discussed, but what is meant by utility scale? To keep it simple, a battery is all about rating and energy capacity.
A utility-scale BESS typically has a power rating in the range of a few megawatts (MW) to hundreds of MW. Energy capacity typically ranges from several megawatt hours (MWh) to hundreds of MWh. There are some other important properties like memory duration, cycle life, round-trip efficiency, etc. that are important when specifying the device and add a lot of complexity to the topic.
Charge energy storage
For this discussion, MW and MWh are the important quantities needed to understand the technologies and their projects. These are also the most used terms in the announcements of new BESS installations in the utility area. The key takeaway here is that utility-scale BESSs are becoming the energy storage technology of choice for the power grid. The July 2022 EIA (US Energy Information Administration) Monthly Electricity Report provides the statistics to support this.
The report states that the installed utility-scale BESS rating in the US has tripled from 2020 to 2021. EIA gave further details, saying that the actual figures have increased from 1,438 MW in 2020 to 4,631 MW in 2021. Continued: “The increase was driven by the addition of 106 utility-scale BESS with a capacity of 3,202 MW which went into commercial operation. It is interesting to note that the EIA has placed a caveat on the utility scale rating of “equal to or greater than 1 MW”. About 78% of the battery storage capacity added in 2021 was built in the service areas of Regional Transmission Organizations (RTOs).”
The EIA report provided insights into the forces driving the deployment of BESS, and they are just as interesting as the technologies associated with BESS devices. Operators reported more applications going beyond the traditional ancillary services such as frequency response, ramp and turn reserve, arbitrage, etc. According to the EIA, these services still account for a significant share, but arbitrage, load management and response to excess wind and solar energy are becoming increasingly important to the power grid.
Interestingly, the EIA said that arbitrage alone was cited for over 50% of installed BESS capacity. In addition, approximately 83% (1,887 MW) of the added battery capacity in the California Independent System Operator (CAISO) service area was dedicated to arbitrage. In other words, they charge the BESS when demand is low and discharge it when demand is high. It is also an important tool when it comes to demand management and demand profile flattening. It gets a bit unclear when it comes to global drivers associated with utility-scale BESS devices.
It seems that most of the estimated forecasts are based on the entire BESS market, which is understandable considering that BESS devices cover such a wide range of applications. The research company Research and Markets published its report “Battery Energy Storage Systems – Global Market Trajectory & Analytics” a few months ago. The report states that the size of the global BESS market is expected to grow from US$4.7 billion in 2022 to about US$12.9 billion in 2026, at a compound annual growth rate (CAGR) of 26 .1% in the analysis period. Some of the major vendors are GE, Hitachi, Siemens, Tesla and others.
On the grid
Late last year, Florida Power & Light (FPL) commissioned its Manatee Energy Storage Center in Parrish, Florida. FPL names its 409MW/900MWh BESS utility-scale lithium-ion battery the world’s solar-powered battery. The BESS is charged with supplemental solar energy generated by the solar array at the 74.5 MW Manatee Solar Energy Center during the day and provides solar-generated power after sunset.
Recently, Inergex Renewable Energy Inc., an independent renewable energy producer, announced that Mitsubishi Power has been awarded a contract for two utility-scale BESS projects in the Atacama region of northern Chile. These projects will be located on two existing solar photovoltaic (PV) systems. A BESS will be installed in Inergex’s 68 MW photovoltaic plant in Salvador and has a nominal capacity of 50 MW/250 MWh. The other BESS will be installed at Inergex’s 50.6MW PV facility in San Andres and has a nominal capacity of 35MW/175MWh. These BESS projects will allow PV systems to shift solar-generated power into the hours after sunset when there is greater demand.
A few months ago, Dalian Rongke Power announced the grid connection of its 100MW/400MWh vanadium redox flow battery in Dalian, China. The second phase of the project will increase the full capacity of the battery to 200 MW/800 MWh. The utility-scale BESS will provide peak shaving and valley-filling grid support services to accommodate fluctuations in the city’s solar and wind power supply.
Southern California Edison (SCE) awarded Ameresco Inc a contract for three utility-scale BESS projects last year. The projects are located at three substations in SCE’s service area to meet power needs in the San Joaquin Valley, Rancho Cucamonga and the Long Beach area. The system corresponds to 537.5 MW/2,150 MWh. SCE’s spokesman said the three substation systems are a novel approach to integrating advanced energy storage at the distribution level. The three BESS projects are expected to be operational by the end of 2022.
Scottish and Southern Energy (SSE) announced that Wärtsilä Technical Group will provide a utility scale BESS project in Salisbury, UK. The BESS has a rated output of 50 MW/100 MWh. It will be the first to be connected directly to the transmission grid by SSE’s solar and battery division. It will support clean, reliable energy by balancing out disruptions in renewable energy and is scheduled to be operational by September 2023.
With all the features that BESS technologies offer in the utility space, it’s easy to see why they set records for installs. It also helps that there is plenty of regulatory support. Regulators worldwide are backing energy storage with new policies, directives, policies and regulations. This support is designed to strengthen the power grid and encourage the use of energy storage across the grid, and it’s working.
The versatility of utility-scale BESS devices impacts every aspect of the power supply value chain with utility-scale advantages. These BESS devices offer utilities valuable value-added services, the ability to improve renewable resource integration and support the transition from fossil-fuel power generation to zero-carbon renewable power generation.
Network operators see a more efficient balance between supply and demand, avoided system upgrades and improved reliability. It also helps that while technology has improved and evolved, costs have come down significantly. In other words, owners and operators get more bang for their buck, as the old saying goes.
The technology is readily available and constantly improving, not to mention shaking up the industry a bit. Thinking back, BESS technology started at utility scale in the form of small pilot projects to see how it would affect the grid. In just over ten years, it has become a crucial element in the envisaged modernization of the electricity grid.
There’s a lot of speculation about what energy storage will be like over the next 10 years, but you can bet there are some really cool developments on the horizon. It will be interesting to see what develops with the next generation of supply scale BESSs and it will be exciting!