Energy storage 101: how energy storage works

Why Energy Storage

Energy storage is the linchpin of the clean energy transition. The more renewable energy on the grid, the better—but these resources only produce power when the sun is shining, or the wind is blowing. Energy storage can “firm up” renewable resources, maximizing their value to the grid. In addition, energy storage can reduce the cost of electricity (storing energy when it is cheapest, dispatching it when it is most expensive), and increase the reliability of our aging electric grid increasingly strained by climate change.

Why Energy Storage NOW

Historically, power on the grid has flowed in one direction (from generation to transmission to distribution to customers) but with more and more customers producing their own power, i.e., solar panels at businesses or residences, power is now flowing in multiple directions. The grid was not built for this. Nor was it built for the proliferation of extreme weather events produced by climate change.

The future of energy depends on our ability to store it. We need energy storage to accelerate the clean energy transition, reduce costs, and increase reliability for businesses, utilities, and communities.

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The Key Benefits of Energy Storage

  Maximize Renewable Energy

 Reduce Electricity Costs

 Increase Grid Reliability
 

How Energy Storage Works

Without energy storage (i.e., how the electric grid has been for the past century), electricity must be produced and consumed exactly at the same time.  When you turn on a hairdryer in your home, somewhere, an electricity generation plant is turning up just a tiny bit to keep the grid in balance. Energy storage systems allow electricity to be stored—and then discharged—at the most strategic times. Today, Lithium-ion batteries, the same batteries that are used in cell phones and electric vehicles, are the most commonly used type of energy storage. Like the batteries in your cell phone, commercial-, industrial-, and utility-scale battery energy storage systems can be charged with electricity from the grid, stored, and discharged when there is a deficit in supply or when energy is most expensive. Increasingly, battery energy storage is being paired with solar PV, which maximizes the value of solar energy to the grid (i.e., storing solar-generated electricity for when it is cloudy or after the sun sets).

Convergent’s AI-powered energy storage intelligence, PEAK IQ®, makes data-driven decisions about when and how to charge and discharge energy storage systems for optimal value creation and value stacking.

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Primary Energy Storage Technologies

• Battery Storage

  • Battery energy storage systems (BESS) are charged and discharged with electricity from the grid. Lithium-ion batteries are the dominant form of energy storage today because they hold a charge longer than other types of batteries, are less expensive, and have a smaller footprint. Batteries do not generate power; batteries

    store

    power. As a result, knowing when to charge and discharge a battery storage system is critical. In most cases, this means charging when energy is least expensive and discharging when energy is most expensive. Battery storage is an increasingly popular solution for businesses and utilities looking to reduce their energy costs and carbon footprint at the same time.

See it in action.

• Solar-Plus-Storage

  • Solar panels only generate electricity when the sun is shining. Humans, of course, do not only use electricity when the sun is out. This is why finding a way to reliably store and access those electrons (i.e. energy storage) is key to the clean energy transition. A solar-plus-storage system is a battery system that is charged by a connected solar system, such as a photovoltaic (PV) one. In other words, solar-plus-storage combines a battery energy storage system with solar PV to reduce a customer’s energy costs and carbon footprint at the same time.

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• Flywheels

  • Flywheels store energy as kinetic energy by accelerating a rotor (also known as a flywheel) to very high speeds and maintaining that energy in the form of rotational energy. Flywheels have storage capacities comparable to batteries and faster discharge rates. They are mainly used to provide load leveling or grid frequency regulation services by balancing changes between supply and demand.

See it in action.

• Pumped Hydropower

  • Hydropower, or hydroelectric power, is one of the original and most prevalent forms of renewable energy, using the natural flow of moving water to generate electricity. Pumped storage hydropower (PSH) is a form of hydroelectric energy storage that uses water reservoirs at two different elevations that can behave similarly to a giant battery. In PSH, water is pumped from the lower reservoir to the higher reservoir and generates energy when released. While a highly sustainable form of energy storage, PHS requires access to a very specific landscape, limiting its use.

The Key Applications for Energy Storage

• Coincident Peak Demand Charge Avoidance

  • PEAK IQ

    ,

    Convergent’s energy storage intelligence software, can forecast electric system peaks and discharge the system at those times, reducing electricity costs and the need for additional generation. This is also known as “peak hitting” or “peak shaving.”

    Convergent’s energy storage intelligence software, can forecast electric system peaks and discharge the system at those times, reducing electricity costs and the need for additional generation. This is also known as “peak hitting” or “peak shaving.”

• Non-Coincident Peak Demand Charge Avoidance:

  • PEAK IQ can forecast a facility’s peak usage times and dispatch an energy storage system during those hours, reducing electricity costs.

• Energy Arbitrage

  • Because electricity historically could not be stored, electricity prices are usually time-dependent – i.e., they are more expensive during times when people need it most (e.g., a hot summer afternoon) and cheapest when it’s needed least. Energy arbitrage takes advantage of “time of use” electricity pricing by charging an energy storage system when electricity is cheapest and discharging when it is most expensive.

• Solar Firming

  • Solar firming with energy storage uses the asset to “firm” or smooth any gaps that may arise between the solar energy supply and the demand due to clouds or time of day.

     

• Non-Wires-Alternative (NWA)

  • The power lines on which electricity is transported (“transmission” and “distribution” lines) are expensive to build and maintain, and incredibly difficult to site, as most people do not want new power lines near them. By increasing capacity and resiliency on the grid at the most strategic times, intelligently deployed energy storage avoids or defers the need to build out new infrastructure (wires), which is called a Non-Wires Alternative.

• Capacity

  • Energy storage provides additional local and system capacity at the most critical times.

• Ancillary Services

  • Energy storage intelligence like PEAK IQ enables an asset to provide ancillary services to the electric grid, including Frequency Regulation and Operating Reserves.

How can Energy Storage Benefit my Organization?

Energy Storage Sector Key Takeaways

• Battery storage creates a smarter, more flexible, and more reliable grid.  

• Energy storage is the linchpin of our clean energy future.

• There are multiple applications for energy storage to add value to customers and the grid today.

• Ultimately, both short- and long-duration energy storage are essential to transitioning away from fossil fuels.

• Ensuring equal treatment of battery storage from both policy and market perspectives will further accelerate the clean energy transition.

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Further Reading About Energy Storage

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What Are the Benefits of Energy Storage?

What are the benefits of energy storage?

Benefits for a Flexible Clean Energy Grid

One reason that the deployment of energy storage is accelerating is that it increases flexibility in grid operations, offers multiple services, and can be used in different applications. Storage systems can also be located in multiple segments of the electricity grid—in the transmission network, the distribution network (where electricity is delivered to consumers), the generator (for example, co-located with wind or solar), and in the case of smaller scale systems, at the commercial building or residential level.

Because some renewable energy technologies–such as wind and solar–have variable outputs, storage technologies have great potential for smoothing out the electricity supply from these sources and ensuring that the supply of generation matches the demand. If charged during periods of excess renewable generation and discharged at times of increased demand, energy storage can help maximize the use of renewable energy and ensure that less is wasted. And residential battery storage can help the utility to balance electricity customer demand with power supply to better align the more variable wind and solar supply with electricity demand.

More broadly, storage can provide electricity in response to changes or drops in electricity, provide electricity frequency and voltage regulation, and defer or avoid the need for costly investments in transmission and distribution to reduce congestion. Energy storage is also valued for its rapid response–battery storage can begin discharging power to the grid very quickly, within a fraction of a second, while conventional thermal power plants take hours to restart. This rapid response is important for ensuring the stability of the grid when unexpected increases in demand occur.

Energy storage also becomes more important the farther you are from the electrical grid. Homes in rural communities that are farther away from the transmission grid are more vulnerable to disruption than homes in large metropolitan areas. Islands and microgrids have smaller service areas that are (or can be) disconnected from the larger electrical grid. Because they may not be able to rely on the larger grid, these communities can use energy storage to avoid blackouts.

Benefits to Communities

Deployment of energy storage can increase access to and deliver benefits for low-income communities and communities historically overburdened with the impacts of pollution and climate change.

A key benefit of energy storage is its ability to provide the grid services currently fulfilled by fossil fuel peaker plants—or “peakers”— that only operate during limited times throughout the year at periods of extremely high demand for electricity, such as during a heat wave. Peaker plants are usually sited in areas of high electricity demand like urban centers—often in or near low-income communities or communities of color. Most peakers are powered by natural gas (although a few even run on coal, oil, and diesel fuel), increasing air pollution and exacerbating already poor public health impacts in these overburdened communities. Energy storage can replace existing dirty peaker plants, and it can eliminate the need to develop others in the future. Battery storage is already cheaper than gas turbines that provide this service, meaning the replacement of existing peakers will accelerate in the coming years.

Related to this, storage can help customers avoid peak pricing (price spikes) by smoothing out demand. Similar to how car rideshare services spike in prices on holidays or other times of high demand, in some places electricity gets more expensive when demand is high, such as during heat waves as more people rely on air conditioning. Energy storage can reduce high demand, and those cost savings could be passed on to customers.

Community resiliency is essential in both rural and urban settings. Energy storage can help meet peak energy demands in densely populated cities, reducing strain on the grid and minimizing spikes in electricity costs. Energy storage can help prevent outages during extreme heat or cold, helping keep people safe. Storage can be used alone or in addition to community solar or aggregated home or commercial building rooftop solar projects to create community-level microgrids or resiliency hubs. By providing localized backup power, these systems can help communities during natural disasters—for example, in meeting energy demands during floods, wildfires, and extreme weather events, all of which are becoming more frequent and intense with climate change.

By charging storage facilities with energy generated from renewable sources, we can reduce our greenhouse gas emissions, decrease our dependence on dirty fossil fuel plants contributing to pollution and negative health outcomes in communities, and even increase community resilience with solar plus storage systems.