Cost-Effective Approach to Large-Scale Electric Energy Storage

By Sam Salem, Ph.D., MBA 

The cost-effective approach to large-scale electric energy storage is to minimize the need for it.  A smart grid would constantly adjust the electricity demand, instead of only adjusting the electricity in response to unpredictable demand.

Energy storage provides the power grid with many additional services other than storing electricity. It is being used for voltage support, frequency regulation, load leveling, power quality improvement, peak shaving, spinning reserve and capacity firming. Selecting the right storage components for the purpose at hand requires a good understanding of the technology and the grid. Also, it must be able to expand modularly and be flexible enough to deal with the grid today and in the future.

In order to design an energy storage system, we need to decide on the energy storage technology, specify storage capacity, storage density, discharge time, and storage location.  One other important aspect that should be considered is how to minimize reliance on storage system using smart grid technologies.

Location of energy storage system is an important factor that affects cost. According to the NREL 2018 report on “Utility-Scale Photovoltaics Plus Energy Storage System Costs Benchmark”, co-locating the photovoltaic and storage subsystems produces cost savings by reducing costs related to site preparation, land acquisition, interconnection, installation labor and hardware. Hardware cost is reduced via sharing of switchgear, transformers, and controls.  The cost of the co-located DC-coupled system is 8% lower than the cost of the system with photovoltaics and storage sited separately, and the cost of the co-located AC-coupled system is 7% lower (2018 U.S. Utility-Scale Photovoltaics- Plus-Energy Storage System Costs Benchmark - Ran  Fu, Timothy Remo, and Robert Margolis,  National Renewable Energy Laboratory). In general, energy storage system co-located with renewable energy is used for energy shifting, provision of ancillary service, smoothing generation output, and reducing energy curtailment. Co-locating energy storage for offshore wind could reduce the need for stiffening the tower foundation design for extreme storm loads.  It also can be used to backup power for pitch and yaw systems.

For large-scale energy storage, there are already a number of technologies in existence. Each technology has its unique features. The challenge is to make them robust, reliable, and cost effective, while matching the most suitable technology to each energy source or location. For example, lithium-ion energy storage systems are well suited to help with second-to-second system balancing, renewables ramping, and providing peak power services.  However, lithium-ion energy storage systems are maxing out at around four hours. It is expected that this could go out to six or even eight hours in the future. However, the technology does suffer from diminishing returns and less favorable economics at longer durations (What is winning the global energy storage race? - Rory McCarthy, Wood Mackenzie Report, November 2019). Pumped storage hydroelectricity is a good match for wind power. The water pumped into upper reservoir will stay there for a long time making up for potentially large gaps in wind generation. However, the conventional form of pumped storage hydroelectricity requires mountains.  This limits the opportunities of building such systems. In addition, building such storage tends to be expensive. Another concept would use the pumped hydro to pump water out of a lake into the surrounding area. Letting the sea water flow back would generate the stored electricity. 


 For a downloadable copy of the January 2020 eNewsletter which includes this article, please visit the IEEE Smart Grid Resource Center.


Dr. Salem is an adjunct Assistant Professor at Clarkson University and a principal consultant at SR Salem & Associates. Prior to these roles, he worked for GE Renewable Energy in Schenectady NY as a senior technical manager and a manager of wind turbine condition monitoring team. Dr. Salem is a senior member of the IEEE. He served as the US national member at the Cigre subcommittee on Electric Machines (2006-2012). Additionally, he led the Cigre working group to writ a guide on “Economic Evaluation of Refurbishment/Replacement Decision on Generators”. Dr. Salem gave a series of talks on Wind Energy at Cigre meetings in Sydney and Paris, and at the IEEE section in Schenectady NY. Dr. Salem is a co-inventor of 22 US patents and a co-author of a number of technical papers.

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