The Edison Electric Institute (EEI) and 32 energy companies and organizations sent a letter to leaders of the Energy Storage Association (ESA) on Wednesday to support its efforts in advancing energy storage and to highlight principles seen as critical to helping the nation achieve a cleaner, more reliable and affordable energy system.

One of the world’s biggest oil industry supermajors has teamed up with the global leader in electric cars in a new business venture and pilot project. British Petroleum (BP) has joined forces with Tesla to build the oil company’s first battery storage project at one of its U.S. wind farms. This move comes as part of a bigger foray into renewables, a strategy becoming common among supermajors trying to stay ahead of the curve in a rapidly changing energy landscape.

Wind farming is notoriously finicky when it comes to supply, and large-scale batteries like the one Tesla will be providing in the pilot project at BP’s South Dakota Titan 1 wind farm will help solve the volatility of the renewable power source. These Powerpack batteries are able to store extra power when winds are high, giving wind power a much-needed commercial edge. Tesla will be installing a 212 kilowatt (KW)/840 kilowatt hour battery (roughly 4 Powerpacks).

Titan 1 is just one of 13 wind farms that BP has installed across the U.S., amounting to a total capacity of over 2 gigawatts. In addition, the supermajor invested nearly $300 million in solar energies last year, and acquired a 43 percent stake in Lightsource, Europe’s largest solar development company. It has also been reported that BP is in negotiations with auto companies to install EV chargers at BP gas stations.

The pilot program with Tesla is just the first stage of a long learning curve to maximize the output of BP’s wind farms. The Powerpack being installed is a small one and will be an opportunity to improve battery storage technologies for future use at BP’s other wind and solar farms. For Tesla, the Powerpack is just one of many lucrative and innovative contracts the company has secured recently from their booming energy division.

Advanced battery energy storage — known as ABES — is one of the few technologies that has the potential to permanently disrupt America’s energy markets.

Although still a nascent industry — with only around 700 megawatts of capacity installed on the U.S. grid by the end of 2017 — ABES is poised to take off, thanks to rising investments in renewables and the declining costs of utility-scale batteries. Some industry experts believe America’s storage market could increase ninefold from 2017 to 2022, albeit from a low base.

In S&P Global Ratings’ view, once the economic rationales improve for batteries, ABES could upend America’s existing power model, creating ramifications for both the energy and capacity markets. The prospects for the battery industry could be further supplemented by ongoing state-level policies to decarbonize the grid. Once these factors become stronger, the power industry likely will reach a point of no return: Battery storage could become a mainstay on America’s grid, complementing the parallel developments in the renewables space.

How advanced is the technology?

Discussions with investors, sponsors and regulators all point to a similar conclusion: Advances in battery storage technologies are inevitable. It’s unclear when the industry will see meaningful change, and answering the question of where battery storage could advance may be easier. We can expect ABES capacity to be installed in areas where both the regulatory and economic rationales are most favorable — given the supplementary effect that battery storage can bring about for states with a higher proportion of renewable generation sources.

New Jersey is the latest US state to set itself targets for the deployment of energy storage, with newly passed legislature calling for 600MW of the technology within three years.

A bill, S2314/A3723, passed last week as one of three sustainability and low carbon measures for the state going forward, calls on the New Jersey Public Utilities Board to analyse the costs and potential benefits of energy storage as well as making revisions for community solar, energy efficiency, peak demand reduction and solar renewable energy certificate programmes.

Local independent system operator PJM Interconnection is famed in the energy storage world as the first local transmission organisation in the US to favour clean, fast-acting batteries to provide frequency response in a competitive market. PJM has been instructed to conduct analysis with the Public Utilities’ Board.

Six months after the creation of a report, the Utilities’ Board should “initiate a proceeding to establish a process and mechanism for achieving the goal of 600 megawatts of energy storage by 2021 and 2,000 megawatts of energy storage by 2030,” a Senate Budget and Appropriations Committee statement issued earlier this month read. The report itself must be put together one year after the passing of the bill, giving a possible 18 month lead time from this month until deployments must begin.

Required analysis

MONTPELIER, Vt., April 17, 2018 /PRNewswire/ — A report released today by the national nonprofit Clean Energy Group (CEG) sets out actions that activists and foundations can take to accelerate the clean energy transition with battery storage. The free report provides an in-depth look at 10 major areas where battery storage has begun to transform the energy system, including lowering customer electricity bills, allowing for greater clean energy equity, replacing polluting peaker plants, and supporting the buildout of electric vehicle charging infrastructure.

This new comprehensive report is titled “Jump-Start, How Activists and Foundations Can Champion Battery Storage to Recharge the Clean Energy Transition.”

The report proposes over 50 specific actions to accelerate the rate of battery storage adoption, which could facilitate greater solar deployment, reduce emissions, increase technology access to the poor, and improve the efficiency of the electric grid. The report is supported by over 250 up-to-date citations to the current literature in the field.

Clean Energy Group has been working on battery storage issues for the past five years from a non-profit perspective. During that time, CEG, which does not take any corporate contributions, has provided groups as diverse as state and federal policymakers, cities, low-income community groups, industry, environmental advocates, foundations, and investors with free information to help them understand how energy storage delivers social benefits.

The report should prompt more action and support to advance battery storage, either deployed alone or paired with renewables, to meet environmental, equity, economic development, and public safety goals.

“This is a hopeful report, but it’s also cautionary,” says report lead author and CEG President Lewis Milford. “The bottom line is this: if clean energy, environmental justice and climate activists and their funders do not develop a strategic focus on battery storage, they will miss what could be this generation’s greatest clean energy opportunity.”

I recently had an interesting conversation with a colleague about our work with microgrid engineering projects. A common theme emerged: Many of the bad experiences involved a lack of cross-discipline knowledge or, maybe, a lack of overlap with other engineers on the project.

Other engineers either didn’t know how the other components or systems in the microgrid worked together, or they just didn’t consider it.

At POWER Engineers, we work hard to facilitate cross-discipline training and experience. It became clear to us that “microgrid engineering” takes this to a new level. Microgrids present a new paradigm for power system engineers.

Being the analytical engineers we are, what did we do next? We went to the white board, of course. We mapped out in broad brush strokes the engineering disciplines of the macrogrid vs. the microgrid.  We broke down the macrogrid into:

• Generation
• Transmission
• Substation
• Distribution
• Loads

The microgrid breaks down into:

• Connection to the macrogrid (PCC – point of common coupling)
• generation sources
• Distribution circuits
• Loads

The topologies between the macrogrid and the microgrid are, of course, fundamentally different. In the macrogrid, the transmission system is highly interconnected with a diverse mix of generation. Historically, loads are fairly isolated from generation. They are separated by substations, maybe sub-transmission and a distribution system. Although microgrids topologies are highly diverse, a generator and a load might be in the same room.

In macrogrids, generating plants run relatively autonomously, held together by the collective inertia of millions of pounds of rotating mass and the electrical grid that connects it. Microgrid generation requires tightly coordinated operation controlled by a carefully engineered master control system.

A quick scan of the headlines in the industry press would suggest energy storage is busting out, as utilityscale storage systems are being built to deal with the infamous duck curve, or imbalance of power production from renewable energy. The use of storage will be part of one big happy scenario of cheap, clean power, the theory goes. Every day you can read about another municipality, state or utility that has adopted a 100 percent renewable power grid goal, and despite derailment of the Clean Power Plan, utilities have not altered their renewable objectives.

A report by research firm GTM Research and the Energy Storage Association that showed utility-scale battery storage installed capacity grew by 221 MW in 2016, or about double that of 2015. Total utility storage is 622 MW. The figures are proof of growth of long-duration batteries and an increased confidence that large energy storage will help manage peak demand, the report argued. GTM analysts predict a 10-fold revenue increase in storage system sales by 2022 to $3.3 billion.

Another report by Navigant Research released in mid-2017 predicted that the global market for distributed energy storage will reach 27.4 GW and $49 billion by 2026.

The premise is that utilities can’t have a high percentage of renewable energy in their system without some storage to have power available when the sun isn’t shining or the wind isn’t blowing. Most peak uses are early evenings and during the hottest parts of the day for air conditioning. If fossil fuel is to be taboo, storage must be part of the answer.

Considering the above, here’s our question: Why are there not more battery energy storage systems being installed? At the current rate of growth, getting from 622 MW to 27 GW in eight years appears to be an impossibility.

Most of the new storage added last year – 120 MW – was built in California, and that was required by state regulators. Storage isn’t a part of most utility resource integration plans because they have a variety of power generation sources for spinning reserves, demand side management and grid sharing arrangements.

The simple answer to our question is that storage isn’t cost-effective – yet. Storage costs are falling; therefore, it is frequently prognosticated by many – particularly storage vendors and their associations – that storage will fill the void in the grid created by intermittent output by renewable sources. But is that assumption true? When will storage become cost-effective? The answer is intertwined with the technology that will eventually win out.