Battery Storage: A Paradigm Shift for the Energy Industry

April 9, 2019

Sustainability defines the modern national conversation about energy in the United States. Reports from top scientists and intelligence agencies continue to reflect a growing consensus that strides towards efficient, sustainable energy sources are necessary to combat potentially astronomical economic and societal costs caused by the effects of climate change. While we continue to debate the best methods to achieve such goals, we must acknowledge a relatively new development in the industry.

Energy storage, as an industry, is relatively new. Certainly, battery powered technology is common-place, present in every laptop, tablet, and cell phone. But utility-scale energy storage is still in its infancy. In 2018, the U.S. energy storage industry delivered record deployments, largely in its fourth-quarter. However, experts speculate that the industry may very well double this year, and triple in 2020.

Much of the increase in battery storage research comes from the electric vehicle industry. With more EVs on the road than ever, and people more cognizant of their contributions to carbon emissions, it’s unsurprising that the industry strives to make better batteries with longer usage times and fewer charging periods. Rapid-charge high-storage batteries are vital, especially in the U.S. if we ever expect to see the widescale adoption of fully electric vehicles. The average American commutes nearly a half hour daily according to the US census, and over 14 million people spend over an hour driving to work. American cities are designed, largely, with vehicle transport in mind, with walkability being only a relatively recent design concept in modern day urban planning.

California and PJM currently make up the largest markets for cumulative installed storage capacity (which makes sense, as those territories have pursued an ambitious renewable standard), but they do not stand alone in the nation. In 2018, projects were launched in Hawaii, Texas, Minnesota, and Colorado. Maryland, most recently, has introduced a bill that will scale their renewable portfolio standard from 25% by 2020 to 50% by 2030 and studying the feasibility of mandating 100% by 2040. If enacted, Maryland could, similarly, begin pursuing utility-scale battery technology.

Renewables play a particularly important role in battery storage for a simple reason: their variability. There is large scientific consensus that renewable energy sources are critical to the health of the planet and to the sustainability of our entire economy, but concerns have been raised over the simple fact that the sun isn’t always shining and wind isn’t always blowing. Battery storage is the missing piece of the puzzle; when the sun is shining and the wind is blowing, the excess power being generated will not be lost or wasted, but simply stored in a battery for later use. Likewise, during times of darkness or windless days, batteries can discharge that stored energy to the grid.

The U.S. currently has about 23 gigawatts of storage capacity, which is about the capacity of 38 coal plants. 96% of this capacity comes from hydroelectric plants, which we’ve used for decades in a similar fashion to battery storage; to absorb excess capacity and return it to the grid during periods of demand. While one may speculate that the U.S. grid, with so much storage, may not need additional capacity, it’s important to note that wind, solar, and other renewables are more than likely to increase in the future. As these renewables come online, our expansion of storage capacity will need to grow with it.

Hand-in-hand with battery storage is the burgeoning market for installation of artificial intelligence (AI) to operate distributed energy assets. Using machine learning and big data to forecast moments of peak demand, there exists a very real possibility that AI platforms will help us to become more efficient and reduce greenhouse gas emissions from electricity use, as well as long-term economic savings. The mechanics behind AI-managed energy distribution is simple; during times of low peak demand, the AI would distribute power from the grid. However, utilizing machine learning, the AI would essentially predict times of peak demand to switch toward battery storage, renewables, and less grid-intensive sources of energy.

AI software can process data far faster than a human operator, allowing for responsive decision-making in an instant. By limiting strain on the grid during peak demand hours, end-users enjoy the benefit of lower capacity costs and thus lower prices. Though this technology is relatively new, it’s quite likely that AI-managed storage systems could be valuable for users, the environment, and the economy. A rare “win-win-win”.

APPI Energy has existed since the dawn of energy deregulation in the United States, at that time also a new and unfamiliar market. Through the 23 years of our operation, we’ve seen many innovations and circumstances that have come to define aspects of the energy market. We recognize that, as this market grows, the technology behind it must, similarly grow.

For more information about the energy market, its developments, and how APPI Energy can help you make informed decisions about energy procurement, please contact us via our website or directly at 800-520-6685.