Energy storage is a key part of capturing and discharging energy. There are different types and sizes of energy storage technologies. Battery storage in particular is set for significant growth in coming years and will be an important part of the clean energy transition. As the energy sector evolves and adds more power generated by renewables, understanding battery energy storage systems and how they work can help us see how significant it will be to the future of flexible clean power supply.
What are Battery Energy Storage Systems? (BESS)
Battery energy storage systems are a type of energy storage that uses a group of batteries to store electrical energy.
Energy storage is the capture of energy when it is produced. This energy is then later used at a time when it is needed. Energy storage can reduce imbalances between energy supply and demand without increasing production. There are several types of energy storage technologies, each with different use cases. The most promising energy storage technology for scaling-up renewable energy is batteries.
As we retire fossil fuels, increasing energy storage capacity for variable renewable energy generation assets becomes more important. This is because most renewable energy sources, unlike fossil fuels, can’t increase production to match demand. It’s not possible to increase sunlight hours or increase wind generation to meet surges in demand for energy.
But battery storage makes it possible to capture renewable energy when it is produced and dispatch it when it is needed at a later time. This is the backbone that will support decarbonised, on-demand energy supply.
Types of battery energy storage systems
It’s important to make a distinction between the different types of battery storage. There are various types of battery energy storage systems (BESS) that can be used, and they each have different costs and benefits associated with them. The cost and use cases of each type of battery storage is assessed in terms of where they are located, how they are managed, their power capacity (which is measured in kilowatts) and their energy capacity (which is measured in kilowatt-hours). Different types of batteries can store different amounts of energy for varying durations of time before it must be discharged.
There are few main types of BESS. Examples of these include:
Grid-scale battery storage is a technology that enables utilities and power system operators to store large amounts of energy for later use. They are also sometimes referred to as in front-of-the-meter battery storage systems (FTM) or utility-scale batteries. FTM grid-scale batteries are directly connected to the distribution network. This is important when it comes to demand response programmes and energy flexibility schemes.
Behind the meter batteries (BTM Batteries)
Behind-the-meter (BTM) BESS are smaller in their energy storage capacity than grid-scale batteries. They are stationary batteries that are installed on the customer’s site and are connected to the distribution system on the customer’s side of the utility’s service meter. This means they are not centrally controlled by the distribution network. BTM batteries are usually connected to energy consuming appliances like machinery, fans, pumps or combined heat and power (CHP) assets.
Co-located batteries are a combination of a battery storage system and another energy generating asset – which is typically solar. Renewable energy investors are often interested in co-located battery systems as they can be easily installed alongside existing energy projects.
How do battery energy storage systems work?
Battery energy storage systems will enable the clean energy transition – but how do they work?
The current global market for grid-scale battery storage is dominated by lithium-ion batteries. Technological innovations and improved manufacturing capacity have caused lithium-ion batteries to become more efficient at storing more energy in a smaller battery, while costs sharply decline. Prices are projected to fall even further, making them even more cost-effective — especially when deployed at scale.
BESS are charged when they capture electrical energy from the grid, or a power plant, and store it, until it is dispatched and used at a later time. By charging the BESS with low-cost energy generated during periods of high renewable generation, and dispatching during periods of high demand, BESS can both reduce wholesale energy costs, and help decarbonise the power network.
The falling costs of batteries, combined with the fast and modular deployment of battery storage technology, make them the most attractive energy storage solution in many cases. Industry bodies including the IEA estimate that hundreds of gigawatts of global battery storage deployment will be necessary in the near-term future.
These same factors have also boosted the attractiveness of grid-scale BESS to reduce the imbalance between energy demand and energy supply for utilities.
The Benefits of BESS
BESS are critical to address the variability of renewables, especially as the global energy mix includes more wind and solar PV to reach Net Zero Emissions by 2050.
As more renewable energy supply is added to the grid, BESS becomes more important. This is because renewables like solar PV and wind power cannot be dispatched on demand.
Without energy storage, the energy they produce has to be used at the time it is generated. This is a barrier to flexible energy supply. With increased energy storage, more renewable power can be added to the grid and stored for use when it is needed. Because of this, grid-scale batteries have the potential to increase significantly. In baseline scenarios, energy storage is estimated to reach at least five times today’s capacity by 2050.
Battery storage can enhance power system flexibility and enable high levels of renewable energy integration. For renewable energy developers, the biggest benefits of grid-scale batteries are unlocked by participating in balancing markets.
Renewable energy generators and suppliers can offer energy balancing services into the balancing market. The electricity transmission service operators then determine how these services can best be used. They might, for example, tell a generator to increase its output to meet demand. The generator is then paid through the balancing market for the extra energy used to balance the grid.
Energy generation asset developers can access balancing schemes through BESS, and receive payments for enabling flexible load for the grid operator, who is able to include more renewable energy into the mix. It’s a win-win situation.
How can BESS Help the Energy Transition?
It’s clear that more renewable energy is needed to support the energy transition.
Historically, when demand for energy increased, fossil fuel energy producers, for example coal-fired power plants, burned more coal to meet that rising demand. This was how the grid handled the imbalance in supply and demand.
But renewable energy assets are variable. This means they produce abundant energy at certain times and very little – or no energy – at other times. BESS helps to balance the grid by capturing energy when it is produced cheaply by renewables, and releasing it when demand for energy is high at a later time.
Meeting rising flexibility needs while decarbonising electricity generation is a key challenge for the power sector, so all sources of flexibility, including power plants, grids, demand response and battery energy storage need to be tapped.
Generally, BESS can be deployed quickly and increased modularly when and where it is needed. But a key thing to remember is that demand for BESS is considered alongside other measures that can be used to meet flexible energy supply. Examples of these other measures include demand response and smart-grids that enhance electricity networks, and boost overall flexibility. In many cases, measures like demand response and energy storage can work together to achieve even greater flexibility in a grid powered by mostly renewable energy.
Overall, flexibility is and will continue to be a crucial building block of the energy transition that’s aimed towards a fully renewable energy system. Battery storage can enhance power system flexibility and enable high levels of renewable energy integration.
Energy storage is an emerging sector and there are many promising types of technologies that can store renewable power. But the near-term future looks set to be dominated by battery energy storage systems. Although, innovation and falling costs could mean that new and different forms of energy storage are predominantly used as the sector evolves. In any scenario, it is likely that BESS will be a key part of the global clean energy future.
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