Energy storage systems are widely used in the frequency regulation requirements of transmission and distribution terminals. More and more countries have launched incentive policies to promote the continuous increase in the proportion of renewable energy power generation, which in turn drives the steady growth of energy storage demand.
Since 2022, as the epidemic situation in European and American countries has been gradually brought under control, some governments have adopted the green economy as a policy tool for post-epidemic recovery to promote the development of renewable energy and power infrastructure, allowing the fixed energy storage market to grow against the trend. According to the data from the Industrial Technology International Strategic Development Institute, the number of new installations will more than double in 2021, and the global market size will reach approximately US$7.8 billion.
What is Energy Storage Technologies?
Energy storage is to convert electricity into other forms of energy first, store it in the energy storage device, and release it when needed. In the process of charging and discharging, the energy transfer across time is naturally realized and adjusted in the middle. There are many ways of energy storage devices, that can convert electrical energy into kinetic energy, potential energy, and chemical energy. Corresponding to different energy conversion methods, the main types of energy storage are divided into physical energy storage, electromagnetic energy storage, and electrochemical energy storage.
- Physical Energy Storage:
- Pumped-storage hydraulic energy storage: Suitable for large-scale energy storage, mature technology, medium charging and discharging speed, limited by geographical conditions. Suitable for peak shaving, daily load regulation, frequency control, and system backup.
- Compressed air energy storage: Suitable for large-scale energy storage, slow charging, and discharging, limited by geographical conditions. It is suitable for peak shaving/frequency regulation, system backup, and smoothing of renewable energy power fluctuations.
- Flywheel energy storage: Long-life, no pollution, high cost. Suitable for peak regulation, frequency control, voltage control, and uninterruptible power supply.
- Electromagnetic Energy Storage:
- Superconducting energy storage: Fast charging and discharging, requires low-temperature conditions to operate, and high cost. It is suitable for power transmission and distribution stability and suppression of vibration.
- Supercapacitor energy storage: Fast charging and discharging high cost. Suitable for frequency control and voltage control.
- Electrochemical Energy Storage:
- Lead-acid battery: Mature technology, low cost, short life, and environmental problems. Suitable for backup power, all-black start.
- Lithium battery: High energy density, life, and safety issues still need continuous improvement. It is suitable for frequency control, voltage control, backup power supply, and smoothing power fluctuation of renewable energy.
- Liquid flow battery: Long-life, deep discharge, easy combination, environmental protection, slightly lower energy density. It is suitable for backup power supply and smoothing the power fluctuation of renewable energy.
- Sodium-sulfur battery: Requires high-temperature conditions to operate, and safety issues need to be improved. It is suitable for frequency control, voltage control, backup power supply, and smoothing power fluctuation of renewable energy.
- Aluminum battery: Slightly lower energy density and higher safety. Suitable for backup power, black start, and other applications that do not require high energy density.
What is the Energy Storage, Business Models?
For Power System Operators, Energy Storage can Provide Five Ways:
- Energy storage business model 1: Energy Arbitrage
Buy electricity to fill yourself up when the price is low, and sell electricity to release your electricity when the price is high, earning the price difference in the middle. Solar power plants or other types of power plants can sell both the generated electricity and the stored electricity by building an energy storage system. This seemingly unbelievable business model of earning money at both ends can be just in the middle to make adjustments for the power grid.
- Energy storage business model 2: Spinning Reserve
Mainly in response to the unexpected increase in system load or the power gap after the replacement unit trips, the energy storage system releases its electricity when the system's power demand rises. Is the function of the energy storage system shifting, instant backup capacity, the type of energy storage system requires large capacity, less frequent charging and discharging, and less need for fast charging and discharging.
- Energy storage business model 3: Frequency Regulation
Why frequency regulation is needed, the energy storage system can quickly release its electricity and inject it into the power system to prevent the frequency from dropping, so that the frequency can be restored to an acceptable range. The energy storage system can play the function of contingency responsive.
- Energy storage business model 4: Voltage Support
The energy storage system can respond to regional voltage fluctuations and voltage dips, and quickly output virtual power into the system to boost the voltage. If the voltage of the power system is too low, it will not only increase the loss of power transmission and distribution, but also affect the stability of the system, and eventually even cause the system to collapse. Therefore, the energy storage system can provide the function of rapid blood transfusion of the power system.
- Energy storage business model 5: Black Start
When the power system encounters a force majeure factor and the entire system is paralyzed and a major blackout occurs, the energy storage can be activated immediately to release its electricity, allowing the power in small areas to gradually recover, and eventually, the entire power system will return to the normal power supply.
For Power Transmission and Distribution Companies, Energy Storage can Provide Four Ways:
- Energy storage business model 6: Resource Adequacy
It is not so easy to develop new power plants in many places. At this time, the installation of energy storage systems can be used to replace the development of new power plants, and excessive investment can be avoided because sometimes a whole new power plant is not necessarily needed to solve the problem.
- Energy storage business model 7: Transmission Congestion Relief
At present, there is no normal transmission congestion area in Taiwan, but from the perspective of resource allocation, the installation of energy storage systems can alleviate the occasional congestion problem.
- Energy storage business model 8: Transmission Deferral
It is not so easy to set up substation transmission wiring, etc., including local protests or investment amounts. Installing energy storage systems can delay these investments. When combined with an energy storage system, the off-peak load can be moderately increased, and the peak load can be lower than the system capacity limit, thereby achieving the pressure of deferred system upgrades.
- Energy storage business model 9: Distribution Deferral
Because Tai power takes care of Taiwan's electricity consumption responsibly, the application of energy storage in Taiwan's power transmission and distribution industry has not yet been seen. However, if you want to maximize the cost-effectiveness of the energy storage system, it depends on the establishment of laws and regulations. Customers can flexibly rely on the resources at hand and choose effective use at different times.
For Electricity Users, Energy Storage can Provide 4 Methods:
- Energy storage business model 10: Time-of-use Bill Management
Buy electricity to fully charge yourself during off-peak hours, when the price is low so that you can use your electricity instead of buying electricity from the power company during peak hours.
- Energy Storage Business Model 11: Demand Charge Deduction
If you set up an energy storage system, you can reduce the contract capacity and pay fewer fixed fees.
- Energy Storage Business Model 12: Increase PV Self-consumption
If you install an energy storage system, you can store it and use it when you are at home.
- Energy storage business model 13: Backup Power
For industrial users, backup power can be provided during power outages. At present, the main factor limiting the development of energy storage systems is still the high installation cost of energy storage systems. It is still difficult for a single business model to support the cost recovery of energy storage systems. If the relevant laws and regulations can be relaxed to allow the energy storage system to provide multiple services at the same time. The cost-effective goal of the energy storage system can be realized earlier.
Three Major Markets for Energy Storage in the Future:
In 2020, the cumulative installed capacity of global battery energy storage systems is 17 GW/34 GWh, and it is estimated to grow to 385 GW/1028 GWh by 2030. Among them, fixed energy storage systems will show explosive growth, attracting investment of about 262 billion US dollars. Since the U.S. government will extend the renewable energy investment tax credit (ITC) for 10 years through the Rebuilding a Better Future Act at the end of 2021. It will stimulate the construction of solar photovoltaic + energy storage power plants, and further drive the huge demand for energy storage systems. It will reach 100GW in 2030, and the United States will still occupy the leading role in the market.
China has announced that it will achieve carbon neutrality by 2060, and the installed capacity of energy storage has exceeded the GW threshold in 2020. The current government has set a target of 30 GW installed in 2025. China will become the world's second-largest market in the future. The abovementioned China and the United States alone will account for more than half of the global installations, while other major national markets include Germany, the United Kingdom, India, Australia, and Japan. From a regional perspective, by 2030, the Asia-Pacific region will lead other regions in terms of accumulative installed capacity (GW). However, energy storage facilities in the United States usually have longer energy storage hours, so the installed capacity estimated by GWh will rank first in the Americas. Ultimately, the United States, China, and Europe will together account for as much as 80% of the energy storage market in 2030.
