In-Home Storage: The Virtual Power Plant

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Rapid Growth

Solar and wind are considered the most popular renewable resources across the world, but due to their intermittent and unpredictable nature, utilities are still relying on natural gas and coal. However, when renewable technologies are combined with energy storage they smooth out load fluctuations and have the potential to significantly impact the generation mix.
Total energy storage deployment has increased dramatically in the past few years because of low-carbon, clean energy policies, and is anticipated to grow even more in the near-term. By 2022, GTM Research expects the U.S. energy storage market to reach 2.5 GW annually, with residential opportunities contributing around 800 MW.

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Source: GTM Research

How Does It Work?

Energy storage works as a three-step process that consists of extracting power from the grid, solar panels, or wind turbines, storing it (charging phase) during the off-peak period when power prices are lower, and returning it (discharging period) at a later stage during the on-peak period when the prices are much higher.

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For electric vehicles (EV), most of the charging happens at night and during weekends, when the prices are comparatively lower, and vehicles are not used that much. As EVs continue to enter the mainstream market, they would increase the off-peak prices and contribute to load shifting.
Energy storage devices and EVs can complement each other or they may be competitive. But energy storage is the key element for EV charging during on-peak hours.

Different Market Players

Residential energy storage has been a holy grail for companies like Tesla, Panasonic, LG, Sunverge Energy, and Orison with lithium ion (Li-ion) batteries as the leading technology type. Now with plug-in electric and hybrid vehicles on the rise, automobile companies Tesla, Nissan, Mercedes Benz, BMW, Renault and Audi have also joined the residential market to integrate EV charging stations, battery storage and rooftop solar that in essence has a residence operating as a virtual power plant.
Beginning in December of last year, Arizona Public Service Company deployed Sunverge Energy’s energy storage hardware coupled with advanced, intelligent energy management systems that predict future load requirements and solar generation. Additionally, Tesla is enjoying significant market share, shown recently by Vermont-based Green Mountain Power’s launch of a comprehensive solution to reduce customer electricity bills using Tesla’s cutting edge Powerwall 2 and GridLogic software.
A few other utility companies, especially in Florida and California, are also exploring residential energy storage programs, as shown in the figure below.

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Source: Hawaii PUC; General Assembly of Maryland

So, what are some other current thoughts about the pros and cons of in-home energy storage?

Advantages
Drawbacks
  • Energy storage reduces load fluctuations by providing localized ramping services for PV and ensuring constant, combined output (PV plus storage).
  • Improves demand response and reduces the peak demand.
  • Extra savings for customers through net metering systems and end-user bill management.
  • Reduces reliance on the grid; the customer can generate and store the energy during severe outages also.
  • Disposal of Li-ion batteries is not easy, and they are difficult to recycle
  • Automakers, like Nissan and BMW, are implementing second-life batteries, thereby reducing the durability and reliability of the product.

 

Concluding Thoughts

Clearly, a wider acceptance of energy storage resources would be a game changer in the U.S. power sector. Utilities, consumers, and automakers are profiting from this exponential growth of energy storage. With an increasing number of companies using artificial intelligence and machine learning algorithms for energy management systems, the synergy with energy storage creates a perfect, smart, personal power plant which has tremendous potential to change the landscape of the energy industry.

Filed under: Clean Power Plan, Hydro Power, Power Grid, Power Market Insights, Power Storage, Renewable Portfolio Standards, Renewable Power, Solar Power, UncategorizedTagged with: , , , , , , , , , , , , , , , , ,

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