How Energy Technology May Reduce Spend and Provide Resiliency: A Look at Battery Storage
Battery storage appears to be becoming more prevalent in the energy marketplace as energy managers explore ways to reduce their costs and provide resiliency to protect critical infrastructure.
Battery storage not only provides peace of mind during an outage, but it can also help energy managers to manage electricity costs and contribute to a business’ sustainability goals. These reasons and more explain why battery storage has grown by 200 percent year-over-year in the United States.1
What is Battery Storage?
Batteries are a technology that allow customers to store excess or cheaper energy (e.g., renewable generation like solar or wind) and deploy it later when it is needed or more economic to do so.
Battery storage can either be front-of-the-meter or behind-the-meter. Front-of the meter (FTM) storage includes large utility-scale storage facilities, often combined with renewable energy generation, that feed directly into the grid. This type of storage provides power to offsite locations and must pass through a meter before reaching an end user. FTM storage can provide grid relief when demand at its peak.2
Behind-the-meter (BTM) storage usually involves storage on a much smaller scale that is located at a customer’s facility and behind their electricity meter. It can be paired with onsite generation, such as wind turbines and solar panels, and depending on the technology, it can be dispatched at a consumer’s discretion.
In this post, we’re going to put the focus on BTM battery storage and how investment in BTM battery storage paired with renewable energy could lead to reduced overall energy spend and an increased use of clean energy.
Reducing Costs with Battery Storage
Battery storage has the potential to deliver cost savings to storage users through peak demand reduction.
“Peak demand reduction or peak shaving occurs when customers leverage battery storage to reduce demand charges from the utility,” says Dave Villa of Constellation’s Innovation and Partnerships team. “By dispatching the battery when demand on the grid is at its highest or when the customer’s own usage is at its peak, demand-based line items that appear on their energy bill can be reduced.” Learn more about the components of your energy bill here.
In addition to potentially lowering their demand components of their energy bill, customers who use storage paired with renewable energy generation may also be able to earn incentive revenue through utility programs. For example, through Massachusetts Department of Energy Resources’ incentive program, Solar Massachusetts Renewable Target (SMART), customers who combine a storage system with solar energy in three different utility regions may be eligible to receive an incentive at a fixed rate per kilowatt-hour of solar produced. 3
Via programs like these, customers may passively accrue money by hosting a battery on their site, while helping with the quality of electricity on the grid.
How Storage Promotes Resiliency, Consistent Use of Renewable Energy
When renewable energy storage is accessed for a business’ energy needs, it may reduce its dependency on grid power, which according to the Energy Information Administration (EIA) is fueled primarily by fossil fuels.4 When battery storage is deployed with onsite renewable energy, businesses are able to mitigate their business’ carbon emissions, showing their commitment to environmental stewardship to both internal and external stakeholders.
In addition, storage coupled with renewable energy allows a business to address an inevitable feature of renewable energy generation that is intermittency. Intermittency occurs when the sun is isn’t shining to power solar panels or when wind isn’t blowing to power wind turbines, for example. Storage has the ability to capture the energy and store it for a later use. By dispatching storage, businesses can remove the risk of intermittency and still rely on their renewable supply to power their facilities, rather than solely on the power grid.
Constellation offers a current battery storage solution available to energy buyers who purchase solar power. Constellation will install a battery at a customer site, while retaining ownership, operational and maintenance responsibility. Talk to your Constellation sales representative today about our solar and battery storage solution, or visit www.constellation.com/SET.
*This blog post is a part of our “Supplier to Strategist: A Blog Series on Sustainability, Efficiency and Technology” where we will provide the framework for customers on how to develop and achieve their long-term sustainability strategy and goals, and understand the innovative management products and solutions that can make a direct impact on their bottom line
Sources
- https://www.renewableenergyworld.com/storage/new-energy-storage-deployment-topped-record-3500-mwh-in-2020-esa-report-shows/
- https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Sep/IRENA_BTM_Batteries_2019.pdf?la=en&hash=86DF5CFBEDB71EB9A00A5E3680D72D6E346BD23A
- http://ag.umass.edu/sites/ag.umass.edu/files/fact-sheets/pdf/calculating_smart_incentives_for_new_residential_solar_pv.pdf
- https://www.eia.gov/tools/faqs/faq.php?id=427&t=3