Energy companies face numerous challenges from power disruptions to environmental concerns to cost increases.
Energy storage is one of the latest means energy companies are using to address several of their top issues. By connecting large-scale battery energy storage solutions (BESS) installations to the grid, energy companies have the potential to make energy distribution more reliable, cheaper, and greener.
New battery technologies are key
Battery storage in the US is growing exponentially. According to a 2022 analysis by the McKinsey Battery Insights team, “the entire lithium-ion (Li-ion) battery chain, from mining through recycling, could grow by over 30 percent annually from 2022 to 2030, when it would reach a value of more than $400 billion and a market size of 4.7 TWh (terawatts)”.
Several recent changes to battery costs and power densities have made batteries more attractive as a large-scale solution. Also, new battery technologies, architectures, and chemistries have been developed, which offer different strengths and characteristics, so batteries function better in specific applications.
Lithium-ion batteries are the dominant battery type on the market. According to the US EIA, more than 90 percent of large-scale BESS systems in the US use lithium-ion batteries.
The world’s largest BESS is the Moss Landing Energy Storage Facility in California. It’s a 300-megawatt lithium-ion battery.
The growth of solar and wind-generated power is one of the top drivers of BESS, because solar and wind aren’t consistent sources of energy. And energy companies are planning for even more clean power development, so BESS is a great tool for helping them green their grids.
New energy storage solutions
In response to the demand for greater storage solutions, companies are developing new solutions.
In February 2023, Volvo Penta announced their power generation business would expand into battery energy storage with OEMs. Volvo Penta’s solution, a sub-system intended to be integrated into manufacturers’ BESS applications, is a modular and scalable solution that is power and energy optimized.
“As the world accelerates towards decarbonization, both electric utilities and large energy users (LEUs) face the intricate challenge of reducing carbon footprints and transitioning to cleaner and more diverse energy sources, while maintaining reliable power supply,” says Darren Tasker, Vice President, Industrial Sales, for Volvo Penta of the Americas. “Battery energy storage is increasingly in demand for a variety of applications, such as utilities, data centers, factories, decentralized microgrids, and EV charging.”
Each battery block of Volvo Penta’s solution holds up to six batteries and each battery can store up to 94kWh of energy. If you want to store 10,000kWH, then you need 18 battery blocks.
“At Volvo Penta, we recognize the pivotal role that battery energy storage plays in tackling these challenges,” says Tasker. “Together with OEMs, our solution provides possibilities to store energy from and add resiliency to uses such as renewable solar or wind-powered sources, microgrids, electric utilities and more, opening new business models that appeal to end customers on their road to net-zero emissions.”
Energy storage is reliable
According to a Fact Sheet published by the White House in November 2022, approximately 70 percent of the country's transmission lines are more than 25 years old, and lines that reach their lifespan cause energy distribution issues.
The US Energy Information Administration (US EIA) published a report the previous year that documents how many hours energy customers experienced disruptions. In 2020, electricity customers experienced more than eight hours of power disruptions that year, which was the highest amount recorded by the US EIA.
“A BESS can enhance power grid reliability, capacity, and resiliency through energy storage and delivery when demand is increased or as backup power,” says Tasker. “The solution is ideal for mission critical businesses, such as hospitals and data centers, alongside a new class of electrical “prosumers” who both produce and consume energy. All profiles can optimize their energy usage by connecting energy sources with BESS to reduce reliance on the grid and build a more resilient energy ecosystem.”
Large-scale BESS installations aid with energy demand balancing and resilience to grid failure.
With energy storage, energy companies can set up energy storage devices a closer proximity to the customer so, when there’s a disruption in one of the main lines, each energy storage device can power the buildings of customers while the energy company fixes the line.
“The Volvo Penta BESS solution is an excellent option for large-scale deployment thanks to its high-energy-density and high-power battery system with a favorable C-rate [quick-charge rate], ensuring quick and substantial charge and discharge. Our subsystem, integrated as part of an OEM’s BESS solution, can provide energy for limited periods of time while also being integrated as a complement to other generator sets, such as diesel generators.”
Cheaper energy costs
When there is a power outage, the energy company doesn’t generate revenue from their customers experiencing the outage. If energy customer experiences power outages 8 hours per day and an energy company has 1 million customers, for example, then that energy company loses 8 million hours in revenue generation.
With BESS, energy companies can continue to power properties and continue to generate revenue. With greater revenue, they can afford to cut pricing to be competitive.
And energy storage systems are agnostic to the original energy source—coal, nuclear, solar, or wind—so energy companies can use the energy mix that works for them and invest in the energy sources that make the most financial sense.
