Evaluating Battery Storage Investments for High Penetration Solar Deployments (HPSD)

Evaluating Battery Storage Investments for High Penetration Solar Deployments (HPSD)

Variability and associated Grid Imbalance caused by Solar-PV Technologies remains a key bottleneck for High Penetration Solar Deployment (HPSD). With renewable energy investments in leading global markets expected to grow by 50% by 2020, the global demand for Battery storage is expected to follow an asymptotic pattern. BCG (Boston Consulting Group) projects annual global sales of storage technologies to grow from €6 billion by 2015 to €15 billion by 2020, and €26 billion by 2030. By region, growth stands to be particularly robust in North America, China and Japan, and Europe, where annual sales are expected to reach of €7.7 billion, €7.6 billion, and €7.2 billion respectively, by 2030. Declining (to stabilizing) Solar-PV Module & Balance of Systems (BOS) costs, coupled with increasing price of retail energy, dwindling incentives for feeding excess power generated back to the grid and government incentive for battery storage (albeit selective) are all driving battery storage demand. Careful consideration of viable storage technologies, nature of services requirement, choice of physical location, availability of controls and software to maximize asset utilization, geography specific cost/benefit nuances including break-even analysis are all critical to evaluating ROI on battery storage for any given scenario. We discuss some of these factors and provide some insights below that would aid asset owners in their decision making process.

Storage Technology: From a battery storage technology standpoint, Lithium-ion battery is expected to hold a dominant market share position. Lithium cells can store more energy (i.e. has high useable capacity) than conventional lead-acid batteries for a given footprint (Sq. Ft) besides promising a much longer service life (i.e. number of cycles). Other technologies like Sodium-Nickel Chloride, Nickel Cadmium, Sodium Sulfur, Flow batteries (enable scale up to the multiple megawatt level) are all turning out to be viable alternatives as well. Depth of discharge, useable capacity, ability to support multiple utility scale applications, footprint cost (both on per KWh and per useable kWh basis), service life , safety and fit to services requirement needs to be factored in selection of battery storage technology.

Quality & Safety: Despite the value-add of battery storage for HPSD, there have been safety concerns with battery technologies in Solar-PV installation. These concerns have led to an increasing market emphasis in getting the quality of stationary battery storage technology at parity levels with the Lithium-ion batteries used in the automotive industry. Much of the safety hazards and associated incidence of fire today have been attributed to non-compliance of safety rules – with manufacturers supposedly cutting corners in production to reduce cost. With that being said, we strongly encourage asset managers & project owners to work with battery manufacturers who have a proven track record of statutory safety compliance in battery production.

Services Requirements: The amount of storage needed depends on the nature of the grid requirements for auxiliary energy which can vary from a) Ancillary grid balancing services b) Intermittent generation smoothing 3) Meeting Peak-hour demands 4) Handling brown-out or black-out scenarios. Identifying the services required and the simultaneous need for one of more of these services at any given time is pivotal to deploying the right amount of storage. Making sure that the amount of storage deployed is optimized for the maximum use case scenario and not necessarily commissioned for theoretical maximum is critical to keeping storage cost down.

Controls & SW: Controls and associated software are critical to switch between energy sources to achieve sub-second response. In addition, the ability to continuously monitor storage assets for physical defects & functional degradation and catch safety hazards before they occur requires software & data analytics offering in your Battery storage deployment portfolio.

Deployment models: Photovoltaic electricity storage technologies can be deployed in two ways—1) As part of a solar installation or generation infrastructure or 2) Within T & D vicinity. Electric energy time-shift (arbitrage), meeting regulations, black start, transmission/distribution upgrade deferrals, transmission congestion relief, power quality and reliability support, retail energy time-shift, handling localized or system level impacts are some of the requirements that drive storage technology adoption across the deployment venues.

Cost/Benefit Analysis: The Economic benefits of services made possible by Battery Storage needs to be weighed against the cost of storage arising from fixed & variable cost driven by Capital Expenditure, Financing Cost, Operating cost, Taxes & Incentive programs. Breakeven analysis on installed cost of storage needs to be assessed to evaluate the time horizon of expected returns. As storage innovation and economies of scale push the cost of storage technology down, the cost/benefit analysis will certainly turn the tables further towards higher adoption of battery storage technologies.

POUNDRA, LLC has successfully designed and deployed SCADA and controls for Battery Storage systems for distributed power generation. Control modes supported in the off-grid implementation includes demand response, net-zero grid energy, peak shaving, and handling renewable energy variability. POUNDRA’s design implementation was optimized to 1) Smooth out load variations (Demand Response) 2) Smooth out renewable energy generation (PV/Wind variability) 3) Support efficient renewable energy utilization to provide for off-sun (night) loads with minimal grid support (net-zero grid energy), and 4) Support traditional peak-shaving application.

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