Developing a wind farm or setting up a solar plant is only half the story, with the increase in renewable energy capacity and a move away from large centralised power stations, balancing supply and demand on the grid is increasingly complex.
Supply and demand do not always match and smoothing out the supply so that spikes can be met and times of low demand do not result in wasted energy is an ongoing challenge. So it should come as no surprise that energy storage is a hot topic for grid operators, generators, investors and regulators alike.
SgurrEnergy, part of Wood Group’s clean energy business, has developed a tool to assess the technical and commercial viability of energy storage projects. The tool helps to highlight whether the revenue from providing ancillary services or time-shifting energy supply justifies investment in an energy storage system. It can be used to assess both stand-alone projects and those co-located with a generator such as a wind or solar farm.
Wind doesn’t always blow, sun doesn’t always shine
Intermittent electricity generation from renewable energy sources and variation in consumer demand poses technical issues for electrical grids. Grid capacity is typically sized to match peak output from generators which are distributed around the grid. Storage can also help ease technical constraints on the grid, such as frequency control, offsetting the need for grid reinforcement.
Costs and technical specifications have reached a point where it has become commercially viable to own and operate energy storage. The value of electricity has become increasingly variable. However, commercial viability is highly sensitive to costs, operating strategy and revenue sources targeted.
Generating power is much cheaper than storing it. Storage technology costs are falling though, and the right storage strategy can help generators unlock additional revenue.
Using this new tool our specialists can make an accurate assessment of the investment case, delivering a simple informed decision, saving time and giving customers a more robust case either way.
What’s in store?
Current interest is in Lithium-ion batteries, however, a range of batteries and other technologies are all competing to find their place in the burgeoning market.
Chris Parcell, Director of Feasibility and Development for SgurrEnergy, helped to develop the model and is excited about its potential: “Energy storage is highly complementary to renewable energy because it can smooth peaks and troughs in both generation and demand. Developers and investors are keen to understand the business case for energy storage and this tool helps to build a picture of its potential by modelling the complex range of revenue streams, grid charges and operating strategies. We expect storage costs to fall and regulation to change favourably. Our clients are already planning how and when they will deploy storage.”
Find out how SgurrEnergy can support your energy storage project by contacting firstname.lastname@example.org.