Challenges Remain In Investing in Energy Storage

Everyone now understands that clean energy, such as solar and wind, has so many positives. Renewable power is now cheaper to build and operate than a conventional fossil fuel-fired plant. It is clearly cleaner for a community’s health and emits no greenhouse gases. The problem, of course, is the intermittent nature of the power. Solar produces a lot of power when the sun is out, but little or none during cloud cover or at night. Wind does great, but only when there is wind. But people, businesses, etc. need power consistently. And utilities need a reliable supply to deliver at all times. Storage of excess electricity is the solution to this problem; but storage on a utility-sized level is not simple. Energy storage is a rapidly growing sector, and prices are dropping.

A growing number of entities (businesses, cities, states) are committing to a high percent of electricity used from renewable sources. This article accounts for the many areas in the US pointing toward 100% clean energy. https://innovation.luskin.ucla.edu/wp-content/uploads/2019/11/100-Clean-Energy-Progress-Report-UCLA-2.pdf. Globally, one article predicts a 13-fold increase in new renewable power plants just between 2018 and 2024 (https://www.woodmac.com/our-expertise/focus/Power–Renewables/global-storage-q3-2019/?utm_source=gtmarticle&utm_medium=web&utm_campaign=wmpr_globalstorq319). Therefore, energy storage must play a role to meet these goals.

Global investments will be needed to upgrade the grid with enough flexibility to account for the variable power generation profiles of renewable technologies, including electricity storage. As a new industry without an affordable, reliable solution, electricity storage does not motivate investors. Questions investors ask is how will an storage project generate income? While charging or while deploying electricity or both? Each plant likely has its own interconnection issues which may affect reliability and profitability.

Another consideration for investors is that electricity storage projects, for now, have a shorter lifespan (10 to 15 years) than that of renewable power itself. How do these technologies age during the lifespan? This can be worrisome to investors.

One more concern for electricity storage investment is reaction time and reliability. If a solar or wind farm suddenly fails to generate power for any reason, can the battery project deploy power into the grid immediately (in microseconds)? And to seamlessly shift back to store excess power again?

On the other hand, there is great motivation among utilities and governments to have reliable storage solutions in place to ensure uninterrupted power to consumers in case of a natural disaster (hurricane or other damage to the grid) and may ensure or guarantee the other risks to have such systems in place.

Therefore, energy storage as an investment opportunity for those with their eyes open.

Investment in electricity storage projects continues to grow, especially when paired with renewable technologies. This summer, a major large hybrid renewable project was announced, a 700 MW facility in Oklahoma, including 250 MWs of wind, 250 MWs of solar and 800 MWh of battery storage. More such hybrid plants or storage technologies added to existing solar/wind farms are being planned.

CCES can help you determine your electricity needs and whether renewable is in your interest and how so. Contact us today at 914-584-6720 or at karell@CCESworld.com.