types of plants with high energy density. Like solar, we also fnd that the per-unit costs are signifcantly lower at the utility scale. So when you factor in
the three key attributes of functional usage of energy storage, risk management, and cost of deployment, utility scale projects enjoy the most beneft.
Energy storage will have the greatest impact on the util-
ity sector. First storage will transform how utilities man-
age frequency regulation and ancillary services on the
grid. This will improve stability of our transmission sys-
tem and it will fundamentally shift how power generators
manage their generation portfolio. Instantaneously deploy-
able stored power will reduce utilities’ reliance on spinning
reserve and allow much of the ineffcient and environmen-
tally questionable non-spinning reserve to retire. Second,
it will signifcantly change the grid’s carbon footprint and
stabilize the price of electricity. By eliminating the need to
curtail generation from resources like wind and solar, and eliminating fre-
quency issues from intermittency, storage removes the main obstacles to
expanded renewable generation. Since LMP is tied to the marginal-cost dis-
patch model, RE generation will shift the supply curve to the right, stabilizing
the cost of energy and ensuring long-term energy security.
Similar to digital data storage, which supports a variety of
tasks from web streaming on smartphones to enterprise
computing in large data centers, energy storage will have a
signifcant impact across the entire electric grid.
As a recognized alternative to traditional infrastructure
investments (i.e, peaking power plants, transmission lines,
distribution network upgrades), progressive utilities and
utility commissions agree that energy storage can compete against these other investments without subsidies.
And as more planning processes are allowing companies
to offer both in-front-of and behind-the-meter solutions, I
Residential energy storage will likely be the last segment to develop. To be
a viable market, utility rates will have to include demand charge and time
VP, AES Energy