Energy on demand

Microgrids can fulfill energy needs reliably and sustainably

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As the cost of sustainable energy sources has declined, the deployment of these sources of energy has grown rapidly. Once on the fringes of the energy industry, solar PV and wind are now mainstream technologies. The International Renewable Energy Agency predicts another 90 GW of solar power to come online in the next few years, which could drive down solar costs by an additional 60%.

However, despite rapidly expanding adoption and support for renewables there remains one major barrier to a greater role across grid operations—the ability to store that energy for use on demand. Although rapid gains have been made in the maturity of storage technology, it is still in the early stages and utilities are cultivating a growing interest. More than half of U.S. respondents to Black & Veatch’s Strategic Directions: Electric Industry Report (56%) view the use of energy storage to increase solar PV as “very important” or “important”.

Today, large vertically integrated electricity service providers are exploring how to embrace storage along with utility-scale and traditional rooftop PV applications. More than a quarter of respondents (27%) are either running or developing an energy storage pilot programme, almost half (45%) have it on their technology roadmap, and 28% are not planning for energy storage at this time.

While still expensive, energy storage is declining in cost rapidly. Lithium-ion is the current dominant technology and is seeing cost declines similar to what the industry experienced with solar PV over the past decade. Lithium-ion batteries used on the power grid are the same as those in electric vehicles. As the electric vehicle market has grown, the scale-up of battery manufacturing capacity to support that market has support cost declines and innovation in the use of battery energy storage on the power grid.

According to global research organisation, GTM Research, energy storage adoption in the U.S. has experienced dramatic growth since 2012 and is expected to reach 2.5 GW by 2022, 11 times the size of the market in 2016, which totalled 231 MW. Furthermore, the energy storage market in the U.S. is expected to grow ninefold from 2016 to $3.1 billion in 2022. Revenues from energy storage in 2017 are expected to grow by 43% over 2016, with a cumulative market revenue between 2017 and 2022 to reach $10.4 billion.

Battery producers like Tesla, Samsung SDI, Panasonic, BYD, LG Chem and more are ramping up capacity to address rising demand from electric vehicle production, as well as residential, commercial and increasingly, utility-scale storage applications.

Changing the electricity landscape

Distributed energy resources, such as microgrids, are driving change within the electric industry worldwide as both energy consumers and electric service providers are diversifying how power is generated and delivered. Spurred on by the public embrace of clean energy, falling prices and regulatory subsidies; solar photovoltaics, battery energy storage and microgrids are being deployed in more places across the electric system.

This movement is requiring utilities across the globe to transform their traditional centralised networks into flexible, distributed and integrated power networks that are evolving from demonstration and pilot phases to solid, longer-term investments that play an important part in evolving new business models.

As many of these efforts move forward, organisations are working through project complexities to achieve the most economical design and implementation for its distributed energy and microgrid customers, while at the same time seeking to maximise benefit from existing grid investments.

Webb Meko, Business Development Director, Sub-Saharan Africa,Black & Veatch

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