Battery Energy Storage is in the news, all over renewable energy commentary sites, and on the minds of investors the world over (not to mention sitting in both the U.S. House and Senate in the form of sibling Energy Storage Acts).
Growth of energy storage technologies and their applications is at an all-time high, but why? Some of the same reasons why we think this just may be the year the Energy Storage Act passes are also clear drivers of storage industry growth. But another important factor to consider is Renewable Portfolio Standard (RPS), the more and more broadly adopted state-by-state mandate that a portion of electricity demand be met through renewable sources; growth is seen not only in the number of states who are adopting an RPS, but also seen in increasing percentages required within states who have had a RPS in place, some for many years (California, always a leading example, has had an RPS in place since 2002 and recently raised their standard from 20% to 33% to be met by 2030).
Currently, there are 32 U.S. states with RPS, a number that has grown steadily since the first RPS was introduced in 1983, with a major jump in adoption and percentage requirements in 2000. Current RPS states have mandates for renewable energy levels that range from 8% to 40% with goals to meet these mandates ranging from 2013 to 2030. The majority have legislated mandates in the range of 20% and many aim to hit that goal by 2020. Since all RPS mandates are based on future goals, even if there are no further RPS adoption or percentage increases, the supply of renewable energy is legislated to keep growing.
As electricity demand continues to grow across the fifty states, obviously that will demand an even greater growth in renewable supply to meet RPS standards based on percentages. While few will argue that more renewable energy needs to be brought online to meet these and larger growing energy needs, an important component to support this growth is and will more increasingly prove be energy storage for renewable energy.
In addition to increasing renewable energy capacity, by making more of the current production usable through battery storage and other complimentary technologies, we can meet our expanding needs more efficiently and with less new development, relatively speaking. This is because energy storage, such as Lithium-Ion battery storage, makes it possible to use energy generated in off-peak hours during times of high-peak demand, resulting in less lost energy from renewable sources (such as extra, i.e. unused, energy produced by wind farms on above-average windy days, and similarly by solar arrays on sunny days when demand is lower than at night). Implementing energy storage solutions is generally less costly than developing new energy production, so this will save both utilities and consumers money; a compelling reason for the former to consider it closely in light of growing RPS requirements and related electricity needs.
This answer is not a new one. Energy is either kinetic or potential, and utilities have been utilizing ways of storing energy (basically, converting it from kinetic to potential for the future reverse) for a long time to reduce waste and meet peak demand, RPS or no. One example is pumping water to elevated reservoirs during times of low demand (and thus excess energy) to let it later drop through turbine generators during times of high demand (aka pumped-storage hydroelectricity, or PSH). Of course, batteries are simply another kind of reservoir, albeit very efficient and increasingly high tech, that stores energy in chemical form for later application.
Today, however, there is an ever-widening availability of energy storage technologies suitable for grid-scale all the way down to single-family-home-scale implementation, and with pricing becoming rapidly more and more accessible throughout this range. Advanced Li-Ion batteries are of the most widely utilized and due to recent technological and financially beneficial advancements, battery energy storage is now feasible, reliable and scalable.
We are sure to see tandem growth in RPS rates and energy storage technology utilization as the former begets the need for the latter and the latter makes the former more feasible; while legislation, budgetary considerations, and advancements in technologies contribute to storage industry growth.