SNOWMASS, Colo., Oct. 7, 2015 (GLOBE NEWSWIRE) -- Today Rocky Mountain Institute (RMI) released a new report, The Economics of Battery Energy Storage (http://www.rmi.org/electricity_battery_value), showing how customer-sited, multi-use batteries can deliver the most services and value to customers and the grid.
From the excitement surrounding the announcement of Tesla's Powerwall to storage's impressive 600% growth in U.S. installed battery capacity Q2 vs. Q1, in many ways 2015 has been the 'year of the battery.' An important driving force has been batteries' significant cost declines, with lithium-ion cell costs falling from an estimated $1,000 per kWh in 2007 to now $300 per kWh among leading manufacturers. Industry forecasts project further declines of 60% or greater. But this focus on cost crucially misses half the equation: the value batteries can generate for customers and the grid by delivering multiple services.
"Most batteries today are deployed for a single, primary purpose, such as demand charge bill reductions for commercial utility customers," explained Jesse Morris, a manager with RMI's electricity practice and a coauthor of the report. "Delivering that primary service only uses the battery 5 to 50% of the time. That's like building a hotel and only selling up to half the rooms. You're underutilizing the asset and leaving tremendous potential value on the table."
RMI's The Economics of Battery Energy Storage asks and answers several key questions to enhance batteries' economics: 1) What services can batteries deliver to the electricity grid's three main stakeholder groups (utilities, grid operators, customers)? 2) Where on the grid should batteries be deployed to deliver the most services? 3) How much value can those services create when batteries are better deployed and more fully utilized? 4) What barriers—especially regulatory—currently prevent batteries from living up to their fuller potential?
"We found that batteries can deliver up to 13 diverse services, from frequency regulation to distribution infrastructure upgrade deferral to customer bill management. And the closer that you place those batteries to the customer—ideally, behind the meter—the more of those services you're able to provide," said Garrett Fitzgerald, a senior associate in RMI's electricity practice and another coauthor of the report. "Most incredibly, we discovered that when batteries provide multiple services—rather than a single, primary service—they aren't cost-effective in the near future, dependent on continued cost declines, as many forecast; they're economic today."
However, currently many regulatory barriers prevent customer-sited batteries from simultaneously delivering services to multiple stakeholders at different levels of the grid. For customer-sited, multi-use batteries to live up to their fullest potential and contribute to a cleaner, lower-cost grid for all, regulatory reform is paramount.
About Rocky Mountain Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. In 2014, RMI merged with Carbon War Room (CWR), whose business-led market interventions advance a low-carbon economy. The combined organization has offices in Snowmass and Boulder, Colorado; New York City; Washington, D.C.; and Beijing.
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CONTACT: Nicole Arnone (303) 245-1003 x554 NArnone@rmi.orgSource:Rocky Mountain Institute