Energy storage power station investment requirements for owners

Do investors underestimate the value of energy storage?

While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.

How can electricity storage support renewable energy integration?

When connected at the distribution level, electricity storage can provide power quality and reliability services at the local substation, defer distribution capacity investment, and support integration of distributed renewable energy.

Who can own a standalone electricity storage system?

In standalone operation, a storage unit could be owned by a utility (in regulated environments) or operate independently under a specific market setting. The system-level analysis as proposed in the ESVF can be used to study standalone electricity storage systems.

Could electricity storage increase the capacity factor of cheap coal power plants?

At low levels of variable renewable energy (VRE), electricity storage providing energy arbitrage could be contributing to increasing the capacity factor of cheap coal power plants and their energy share in the mix, as their lack of flexibility is compensated by storage flexibility.

How long can electricity be stored in a pumped hydro power plant?

Pumped hydro can be used for load following and time-shift of energy (energy arbitrage) from minutes to hours.

What should utilities consider when procuring energy storage?

Utilities should update procurement processes for the performance or services required, as opposed to technology-specific requirements when procuring energy storage. Other recommendations include having updated and expanded modelling of storage in integrated resource plans, and exploring new ownership models for electricity storage (ESA, 2017).