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How energy storage systems are used

May 31, 2023

As related costs decrease and deployment options increase, more and more, energy storage systems (ESS) are becoming essential for sustainable energy production. The ability to store energy as well as supply it makes the technology suitable for multiple use cases. Understanding all the possible use cases for ESS makes that attractiveness even clearer.

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Energy Storage Systems are the Future, But Not Without Battery Analytics  

Making the Energy Transition Possible

As related costs decrease and deployment options increase, more and more, energy storage systems (ESS) are becoming essential for sustainable energy production.

With more than 100 GWh of stationary battery storage already installed worldwide, the use of ESS is expected to grow exponentially in the near future. Some forecasts have estimated that total energy storage installations around the world will reach a cumulative 1194 GWh by the end of 2030.

This remarkable expansion of ESS is set to come about largely because battery storage is so well suited for addressing the challenges of the energy transition. The ability to store energy as well as supply it makes the technology suitable for multiple use cases. And when you combine this with falling battery prices, and new legislation in the US and the EU aimed at accelerating clean energy, it’s easy to see why energy storage has become such an attractive investment.

Understanding all the possible use cases for ESS makes that attractiveness even clearer.

ESS: Use Cases, Challenges, and Solutions

Energy storage systems, also known as battery energy storage systems or BESS, are very versatile in nature and so can be adapted to a multitude of applications. As with any complex technology there are also challenges and complications involved, but as we will explain, solutions already exist for overcoming these challenges.

Before we look at that though, let's first take a look at the different ways BESS can be applied.

Different Use Cases for BESS
Grid Stability/ Frequency Regulation  

As renewables provide electricity in irregular patterns, and demand for electricity on a grid is not constant, battery storage is needed to help stabilize the grid and control frequency.

BESS are well-suited for this because they can respond quickly to frequency changes in the grid when there is an increase in energy demand or a decrease in supply. Battery energy storage systems can respond within milliseconds to provide power or absorb power from the grid, which stabilizes the frequency.

Energy storage solutions can also be used to regulate voltage on the grid. If there is a drop in voltage, the battery supply can provide additional power to raise the voltage, and if there is an overvoltage, the BESS can absorb power to lower the voltage.

By responding in real-time to changes in frequency, smoothing out variations in load, and regulating voltage, BESS have become an essential technology for integrating renewable energy sources into the grid, as well as maintaining the overall stability of the grid.

Trading

Another way BESS can be applied commercially is for energy trading. This involves leveraging the technology’s ability to store and release energy on-demand to take advantage of price fluctuations in energy markets.

Basically, energy can be purchased during off-peak periods and stored for later use, or sold when prices are high.

The kinds of services we mentioned in the previous section — such as frequency regulation or voltage support — can also be monetized and traded through participation in the energy market. This allows BESS owners to monetize their ability to provide capacity, which also provides the grid with additional resources to ensure system reliability.

Off-Grid Power Supply

Battery storage can also be used as a sustainable off-grid power supply, or as a replacement for generators, by providing reliable and sustainable power without the need for fossil fuels.

This is done by storing energy from renewable resources like solar panels or wind turbines in BESS when the energy output is higher than demand. The stored energy can then be used to provide power on-demand when the renewable energy sources are not producing sufficient energy.

Because BESS can easily be scaled up or down to meet changing energy demands, and generally require less maintenance compared to generators, they offer a flexible and cost-effective solution for off-grid power supply.

Industrial Applications (UPS and Peak Shaving)

There are multiple ways energy storage systems can be used within industry to gain a competitive advantage, and protect against unnecessary loss of revenue or productivity.

BESS can be used for uninterrupted power supply (UPS) by providing a reliable backup power source during power outages or blackouts. When grid storage is compromised, within seconds, BESS can automatically switch to battery power to provide uninterrupted power.

This fast response time ensures that critical loads such as data centers or lab equipment are not interrupted during power outages. Helping to eliminate any blackout-related revenue losses. Ensuring UPS also provides equipment protection and data integrity by protecting devices and data susceptible to damage/corruption caused by sudden power outages, voltage fluctuations, or power surges. Process control systems are also protected by UPS, as interruptions in power supply can disrupt automated processes, halt production lines, and compromise safety systems.

As well as this, as we’ve mentioned previously, energy storage systems can be charged during periods of low demand and discharged during periods of high demand. This can help to reduce electricity costs by providing power during peak demand periods when electricity prices are highest, and also by preventing excessive charges at times of extremely high consumption, for example in the morning when a factory fires up its machinery.

By reducing the need for costly backup fuel-based generators, BESS provide further cost savings while also helping to limit carbon emissions.

Microgrids

One other commercial application of BESS is that they can play a crucial role in microgrid systems by providing energy storage capabilities, and facilitating the integration of multiple energy sources.

Similar to how they can provide stability to the larger electricity grid, energy storage solutions can be used to enhance the reliability, resilience, and efficiency of microgrids by balancing supply and demand and ensuring a stable power supply.

As well as the commercial applications we’ve discussed, BESS also have some residential uses.

Residential Storage

The same way BESS can be used commercially to store excess energy from renewable sources, by providing homeowners with a way to store excess energy generated from their solar panels or wind turbines when output is higher than demand, BESS can also be used for residential storage.

This stored energy can then be used to power household appliances when the renewable energy sources are not producing enough energy. And similar to how it is done commercially, homeowners can also use their stored energy for cost savings. They can use it to avoid the need to draw power from the grid during periods with high electricity prices, and also to provide power to the grid during peak demand periods.

It’s also possible for households to use BESS to provide uninterrupted power during power outages, meaning BESS can be used to help make homes more energy-efficient, self-sufficient, and sustainable.

With such a multitude of important applications, it’s clear why the use of energy storage systems is set to grow exponentially over the next few years. As the cost of batteries continues to decline and technology advances, it is likely that BESS will become even more versatile and suitable for new applications in the future.

But as we mentioned earlier, as is the case with any complex and versatile technology, there are of course complications and challenges involved.

Complications/Challenges Involved with BESS

To operate a battery energy storage system profitably across its lifetime, there are several risks that must be mitigated, both technical and financial in nature.    

Technical Challenges
Health/ Performance

Because batteries are complex electrochemical systems, many complications can arise regarding the health and performance of BESS.  

Generally, BESS can be quite sensitive to environmental factors such as temperature, humidity, and vibration, and these factors can impact the health of the system, and so must be carefully managed and controlled to ensure optimal performance.

It goes without saying that regular maintenance and service is crucial if you want to ensure optimal performance and reliability of battery energy storage systems.

Reliability

Although battery storages are generally very reliable, sometimes components can fail. In extreme cases this can lead to system downtime, which can cause interruptions to operations, revenue loss, and decreased productivity.

Integration with other systems such as renewable energy systems, microgrids or other equipment can also impact the reliability and performance of BESS, so it’s essential that the battery storage is always carefully integrated with the wider electrical system. Communication protocols must also be established to ensure that BESS can communicate with other equipment and systems.

Lifetime

In terms of longevity, one of the primary challenges involved with BESS is battery degradation, also known as battery aging. This happens when inevitably, over time, the performance of a battery will degrade, which reduces the capacity and output power of the system.

This of course has a significant impact on the reliability, availability, and overall efficiency of the energy storage system. Unfortunately, the aging behavior of BESS is very difficult to predict because it is driven by numerous stress factors such as temperature, c-rate, and state of charge, and can vary significantly from one battery system to another.

Every battery type reacts differently to the stress factors that lead to degradation, so successfully detecting and curtailing degradation requires a deep understanding of each particular battery and situation.

Safety

Another critical consideration when using BESS for commercial applications is safety. There are many minor and major stress factors that can combine to compromise a battery’s safety, and when battery safety is compromised, it can lead to a battery fire. Something that for obvious reasons can be a devastating occurrence.

It is the case that energy storage systems will always have energy management systems in place to help keep batteries in a safe condition. But crucially, these energy management systems are not designed to detect long-term developments in the batteries, and the energy management systems are also capable of malfunctioning themselves.

This makes it absolutely vital to have a second layer of safety in place that allows for the detection of small trends and anomalies that occur in BESS. Being able to detect these trends is also useful for overcoming the financial challenges involved with energy storage systems.

Financial Challenges
Investment

For stakeholders involved in BESS projects — particularly investors — all of the technical challenges we mentioned above are of significant interest for financial reasons.

Reduced reliability, performance, and longevity of BESS all represent a financial risk. When a battery energy storage system becomes less efficient, it also becomes less profitable. And if battery downtime occurs, and interrupts crucial commercial activities that depend on uninterrupted power supply, it may lead to considerable financial losses.

Even more serious than that, if a major safety incident occurs due to a compromised battery, it can result in severe economic issues for stakeholders and significantly damage the reputation of the companies involved.

So in order to attract and maintain investment, companies using BESS need to ensure that — at an early stage — they are accurately assessing and predicting key indicators that lead to battery degradation and failure at all times. This is necessary in order to avoid performance reduction by maintaining above average degradation, and also to avoid batteries becoming compromised.

Warranty Coverage

Performance warranties are also a major concern when it comes to BESS.

Anyone looking to purchase an energy storage system will want guaranteed performance, meaning manufacturers and integrators will want to offer the best possible warranty. But it’s also crucial that the warranty they offer is accurate compared to the future performance of the battery system.

Performance warranties should usually indicate the number of cycles also called equivalent full cycles (EFC), or the overall energy throughput a battery is capable of before it reaches a specific capacity loss. But although these numbers are based on international standards, the specific BESS in question is unlikely to follow a load profile that perfectly matches these specifications.    

This means that integrators must combine multiple supplier warranties into a system warranty for their customers, and collect data, perform analyses, and communicate the performance and the warranty status to their clients.

Because such complex performance warranties inevitably come with specific operating constraints, BESS operators must also ensure that their systems are always operating within these constraints. Without a proper tool however, it is nearly impossible to automatically track the status of the guarantees that have been defined in the contract.

To make all of this possible, there needs to be a way to gain subtle and constant insights into the ongoing performance of battery systems.

And that’s where battery analytics comes in; something that can offer a solution for all the challenges we’ve just discussed.

Battery Analytics: A Solution for BESS-Related Challenges

By using battery analytics and smart algorithms, and taking into account the information they provide, it is possible to overcome any BESS-related challenges that might arise.

That’s because battery analytics provides BESS operators with reliable insights about all critical KPIs at their fingertips. This allows them to make the right decisions with regard to battery health, reliability, performance, longevity, and safety.

By consistently getting all these decisions right, it’s possible to maximize the efficiency and effectiveness of battery systems across their lifetime, and ultimately to maximize the profit generated from BESS without taking on additional risk.

Installing a cloud-based layer of battery analytics like the TWAICE platform provides allows battery operators to detect key incidents and trends, and make them available for stakeholders all around the world at any time. So any malfunctions, anomalies, or inefficiencies can be identified early, and dealt with before they become a significant problem.

Thereby making long and safe operation of battery energy storage systems not only possible, but easy. While also guaranteeing those systems consistently have both high availability and marketability.

Conclusions & Outlook

As we’ve seen, energy storage systems can be used for a multitude of applications, both commercial and residential.

In summary, they can be used:

  • To help stabilize the electricity grid and control frequency.
  • To take advantage of price fluctuations in energy markets by capturing energy during off-peak periods and selling it when prices are high.
  • As an off-grid power supply/replacement for generators.
  • To provide uninterrupted power supply and reduce energy costs for companies.
  • To enhance microgrid reliability, resilience, and efficiency.
  • And also to make homes more energy-efficient, self-sufficient, and sustainable.

With such a wide range of uses, the number of energy storage systems installed worldwide is expected to grow exponentially in the near future.

But as more BESS are installed, it’s crucial that all stakeholders involved understand the challenges and complications that can arise with battery storage. Many potential technical issues relating to the health, reliability, performance, longevity, and safety of BESS must be considered. As these issues can lead to significant financial repercussions.

Thankfully, battery analytics presents a consistent and reliable solution which gives related stakeholders the ability to not only consider these issues and complications, but to detect them early, and deal with them before they lead to something more severe.

If the impending exponential growth of energy storage systems is to be truly and consistently successful, battery analytics will be the key to that success.

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