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CERAWeek: US battery storage could be a game changer in coming years

Houston — A "tsunami" of battery storage is set to sweep across the US in the coming years, a developer said Thursday during CERAWeek by IHS Markit in Houston.

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As costs come down and the market discovers an enthusiasm for storage, the capacity factor will jump because storage can offer the ability to make better use of energy sources, James Hughes, Prisma Energy Capital CEO and managing director, said during the panel discussion Battery Storage for the Grid: Climbing the growth curve.

With 1,200 MW of storage counted in 2018 and another 1,200 MW in projects alone planned this year, "it gives you a sense of how quickly things are changing and how this industry is growing," said Sam Huntington, IHS Markit senior research analyst and session chair, adding that the challenge is finding the role of batteries within the power sector.

As a new technology, battery storage is a "new tool in the tool box," said Roger Kranburg, Eversource Energy vice president of energy strategy and policy.

However, battery storage is a little different than other assets, Hughes said.

"These assets are not like anything we've had before," he said. "They're able to serve multiple applications."

The question out there is how to deal with that, as it wil take time for all the regulatory bodies to get up to speed, Hughes said.

During a later session, FERC Chairman Neil Chatterjee also commented on the role of storage in the power sector, saying "storage is a game changer."

The West is bursting with projects and there is a need to address the "duck curve" as solar generation floods the market during the day and then drops at night. The duck curve situation is now starting to be seen in the Electric Reliability Council of Texas. A duck curve is a graph of daily power output that plots the imbalance between peak demand and production, resulting in a curve that resembles the outline of a duck.

Many see battery storage playing a role to serve peak electricity demand in the evening, when solar drops off, but demand remains high.

During the "belly of the duck," as Kiran Kumaraswamy, Fluence vice president of market applications, called it, there is too much solar during peak sunlight hours and the grid cannot use it all. By putting that excess power into storage to be used after the sun sets but peak demand remains high, storage can fill that need, especially as storage is the only resource that can be turned on without any ramp period. Even fast start turbine units require a 15-20 minute ramp.

"In our view, storage is the best resource to call on to fill that gap," Kumaraswamy said.

Going forward, Hughes said any generation construction west of the Mississippi River will include storage.

"If you don't even have storage in the framework, you're falling behind," Hughes said.

However, "the biggest unknown is how the markets will react when these assets enter the market," Hughes said. "We're not going to know until we get more of these assets into the market and the market reacts."

-- Kassia Micek, kassia.micek@spglobal.com

-- Edited by Jennifer Pedrick, newsdesk@spglobal.com