Energy Storage Options Growing to Support Microgrids

Energy storage is becoming an essential enabling technology for all types of microgrids.
Published: Mon 02 Jun 2014

The next decade will see energy storage opportunities continue to grow, along with the microgrid market, according to Navigant Research.

This is certainly not suprising since the microgrid market is seeing significant growth. The market is expected to grow from US$10-bn to US$40-bn in estimated revenue by 2020. Successful pilot programs, lower prices for solar photovoltaic systems, and fewer regulations against distributed energy have helped to promote the microgrid. (Engerati:Microgrids-More Than Just a Back-Up Plan].

The microgrid is being viewed as a major disruptive feature in the power industry as many are no longer viewing it as a mere back up plan during emergency situations-it is now being viewed as much more than that. The microgrid is seen as an even greater investment if it can provide a diversity of quality services that perhaps utilities may not be able to compete with. It therefore makes sense that energy storage markets are growing to accommodate the emerging microgrid market.

Drivers for growth

Research points to the following main drivers for this growth:

  • diesel fuel prices

  • a greater push toward renewable resources in microgrids

  • ancillary service market reforms

Energy storage systems deliver resource optimization (fuel, photovoltaic, and wind), resource integration (photovoltaic, wind), stability (frequency, voltage), and load management services to microgrids as well as the traditional grid.

Enabling technology

Delivering services to microgrids -- and, in the case of grid-tied systems, to the centralized grid -- energy storage is becoming an essential enabling technology for all types of microgrids, according to Navigant’s research, and can decrease the payback period of the microgrid by enabling an increase in the penetration of renewable energy sources or by reducing diesel fuel consumption.

The strongest market for energy storage for microgrids will be the US grid-tied customer-owned microgrid segment, which is supported by robust growth in microgrids and favorable regulatory developments, according to Navigant.

"Rapid expansion of the microgrid market over the next 10 years will drive increased demand for energy storage associated with these systems," said Anissa Dehamna, senior research analyst with Navigant Research. "Energy storage systems can also allow participation in deregulated ancillary service markets, further improving the economics of the overall system."

Further reading

US Department of Energy-Grid Energy Storage [pdf]