Before it adjourned last year, Congress declined to act on multiple pieces of energy storage legislation including the Energy Storage Tax Incentive and Deployment Act of 2019. But across the country, states are taking the lead in advancing this innovative technology –– opening new opportunities for commercial and industrial facilities seeking to incorporate storage into their energy mix.
The state action makes sense, given the urgent need for resilient energy. Our aging grid infrastructure and the destruction caused by extreme weather and events like California’s devastating wildfires demand resilient energy solutions.
In the 2019 State of Reliability, the North American Electric Reliability Council (NERC) confirms in its first key finding that “Extreme weather events continue to be leading contributors to transmission, generation, and load loss.” These seemingly unrelenting natural events have a devastating impact on health and safety, coupled with significant financial losses experienced by affected communities and businesses. This is on top of the typical planned (maintenance) and unplanned (squirrel damage) disruptions that can impact the electric grid and daily business operations.
On normal days, a loss of household power for a few hours is not an emergency, but businesses of all sorts experience outages quite differently and can lose tens of thousands of dollars from even a short interruption. For example, average losses from an outage at a data center can be more than $9,000 a minute and the average total cost of an outage is nearly $750,000. In total, power outages lead to tens of billions in lost annual revenue and opportunities across the US economy.
These factors — coupled with precipitously declining prices for energy storage systems — are driving rapid acceleration in US installations, from small systems hanging on garage walls to data center complexes with tens of thousands of interconnected battery cells. The industry nearly doubled installations in 2018 and was on pace to double again last year.
Energy storage systems can respond instantly to the real-time state of the electric grid, which is not only valuable for resilient power supply and backup during a storm, but also can be designed to provide ancillary services to keep the grid balanced and consistent. This includes a host of technical functions like frequency response, voltage support and infrastructure deferral. These additional services can potentially cement the practicality of energy storage installations.