The North American electricity sector is making significant progress toward decarbonizing its power supply as solar and wind become major contributors. However, electric grid operators are increasingly challenged by the intermittent nature of these renewable energy sources. These supply-demand imbalances affect grid reliability and cause volatile electricity prices. Large-scale battery energy storage is widely viewed as a key to solving these challenges.
The U.S. Energy Information Administration expects the deployment of 10 gigawatts of grid storage in the U.S. between 2021 and 2023 — 10 times the storage capacity in 2019. Despite the optimism, there’s great uncertainty about how storage will affect the grid. To continue providing reliable, affordable electric service, utilities and other power providers need robust electricity market data to understand many aspects of storage systems, such as their ability to balance the grid and their maintenance costs. This information can also be used to identify current and emerging opportunities.
Informing the Most Effective Operational Strategies
As we progress toward large-scale battery energy storage, many storage operators currently provide the grid with ancillary services, which involve timing the charging and discharging of batteries to balance energy supply and demand, regulate frequency and voltage and stabilize the grid. They can sell these services to the grid operator through ancillary service markets. Utilities and other companies operating storage facilities are likely to explore additional operational strategies beyond ancillary services.
“Because so many batteries are coming online, the ancillary services markets are going to get saturated over the next several years and the prices paid for those services will likely decrease in certain markets,” said Cliff Rose, a product manager at Yes Energy, a leading energy market data provider. “Battery operators will need to find new strategies.”
Issues under consideration include:
- anticipating market dynamics in order to inform buy and sell decisions
- hiring power traders experienced with these types of decisions
- using data to feed algorithms that make automated, near real-time trading decisions
- deciding where to site storage facilities
- dispatching batteries in real-time and day-ahead energy markets
- helping grid operators coordinate capacity markets to procure enough energy resources to meet future demand.
All of the above require granular data, such as congestion trends, renewable energy forecasts and real-time, location-specific prices. As experts in presenting comprehensive electricity market data and putting key market indicators in context to inform good decisions, Yes Energy is well-positioned to help utilities, developers and other market participants navigate shifting grid dynamics driven by large-scale storage deployment.