Battery Storage. Can it Benefit Your Business?
Updated: Oct 26, 2022
A Perfect Pairing
Renewable energy sources such as solar and wind are great. Except when they’re not.
Solar doesn’t produce energy when it’s dark and turbines won’t turn if the wind isn’t blowing. But, when you pair renewable energy with battery storage, energy is available whenever it’s most needed. Day or night. Rain or shine.
Battery storage plays a key role in the transition away from fossil fuels because of its role in electrifying transportation and balancing the grid. Besides the clear environmental benefits, combining battery storage with renewable energy generation is proving to reduce energy costs and improve energy reliability for businesses, communities, and utilities across the U.S. Here’s how:
1. Energy storage protects against power outages
As extreme weather events become more frequent and severe, energy supply disruptions are becoming more and more common, impacting the bottom line for companies nationwide.
Every time the grid goes down, wages, inventory, production, and sales plummet. The financial impact of power outages varies based on the type of business but, for large companies, the cost of an outage can escalate into millions of dollars per hour of downtime.
To survive in the coming years, businesses should implement an energy resilience plan as part of their overall business strategy. Since organizations that pair energy storage with renewables can maintain power and operations in the event of either planned or unplanned power outages, battery storage should be a key component of that plan.
2. Energy storage lowers overall energy costs
A solar PV system can usually produce onsite energy at a lower cost per kWh rate than the local utility. Adding energy storage increases savings by warehousing that low-cost energy and supplying energy during peak periods when rates are higher.
Peak shaving. Most commercial utility customers pay on a kilowatt-hour basis for the energy they used. Charges are based on the company’s highest usage period within a single billing cycle. Companies are billed for utilization spikes that exceed their standard number of kilowatt-hours. Peak shaving helps organizations manage overall demand, eliminating short-term demand spikes, and lowering overall costs.
Load shifting. Load shifting allows businesses to shift their energy consumption from one time period to another, by tapping the battery when energy costs are higher.
Participating in Demand Response (DR) programs: Energy storage gives customers the flexibility to reduce their site’s grid demand at critical times without changing their electricity consumption—making it easier to participate in available DR programs
Battery storage can also provide businesses with an added revenue stream from participating in local and regional programs and markets.
3. Battery Storage improves the grid
Until fairly recently, energy on the grid traveled in only one direction: from generation (coal and gas power plants) to transmission, to distribution (utility companies) to customers.
Today, more and more utility customers are using renewables to produce their own energy. Suddenly, energy is flowing in multiple directions. Unfortunately, peak generation from renewables doesn’t always align with peak demand times. As a result, utility operators struggle with periods when there is too much renewable generation going into the grid and too little load—or too little generation to meet demand.
One of the biggest benefits of energy storage is that it helps the grid to better integrate renewable energy. Energy storage systems can make renewable energy dispatchable—smoothing out the delivery of energy from renewables by storing excess energy when it's not needed, and delivering it when it is. Also, when demand changes quickly or unexpectantly, energy storage can either inject or extract electricity as needed to exactly match load.
The Downside of lithium batteries
While lithium batteries play a critical role in the transition away from fossil fuels to clean, renewable energy, it's important to note that lithium-ion batteries are not, in themselves, green technology. Here’s why:
Lithium is a finite resource
Most of the world’s lithium is extracted from the Lithium Triangle brines under the deserts of Chile, Argentina, and Bolivia. The Lithium Triangle It’s also one of the driest places on earth. That’s problematic since the extraction process of lithium requires a lot of water (approximately 500,000 gallons of water per metric ton of lithium)
Lithium-ion batteries contain cobalt, nickel, and manganese, which are toxic and can contaminate water supplies and ecosystems if they leach out of landfills.
Recycling lithium-ion batteries is problematic. Only 5% of lithium batteries are currently being recycled in the U.S. There have been a number of fires at recycling plants where lithium-ion batteries have been stored improperly or crushed.
How battery storage works
Energy storage systems include a range of technologies that can store energy at a single location. Battery energy storage systems are a subset of technologies that use chemicals to store that energy.
In simple terms, batteries receive electrical energy from either a renewable energy source or the power grid.
The batteries convert electrical energy into chemical potential energy for storage. The chemical energy is then reconverted back into electrical energy when needed.
Managing the process of charging and discharging the battery storage is critical. Generally, this involves charging when energy rates are at their lowest and discharging when rates are the highest. Battery Management Systems (BMS) are used to monitor and protect the battery, evaluate operations, and report on overall performance.
One typical system includes lithium cells (like those used in mobile phones and electric vehicles) wired in series and in parallel within a frame, creating a 'module.'
Modules can be stacked and combined to form a battery 'rack.' Battery racks can be connected in series or parallel to achieve the required voltage.
The size of a battery storage system can range from small areas inside buildings to large battery containers on rooftops or exterior spaces. (ABS offers scalable storage technologies, and designs storage systems customized for each customer’s needs and goals.)
The life expectancy of batteries is driven primarily by usage cycles. Most batteries can last anywhere between 5-15 years—meaning a replacement likely will be needed during the 20-30 year life of a commercial solar system.
Is battery storage right for your organization?
Incorporating energy storage into your business helps to ensure that energy is available whenever needed, lowers overall energy costs, and boosts your organization’s sustainability.
Alco Building Solutions will work with you to evaluate:
How and when your operation uses energy
How you’re billed for the energy you use
How energy management factors into your overall environmental and social governance strategies.
Armed with that information and insight, we can create a battery storage plan that is customized to meet your business needs and goals.