How hybrid energy storage aids corporate sustainability

The market for commercial and industrial (C&I) energy storage has experienced rapid growth as a result of numerous market developments in the past several years. Across the entire energy storage industry, decreasing prices for batteries and other system components have helped make energy storage systems an economical solution for more customers, including building owners and managers. These systems have a unique ability to provide value for both host customers and grid operators.

Traditional benefits

An important factor supporting the C&I energy storage market is that storage fits seamlessly into building energy management and energy efficiency/service contracts that many companies already have in place. It provides a non-disruptive way to reduce electricity expenses by enabling participation in demand response programs by simply switching on the storage device, as opposed to traditional demand response that requires shutting down a load in the building. Storage also can provide several hours or more of backup power for customers’ critical loads — and microgrid functionality if tied to distributed generation resources. Energy storage provides a non-disruptive way to achieve several other benefits, as listed in the table below.

But what happens when a single storage system is not enough? As C&I building needs evolve and operations become increasingly specialized, having the correct technology that can serve a range of applications will be critical to realizing total system benefits. 

In recent years, battery technology innovations have been focused on software management to maximize round-trip efficiency. While this will continue to be important, behind-the-meter customers could see greater benefits from hybrid energy storage systems. These systems can add advantages on top of what conventional battery technologies offer for C&I customers.

The case for hybrid solutions

Navigant Research defines a hybrid energy storage system as a stationary system that integrates two or more energy storage technologies with complementary operating characteristics. These systems typically have one storage device dedicated to cover high power loads, transients and fast transients, and fast load fluctuations. It is therefore characterized by a fast response time, high efficiency and high cycle lifetime. The other storage device(s) will be high energy storage with a low self-discharge rate and lower energy specific installation costs. In addition to the benefits listed above, hybrid systems offer numerous other advantages: 

  • The ability to operate under dynamic conditions and multiple use cases without compromising system health.
  • The reduction of total costs of ownership relative to a single pure-play technology due to the decoupling of energy and power.
  • An increase in total system efficiency due to operation at algorithmically optimized points, resulting in fewer thermodynamic losses.
  • An increase of storage system lifetime due to the reduction of the dynamic stress the system endures per cycle.

Hybrid systems are also valuable in relation to a company’s sustainability goals, especially when paired with distributed generation technologies.

There are two main ways these systems improve sustainability efforts for commercial customers. First is the improved efficiency of existing energy resources. Hybrid systems enhance the overall effectiveness of the existing power systems through reduced cycling and changes in output, resulting in lower emissions and lighter footprint. For applications that require storage to cover short-term power fluctuations such as renewables ramping/smoothing, a technology that is suited for high power operations leads to improved system efficiency. Conversely, using the same hybrid system for low power, long-duration applications such as backup power will not compromise its overall health.

The second way that hybrid systems can align with a company’s sustainability goals is by maximizing use of its renewable assets, offering a robust tool to help mitigate variability. Using a hybrid approach rather than pure-play storage options enables the customer to optimize the best use case (short- or long-duration business case) at any given time of day. Financing mechanisms for commercial energy storage systems are also more robust compared to other behind-the-meter systems, making them cost-effective for businesses to procure. Compounded with effective software, the optimization of all loads in a building along with renewable generation, electric vehicle charging and storage can provide substantial cost savings to customers and a reduction in overall grid peak demand.

When coupled with distributed renewables, hybrid energy storage systems can provide a diverse array of benefits. Because standalone solar PV systems only generate electricity when the sun is shining, these systems cannot provide the power services offered by other generation resources. Energy storage is a unique resource that can function as both a generation (when discharging) and a load (when charging) resource to provide customer and grid operator benefits.

Conventional energy storage technologies are built for either power-centric or energy-centric applications, and using a system under unintended use cases will compromise its lifespan. Hybrid storage systems make it possible for smaller energy storage systems to be economically viable, as they can be properly sized to offer a reasonable price for a range of performance standards on a per kilowatt basis. Furthermore, the total costs associated with permitting, engineering, interconnection and installation are often reduced for a solar-plus-storage system.

What's ahead

As distributed renewables penetration increases, utilities in some areas are already limiting the opportunity for solar to export. Storage is a key solution to this challenge because it can reduce or eliminate the export of solar PV. For C&I building managers, it is likely that storage or some type of non-export contract eventually will be required in most markets for new solar PV in the future.

Building owners are increasingly migrating to managing all aspects of their business in real time, including their energy systems. The future of the industry will be centered around automation and advanced building management capabilities. The C&I building sector is uniquely positioned to improve overall energy efficiency on the demand side as well as provide grid services at no carbon cost on the supply side. Ensuring that these buildings are equipped with advanced energy technologies will allow for companies to become more profitable over their lifetime while being conscientious stewards of the environment.

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