Mottcell New Energy Research: Half of battery storage projects deployed in 2022 will be used for energy transfer

Half of the battery storage projects deployed in 2022 are expected to be used for "energy transfer" services by installed capacity, rising to two-thirds in the next few years, according to Mottcell New Energy's survey. In this service, large battery energy storage systems are used to temporarily store electricity generated by renewable energy generation facilities for sale when electricity prices are high, or for smooth output.

Application of energy storage projects based on installed capacity from 2010 to 2030

"Energy transfer" refers to the use of utility-scale energy storage systems to arbitrage and provide sufficient power to meet peak power demand.

Using battery energy storage systems in this way is changing the economics of generating electricity from renewable sources, especially solar power systems. According to research by the Lawrence Berkeley National Laboratory in the United States, by the end of 2021, about 42% of the solar power generation facilities in the United States seeking grid-connection licenses (with a total installed capacity of 285GW) will be equipped with battery energy storage systems. The study found that more than 95% of all large-scale solar power facilities in the development cohort in California are equipped with energy storage systems.

Battery energy storage systems are particularly valuable in the UK grid, be it an island country like the UK, or an independent grid isolated from the distribution network, such as those in California or Texas, versus connections to other larger power systems They are less able to share power resources than those that do.

Mottcell New Energy said that for this reason, the UK may need to make relatively large investments in the deployment of battery energy storage systems. Its modelling shows that if the UK power system is to meet its 2030 renewable energy target, it will need to invest £20bn in deploying more energy storage, which is 18% of its total investment in energy technology plans. Achieving these goals will rely on the deployment of battery energy storage systems, which will provide about 10% of grid capacity by then.

Increasingly, battery energy storage systems are used to provide ancillary services, regulating the frequency and voltage of the grid. These services can provide additional revenue streams for limited energy storage capacity.