While investment cost reductions in grid-scale energy storage are important, it’s the growing value of specific storage options in specific contexts that matters more says the World Energy Council.
The Council paints a brigh future for energy storage, but says an obsession with cost alone could be resulting in misconceptions about its real value in relation to wind and solar power.
“Whilst there is plenty of visionary thinking, business models are not always fully understood and there are not many studies on cost data.”
Its new report ‘E-Storage – Shifting From Cost To Value’, says the focus on cost is creating perceptions that energy storage is more expensive than it actually is.
The Council believes use of levelised cost of energy (LCoE) methodology is holding back the sector due to various problems with the methodology, such as differences in application cases.
The report seeks to analyse what the cost base of an array of storage technologies really means.
“Energy storage is a critical catalyst of the energy transition whose benefits are still undervalued,” says Christoph Frei, Secretary General of the World Energy Council.
The report recommendations point out that (like in just about anything), cheapest is not always best and policy makers need to examine storage through holistic case studies.
Electricity markets will also need adjustment.
“To take full advantage of the growing wind and solar electricity shares, policymakers must review electricity market design so to incentivise the build-up of storage capacity and ensure reliable and affordable electricity supply,” said Mr. Frei.
One of the many benefits of grid scale energy storage is using the technology could replace some fossil-fuel burning power generation plants and avoid the need for new ones.
Just on the cost front, the World Energy Council estimates energy storage costs for grid scale applications will plummet by as much as 70% over the next 15 years. New battery technology will drive prices down for solar storage and wind storage will become more attractive as wind turbine capacities increase.
E-Storage – Shifting From Cost To Value can be downloaded here.
Formed in 1923, the World Energy Council is an alliance of more than 3000 member organisation drawn from 90 countries that provides information and resources on all aspects of energy.
