Storage has often been described as the Holy Grail of the transition to a low-carbon energy system. Affordable, efficient storage would enable volatile renewable energies to be better integrated into electricity systems, it would greatly improve the economics of home solar systems, even allowing people to go off-grid, and it could help catalyse a revolution in electric cars as well as helping to solve the problems of the grid going down or grid overload. The problem is that this Holy Grail is still eluding us. Storage is often perceived as too expensive because of the way the calculations are done which do not fully take into account the value it brings to certain situations.
World Energy Resources Report 2016, E-storage: Shifting from cost to value 2016 - wind and solar applications
This report seeks to interrogate what the cost base of an array of storage technologies really means. The key conclusion is that a narrow focus on levelised cost alone can be misleading. Throughout the cost modelling process, the same issues repeatedly emerged, namely the importance of defining the business model under consideration and how the storage plant was being operated.
The report also estimates that with the many new technologies in the pipeline, storage costs of energy will fall by as much as 70% over the next 15 years. Solar storage will become more competitive as new battery technology drives prices down, and wind storage more attractive as technical advances in areas such as composite materials enables the power generated by wind turbines to increase.
In order to create the right policy environment that will unlock the potential of energy storage and capitalise on its true cost and value benefits, the report makes five recommendations to policymakers:
Go beyond just costs - cheapest is not always best
Examine storage through holistic case studies – generic cost estimates are not sufficient
Work with operators and regulators to accelerate the development of flexible markets – often the full value of flexibility is not sufficiently recognised and monetised
Establish supporting policies and an enabling regulatory framework to facilitate further commercial deployment of storage technologies
Consider storage as a key component for grid expansion or extension