Energy storage: driving force behind energy sector disruption

Energy storage is one of the major stakes in ensuring lasting energy security. A balance between electricity supply and demand is crucial in order for electrical grids to function properly, but this balance is weakening due to increasing demand. While energy storage makes it possible to address numerous technical challenges, it is also contributing to a lasting transformation of the energy sector.

Challenges related to energy storage

A weakening balance between electricity supply and demand is a major contributing factor to the volatility of prices on the electricity market, and poses numerous technical challenges. Moreover, the steady growth of demand is not expected to slow – the International Energy Agency (IEA) predicts a 60% increase in electricity demand between 2000 and 2035.

While demand is increasing, it is expected that by 2020 20% of the energy mix will come from renewable sources, and that this figure will reach 40% in 2050. This environmental progress poses new energy challenges. Certain sources, such as wind energy, are irregular and intermittent. Effectively, this contributes to the electric system becoming more fragile. Energy suppliers need to learn how to manage new situations in which there is an increasing gap between production and consumption, such as a potential overproduction of electricity during a low-consumption period. They must also limit the impact of introducing renewable energy sources on the strength of electrical grids.

Various “compensatory” solutions make it possible to better understand the challenges related to disparities between supply and demand and the fragility of electrical grids. Tools such as interconnection, energy demand side management and, above all, energy storage, are currently used to address this type of problem. Energy storage involves “accumulating energy in a specific place for use at a later time”.

Energy storage is a promising technology for better incorporating and using renewable energy sources efficiently within the electrical grid. Use of these sources is essential, because public policy favours distinct decarbonisation of the energy mix. This should be able to be achieved by an increased contribution of renewable energies in the energy mix.

While storage is expected to be set as a technical imperative due to indirect support from the public authorities, it also presents numerous economic advantages. For suppliers, energy storage is an opportunity to counter the volatility of electricity prices. For consumers, it could help reduce consumption costs. However, it remains a highly disruptive element in the energy sector in regard to the new challenges which arise and its ability to effectively address them.

Impacts of energy storage

Energy storage actually combines a diverse array of technologies with extremely varied advantages, disadvantages and cost structures. In France, pumped hydroelectric energy storage (PHES) is the most widely-used solution. PHES makes it possible to move very high quantities of energy. The lifetime of these systems is about forty years, making it possible to amortize most of their cost.

Technologies such as PHES will certainly bring about structural changes in the energy sector. They make it possible to restore balance to the market. Energy storage allows producers to conserve energy, which will then be injected into the electrical grids when demand is higher, thus making it possible to stabilize prices. It also makes it possible to temper grid weakening caused by renewable sources, by storing energy that has been produced until it can be used at the most appropriate time.

Along similar lines, states are tending to develop their legislation and regulatory structure in such as way as to be favourable to energy storage. France, for example, has its “NOME” law which provides for a capacity requirement for electricity producers. This means that producers are now required to prove that they have a production capacity equal to their clients’ consumption, pointing the way towards the implementation of energy storage solutions which indirectly improve production capacity. It is increasingly common for public tender procedures for markets related to renewable yet intermittent energy sources to include restrictions related to energy storage. These provisions help set up a framework which is favourable to the rapid development of these solutions. This change shows the society-wide shift in regard to energy storage.

Energy storage is transforming how individuals consume energy, even in their own homes. One solution, Tesla’s Powerwall, is a rechargeable home battery. It can be charged either from the electrical grid (during off-peak hours) or by solar panels. Fully automated and easy to use, this solution has already revolutionised numerous homes by reducing their energy bill and even, in some cases, allowing them to achieve total energy self-sufficiency.

Energy storage also creates disruptions that go beyond the energy sector, and in particular in industry. The possibility of incorporating energy storage methods in industrial processes (utilities storage) is a tremendous opportunity for companies that can helm them limit their energy consumption costs, become more competitive and increase their operational flexibility. The Gexpro suite, developed by Rexel, provides companies with solutions to reduce their energy costs and increase productivity with a set of different tools. Gexpro Power IQ 30, for example, is a fully integrated energy storage system that can be adapted to the energy profiles, costs and needs of each user. Gexpro Power IQ 30 took up the challenge of offering a solution which is both adaptable and scalable, and which is therefore particularly attractive as the investment is quickly amortized by the generated gains.

In short, energy storage makes it possible to reduce the volatility of the electricity market and helps diversity the energy mix, by allowing renewable sources to be used efficiently. While from a technical standpoint, the various existing solutions still need further development, it is clear that the shift towards energy storage is already significantly underway and will have consequences on the organisation of our energy system and beyond.

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